https://www.bsc.news/post/fbi-nabs-trio-in-10-million-crypto-money-laundering-scheme

In a significant breakthrough, the FBI has arrested three individuals—Zhong Shi Gao, Naifeng Xu, and Fei Jiang—for committing a complex financial fraud against multiple banks in New York City. The accused reportedly executed an elaborate scheme between 2018 and 2022, extracting over $10 million through fraudulent money transfers that exploited a cunning tactic of fake victimhood.

By manipulating fraudulent money transfers, the accused allegedly credited nearly a dozen bank accounts. This resulted in the doubling of the stolen amounts.

The perpetrators reportedly transferred funds between accounts under their control, reporting these transactions as unauthorized. Exploiting the banks' response mechanism, they managed to double the balances on certain accounts.

‍Accomplice Recruitment and Prolonged Execution

Beyond their core activities, the accused recruited accomplices, particularly foreign nationals from China and Taiwan, temporarily residing in the United States. The scheme spanned roughly from 2018 to 2022, focusing on bank branches within New York City’s metropolitan area and other locations.

The Southern District of New York has charged each individual with offenses that could collectively carry a sentence of up to 80 years in prison. Additionally, they face aggravated identity theft charges, mandating a two-year prison sentence per count.

U.S. Attorney Damian Williams emphasized the severity of the charges and warned that law enforcement would not ignore cryptocurrency use for illicit purposes.

While the names of the cryptocurrency exchanges that handled the stolen funds and the cryptocurrencies used in the scheme are not disclosed, authorities insist digital assets played a significant role in the scheme.

As a side note, the New York State Department of Financial Services (NYDFS) recently released updated guidelines for cryptocurrency listing and delisting policies. These measures aim to enhance scrutiny by evaluating companies' policies against various risk factors, emphasizing technological risks, operational vulnerabilities, cybersecurity threats, market risks, liquidity challenges, and potential engagement in illicit activities.