February 24, 2024

On December 18, 2023, the U.S. Department of Justice (DoJ) announced the arrests of four U.S. nationals – Lu Zhang, Justin Walker, Joseph Wong, and Hailong Zhu – for their involvement in a cryptocurrency investment scam that raked in over $80 million. The defendants have been charged with conspiracy to commit money laundering, concealment money laundering, and international money laundering.

According to the DoJ, the quartet set up shell companies and bank accounts to carry out their fraudulent activities, which included pig butchering scams. These scams involved transferring the ill-gotten funds to both domestic and international financial entities. If convicted, Zhang and Walker could face up to 20 years in prison, while their alleged co-conspirators remain at large.

The DoJ stated that the pig-butchering syndicate’s overall fraud scheme involved 284 transactions and resulted in more than $80 million in losses for victims. Out of this amount, over $20 million was directly deposited into bank accounts associated with the defendants.

This recent enforcement action follows the sentencing of Nigerian national Eze Harrison Arinze, who received a three-year prison sentence for his role in pig butchering scams that defrauded 34 victims in 13 countries, resulting in $592,000 in losses.

In addition to these cases, there have been numerous other instances of individuals falling victim to investment scams. In one instance, a woman from Hyderabad, India, lost over Rs 4.88 lakh in a phone scam. Another woman from the same city fell prey to a stock market scam, losing Rs 3 crore. In the United States, a former White House scientist was scammed out of $650,000 and was also required to pay taxes on the fraudulent earnings. Similarly, a woman from Martinez, California, lost $1,000 in an attempted online scam, while an Arizona resident lost nearly $5 million in a separate online scam that resulted in a conviction.

To protect themselves from falling victim to these types of scams, financial watchdogs have issued warnings and advice. For example, a provincial financial watchdog has cautioned investors about the dangers of falling for investor recovery scams, while another warning advises individuals to be wary of the “phantom hacker” scam, which often involves requests for payments through weighted blankets or airplane armrests.

In light of the increasing prevalence of investment scams, it is crucial for individuals to be cautious and vigilant when approached with investment opportunities. It is also essential to thoroughly research and verify any investment opportunity before committing any funds. By staying informed and aware, individuals can protect themselves from falling victim to these fraudulent schemes.

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