Three individuals have been apprehended in connection to a fraudulent scheme involving $10 million, which was subsequently laundered through cryptocurrency exchanges overseas.
The U.S. Attorney’s Office for the Southern District of New York and the FBI announced the arrests on Wednesday, November 16. The perpetrators, named as Zhong Shi Gao, Naifeng Xu, and Fei Jiang, allegedly scammed multiple US banks and financial institutions before converting the stolen funds into cryptocurrency.
The accused reportedly moved the converted funds to foreign crypto exchanges, although the specific exchanges and the exact cryptocurrencies used have not been disclosed. The illegal operation was apparently carried out between 2018 and 2022, and targeted bank branches in New York City’s metropolitan area and elsewhere.
As part of the scheme, the arrested individuals are said to have transferred funds between accounts they controlled, and then falsely claimed these transactions were unauthorized. This led to the banks crediting the supposedly stolen amounts back into their accounts, effectively doubling some balances.
The trio also allegedly recruited accomplices, primarily foreign nationals from China and Taiwan temporarily residing in the United States. If convicted, each individual could face up to 80 years in prison. Additional charges include one count of aggravated identity theft, which carries a mandatory two-year sentence.
This case represents another notable stride by U.S. authorities in tackling significant cryptocurrency-related criminal cases, following recent convictions and charges in other high-profile cases.
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