US prosecutors have arrested three people for allegedly stealing $10 million from financial institutions and laundering the stolen funds using cryptocurrency exchanges.
The individuals could each be sentenced to more than 80 years in prison if convicted of the allegations.
Bank fraud and funneling revenue to crypto exchanges
A Press release by the United States Attorney’s Office for the Southern District of New York announced the arrest of Zhong Shi Gao, Naifeng Xu and Feo Jiang by the Federal Bureau of Investigations (FBI), for their alleged involvement in an elaborate fraud scheme targeting banks and financial institutions. in the USA.
Gao, Xu and Jiang allegedly hired Chinese and Taiwanese foreign nationals living temporarily in the United States to open bank accounts in the New York metropolitan area and elsewhere.
Control of these accounts was given to the three men, who were required to have the funds deposited and transferred between them before proceeding to report the unauthorized wire transfers, thus inducing the banks to credit their accounts.
After receiving the credited money, Gao, Xu and Jiang decided to make withdrawals or convert the funds to crypto and transfer the funds to overseas cryptocurrency exchanges before the banks were in common in unauthorized false reports.
The fraudulent act took place between 2018 and 2022, with the scammers raking in over $10 million through this illicit activity. As noted in the press release, the theft affected “nearly a dozen banks and financial institutions.”
Maximum prison sentence of 82 years if guilty
Gao, Xu and Jiang are each charged with one count of conspiracy to commit bank fraud, one count of “conspiracy to commit wire fraud affecting a financial institution”, one count of charge of conspiracy to commit money laundering and one count of aggravated identity theft.
While the first two counts each carry a maximum prison term of 30 years, the third and fourth counts could carry a maximum prison term of 20 years and two years, respectively.
Commenting on the development, US Attorney Damian Williams said in a statement:
“These charges should serve as a warning to fraudsters and cybercriminals who believe they can turn to cryptocurrency to hide their identities. Working with our partner agencies, we will find you and hold you accountable for your crimes.”
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