Four US residents have been charged with a series of money laundering offenses connected to a major “pig butchering” fraud syndicate.
Lu Zhang, 36, of Alhambra, California; Justin Walker, 31, of Cypress, California; Joseph Wong, 32, of Rosemead, California; and Hailong Zhu, 40, of Naperville, Illinois, are charged with conspiracy to commit money laundering, concealment money laundering and international money laundering.
The quartet are accused of conspiring to set up shell companies and open bank accounts to launder the proceeds of pig butchering scams – a type of investment fraud – as well as other fraudulent schemes.
They transferred the funds to US and international bank accounts, with more than $20m directly deposited in bank accounts linked to the four, according to the Department of Justice (DoJ). The pig butchering scheme is said to have involved at least 284 suspicious transactions and resulted in losses to victims of over $80m.
Read more on pig butchering: US Seizes $9m From Pig Butchering Scammers
Pig butchering is derived from a Chinese phrase, to signify the modus operandi of fraudsters who “fatten” their victims before going in for the kill. Typically, victims are approached out of the blue online, through unsolicited messages or on dating sites, with the scammer attempting to build a rapport to gain their trust.
Once they believe this has happened, they’ll suggest the victim invests in a cryptocurrency scheme. However, although the apps they gain access to might show them growing their investment, the funds are simply diverted to the scammer’s bank account, never to be seen again.
By the time the victim realizes, it is too late.
Zhang and Walker are in custody and face a maximum penalty of 20 years in prison, although the remaining two are still at large.
Investment fraud was the highest earning cybercrime type in 2022, according to the FBI. Scammers made over $3.3bn from just over 30,000 reported incidents.