STATEN ISLAND, N.Y. — Two Staten Islanders masterminded a multimillion-dollar investment fraud and money-laundering scheme, called a “pig-butchering” scam because it bled over 200 victims dry, federal prosecutors allege.
Brothers Jin Hua Zhang, 35; and Jin Fu Zhang, 39, are among 11 defendants charged in the $18 million illegal enterprise referred to as “Sha Zu Pan” and the “pig-butchering scam,” Brooklyn federal prosecutors said.
The defendants also operated an unlicensed money-transmitting business in which they allegedly converted about $52 million in cash into cashier’s checks on behalf of customers, officials said.
An indictment said the scam ran for about 15 months from May 2021 to August of this year.
It worked this way:
Victims were contacted on messaging applications, such as WhatsApp, by strangers who claimed to have made money by investing in cryptocurrency markets and foreign exchange markets, said authorities.
Once convinced of investing, victims were directed by purported account managers to wire funds to specific bank accounts, prosecutors said.
The defendants used false names, forged Chinese passports and other individuals’ identification documents to open those bank accounts, officials said.
The victims were later denied the ability to withdraw their invested funds, said officials.
The Zhangs oversaw the scam and managed a network of individuals who laundered the victims’ money to other bank accounts or withdrew those funds, authorities said.
In addition to the investment scheme, the defendants allegedly operated an illegal underground “bank.”
They received large amounts of cash from clients and converted the money into cashier’s checks issued by commercial banks, said the indictment.
The defendants then returned the cashier’s checks to customers in exchange for a fee, which was calculated as a percentage of each transaction, the indictment said.
All told, the defendants converted about $52 million cash into cashier’s checks for customers, said officials.
The indictment was announced by Breon Peace, United States attorney for the Eastern District of New York; Michael J. Driscoll, assistant director-in-charge, Federal Bureau of Investigation, New York Field Office (FBI); Frank A. Tarentino III, special agent-in-charge, Drug Enforcement Administration, New York Division (DEA), and Keechant L. Sewell, commissioner, New York City Police Department (NYPD).
“For once, the name of a scam — pig butchering — reflects the grotesque nature of the harm it causes victims,” said Driscoll in a statement. “We allege these fraudsters bled dry each of their victims and then used the money to set up fake cryptocurrency accounts.”
Driscoll said authorities believe there are “many more victims” and urged them to contact the FBI.
Authorities did not say where on Staten Island the Zhangs live.
Information on their lawyers was not immediately available.
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