Three Individuals Arrested for $10 Million Crypto Scam
According to US Attorney Damian Williams, three individuals – Zhong Shi Gao, Naifeng Xu, and Fei Jiang – are accused of defrauding New York banks of more than $10 million between 2018 and 2022. They allegedly aimed to convert stolen funds into cryptocurrency and channel them through foreign crypto exchanges, involving accomplices from China and Taiwan temporarily residing in the United States.
Deceptive Banking Maneuvers
The trio targeted various bank branches in the New York City metropolitan area, gaining control over accounts and manipulating wire transfers. Once they gained control of the accounts, they orchestrated deposits and transfers between accounts linked to their criminal network. They then submitted fraudulent reports to the banks, falsely claiming that the wire transfers were unauthorized. This led both originating and receiving banks to temporarily credit the involved accounts with the transferred funds. Gao, Xu, Jiang, and their associates swiftly withdrew the funds in cash or converted them into cryptocurrency before the banks could uncover the ruse.
The stolen money was sent to crypto exchanges in other countries, making it even harder to find and get back.
Crypto As A Veil
The accused face potential sentences totaling up to 80 years each, as well as charges of aggravated identity theft carrying a mandatory minimum sentence of two years in prison. US Attorney Williams emphasized that the use of cryptocurrency as a tool to conceal identities will not shield fraudsters from accountability. FBI Assistant Director James Smith highlighted the gravity of such offenses, emphasizing that schemes like this harm financial institutions and pose challenges in reporting suspicious transactions.
Hot Take: Evolving Nature of Cryptocurrency Scams
The Federal Trade Commission’s findings reveal that over 46,000 Americans fell victim to cryptocurrency scammers within a year and a half, losing a total of $1 billion. This highlights the urgent need for increased awareness, education, and regulatory measures to safeguard individuals from falling prey to fraudulent activities within the cryptocurrency space.
Featured image from Kindel Media/Pexels
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