Three arrested in $10M financial institution fraud, crypto laundering scheme

The U.S. Lawyer’s Workplace for the Southern District of New York and the FBI introduced three arrests associated to a $10 million scheme involving cryptocurrency on Nov. 16.

The authorities mentioned that Zhong Shi Gao, Naifeng Xu, and Fei Jiang have been arrested after collaborating in a scheme to steal tens of millions of {dollars} from U.S. banks and monetary establishments. The three people allegedly transformed the stolen funds into cryptocurrency and moved the transformed funds into overseas crypto exchanges.

Authorities haven’t but disclosed the precise cryptocurrency exchanges concerned within the dealing with of the stolen funds or the actual cryptocurrencies utilized within the scheme.

To hold out the scheme, the accused allegedly transferred funds between accounts that they managed after which falsely reported these transactions as unauthorized. The banks then credited the supposedly stolen quantity to these accounts, thereby doubling some balances.

The three accused people additionally recruited accomplices, particularly overseas nationals from China and Taiwan who have been quickly residing in the USA. The scheme was executed between roughly 2018 and 2022, focusing on financial institution branches in New York Metropolis’s metropolitan space and different places.

The Southern District of New York mentioned that every particular person faces costs that would carry as much as 80 years in jail in whole. Every has additionally been charged with one depend of aggravated identification theft, which carries a compulsory sentence of two years in jail.

Enforcement wave

In a bid to guard the integrity of the monetary system, U.S. authorities have just lately made important strides in tackling high-profile cryptocurrency-related legal circumstances. Prosecutors within the Southern District of New York notably convicted FTX founder and former CEO Sam Bankman-Fried in a legal trial that ended Nov. 2.

In October, the FBI charged six individuals in a multi-million greenback crypto cash laundering scheme. In August, the Division of Justice reported that Bitfinex hackers Heather Morgan and Ilya Lichtenstein had pleaded responsible to cash laundering costs.

Different noteworthy actions concern SafeMoon’s founders and executives, Mango Markets hacker Avraham Eisenberg, and varied OneCoin associates.