On Tuesday, November 12th, Chinese citizens Daren Li and Yicheng Zhang pleaded guilty in a U.S. federal court to participating in a transnational cryptocurrency investment fraud and money laundering scheme, illegally obtaining at least $73 million.
According to the U.S. Department of Justice, 41-year-old Daren Li holds dual citizenship in China and Saint Kitts and Nevis, and is a legal resident of Cambodia and the United Arab Emirates. He was arrested on April 12 at Hartsfield-Jackson Atlanta International Airport.
Yicheng Zhang is a resident of Temple City, California and was arrested on May 16 in Los Angeles. Both admitted to one count of conspiracy to commit money laundering.
Li and his accomplices set up bank accounts under the names of multiple shell companies, tricking investors into transferring funds to these accounts and then instructing lower-level conspirators to move the money overseas and launder it through other international accounts. Li admitted that at least $73.6 million of victim funds were directly deposited into bank accounts linked to him and his co-conspirators, with at least $59.8 million coming from U.S.-based shell companies.
The two primarily targeted unsuspecting investors, building trust and connections with them, promising hefty returns to deceive them into handing over money, a tactic known as a “Ponzi scheme.”
In this scam, over $73 million of illicit funds were laundered through U.S. financial institutions to a Deltec Bank account in the Bahamas and converted into the virtual asset Tether. One cryptocurrency wallet associated with this case received over $341 million in virtual assets.
Deputy Assistant Attorney General Nicole M. Argentieri stated, “Even though Li and his accomplices committed crimes outside the U.S., they cannot escape the sanctions of American law. Their guilty pleas today reflect our commitment to combating transnational fraud and continuing to collaborate with domestic and international partners to hold accountable those who defraud American victims through cryptocurrency investment scams, wherever they may be.”
Daren Li is set to be sentenced on March 3, 2025. He and Yicheng Zhang are both charged with conspiracy to commit money laundering and six counts of international money laundering. If convicted, each defendant could face a maximum of 20 years in prison for each offense.