Daren Li, a 41-year-old dual Chinese citizen, has pleaded guilty to his role in laundering $73 million from a variety of crypto investment scams, including a “pig butchering” scam. The guilty plea, filed on November 11, 2024, in a California federal court, sees Li facing a potential sentence of up to 20 years in prison.
Key Details of the Scheme:
- Conspiracy to Commit Money Laundering:
- Li admitted to conspiring in a multi-million-dollar money laundering operation that spanned from August 2021 to April 2024.
- The scheme targeted victims through fraudulent crypto investment schemes, particularly “pig butchering” scams, in which scammers build long-term relationships with victims to gain their trust before stealing large sums of money.
- Role in the Scheme:
- Li helped orchestrate the laundering of the stolen funds by instructing others to open U.S.-based bank accounts under shell companies. These accounts were used to conceal the origin and ownership of the funds, making the illicit money appear legitimate.
- Once victims transferred funds into these accounts, they were converted into Tether (USDT), a popular stablecoin, and transferred to wallets controlled by Li and his co-conspirators.
- One of the wallets used in the scheme had received over $341 million in digital assets, according to court documents.
- Stolen Funds and Laundering Process:
- Li admitted that $73.6 million in stolen funds were deposited directly into the bank accounts involved in the scheme.
- Additionally, at least $59.8 million was funneled through U.S.-based shell companies to launder the stolen funds.
- Arrests:
- Li was arrested at Atlanta’s Hartsfield-Jackson Airport on April 12, 2024.
- His alleged co-conspirator, Yicheng Zhang, was arrested on May 16, 2024, in Los Angeles.
- Possible Sentencing and Restitution:
- Li is facing a maximum sentence of 20 years in prison, along with three years of supervised release and a $500,000 fine (or twice the gross amount gained from the offense, whichever is larger).
- Restitution: Prosecutors have indicated that Li may be required to pay full restitution to the victims of the scam, which could range from $4.5 million to $73 million.
Statement from the Justice Department:
Nicole M. Argentieri, the head of the Justice Department’s Criminal Division, emphasized that Li’s actions were carried out outside of the U.S., with the use of shell companies and international bank accounts to conceal the nature and source of the stolen funds.
Legal and Financial Consequences:
- The case serves as a stark reminder of the growing issue of crypto scams and the importance of anti-money laundering (AML) measures in the digital asset space.
- The significant amounts of digital assets involved underscore the challenges authorities face in tracking illicit activities across decentralized platforms.
Sentencing Hearing:
Li’s sentencing hearing has been set for March 3, 2025, where the final determination will be made regarding his prison sentence and any restitution owed to the victims.
