Eleven Arrested for Investment Fraud, Money Laundering, Unlicensed Money-Transmitting Schemes

Eleven Arrested for Investment Fraud, Money Laundering, Unlicensed Money-Transmitting Schemes

Photo Courtesy of the United States Attorney’s Office for the Eastern District of New York

“These 11 arrests demonstrate the seriousness of financial fraud…” Peace said.

By Forum Staff

An indictment was unsealed Thursday in federal court in Brooklyn charging Jin Hua Zhang; Gregory Armand; Chen Chen and Yanbin Chen, both of Queens; Yanbing Chen; Changgui Huang; Xin Jin; Jiahui Miao; Lingming Zeng; Jin Fu Zhang; and Hua Zhou, also of Queens; with various offenses, including money laundering conspiracy, wire fraud conspiracy, bank fraud conspiracy, passport fraud conspiracy, aggravated identity theft and conspiring to operate an unlicensed money transmitting business. The defendants were arrested and arraigned Thursday before United States Magistrate Judge Peggy Kuo. One defendant remains at large.

According to the indictment and a memorandum filed in connection with the defendants’ bail hearings, the defendants engaged in a money laundering conspiracy dating back to May 2021 in which they laundered proceeds from an investment fraud scheme referred to as “Sha Zu Pan” or the “pig butchering” scam. Through this scam, more than 200 victims were contacted through messaging applications and convinced to invest almost $18 million in trading platforms by sending funds to purported money manager bank accounts that were later stolen.

The defendants also operated an unlicensed money transmitting business in which they converted approximately $52 million in cash into cashier’s checks on behalf of customers. As payment for their services, the defendants received a fee, which was generally a portion of the fee that the business received. As part of these criminal schemes, the defendants opened bank and cryptocurrency accounts under false names, using forged passports and identification documents of real people.

The case is part of an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) investigation led by the United States Attorney’s Office for the Eastern District of New York and the FBI. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking, weapons trafficking, and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply. OCDETF uses a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

In July 2022, Brooklyn U.S. Attorney Breon Peace was selected as the chairman of the White Collar

Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC). As the leader of the subcommittee, Mr. Peace will play a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes including mail and wire fraud, bank fraud, health care fraud, tax fraud, securities and commodities fraud, and identity theft.

“As alleged, nearly $18 million was swindled from over 200 victims throughout the country and laundered through the defendants’ sophisticated money laundering scheme,” Peace said. “These 11 arrests demonstrate the seriousness of financial fraud and the commitment of this Office and our law enforcement partners to rooting out bad actors and protecting victims.”

“For once the name of a scam – pig butchering – reflects the grotesque nature of the harm it causes victims. We allege these fraudsters bled dry each of their victims and then used the money to set up fake cryptocurrency accounts. We know there are many more victims of these types of scams, and we urge those people to report it to the FBI. We will do all we can to bring each and every criminal to justice,” added FBI NY Assistant Director-in-Charge Michael Driscoll.


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