United States prosecutors have apprehended three individuals for reportedly embezzling $10 million from financial institutions and using cryptocurrency exchanges to conceal the stolen money.
The accused could face over 80 years in prison if convicted of the charges.
Deceiving Banks and Transferring Profits to Crypto Exchanges
A press release from the U.S. Attorney’s Office for the Southern District of New York revealed the arrest of Zhong Shi Gao, Naifeng Xu, and Feo Jiang by the FBI. The individuals are suspected of participating in an intricate fraud operation targeting banks and financial institutions across the United States.
Gao, Xu, and Jiang allegedly recruited Chinese and Taiwanese individuals temporarily residing in the U.S. to open bank accounts in the New York City metropolitan area and other locations. They then took control of these accounts, using them to deposit and transfer funds before reporting unauthorized wire transfers to the banks, leading to the crediting of their accounts.
Upon receiving the credited money, the accused either withdrew the funds or converted them into cryptocurrency, transferring the proceeds to overseas exchanges before the banks detected the fraudulent reports.
The scam reportedly took place between 2018 and 2022, resulting in the theft of more than $10 million and impacting “nearly a dozen banks and financial institutions,” according to the press release.
Maximum Prison Sentence of 82 Years if Convicted
Gao, Xu, and Jiang are each charged with one count of bank fraud conspiracy, one count of “conspiracy to commit wire fraud affecting a financial institution,” one count of conspiracy to commit money laundering, and one count of aggravated identity theft.
The first two counts carry a maximum prison sentence of 30 years each, while the third and fourth counts could result in a maximum jail term of 20 years and two years, respectively.
In response to the development, U.S. Attorney Damian Williams issued a statement, warning fraudsters and cybercriminals that they will be held accountable for their crimes, even if they attempt to use cryptocurrency to conceal their identities.
Hot Take
It is crucial to take heed of this cautionary tale, recognizing that the authorities are committed to prosecuting criminals who attempt to exploit cryptocurrency for illicit activities. The case serves as a reminder that individuals involved in fraudulent schemes will face severe consequences, including lengthy prison sentences, regardless of the methods used to hide their illegal activities.
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