The Department of Justice (DOJ) has unsealed an indictment charging four individuals—Lu Zhang, Justin Walker, Joseph Wong, and Hailong Zhu—with offenses related to a cryptocurrency investment scam designed to launder millions of dollars. The accused individuals, residing in California (Zhang, Walker, Wong) and Illinois (Zhu), are facing charges of conspiracy to commit money laundering, concealment of money laundering, and international money laundering.
The alleged scam involves a “pig butchering” scheme, where the perpetrators establish a seemingly legitimate relationship with victims to gain access to their accounts. The group reportedly opened shell companies and various bank accounts to transfer victim proceeds both domestically and internationally. The DOJ states that the scheme comprised 284 transactions, resulting in over $80 million in victim losses.
The unsealed indictment is part of a growing trend of pig butchering scams in the United States. In April, the DOJ announced the seizure of an estimated $112 million from cryptocurrency accounts linked to similar schemes. In September, the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an alert highlighting the prevalence of pig butchering scams.
Victims, once trusting the scammers, are manipulated into depositing funds into what appears to be a secure investment. However, the funds are redirected to virtual currency addresses controlled by the perpetrators, leading to significant losses for the victims.
Legal Consequences and Uncertain Restitution
Two of the accused individuals, Zhang and Walker, made their initial appearances in federal court. If convicted, they could face a maximum total sentence of two decades in prison. The DOJ press release does not provide clarity on potential financial restitution for the victims.