One of the ringleaders of a scheme to launder millions stolen through cryptocurrency investment scams pleaded guilty in a California courtroom on Tuesday.
Daren Li, 41, faces up to 20 years in prison for taking part in an operation that laundered more than $73 million stolen from people duped by so-called “pig-butchering” scams. Pig butchering typically involves a scammer forming a relationship with a victim on messaging platforms before persuading them to make fraudulent investments.
Li is a dual citizen of China and St. Kitts and Nevis, as well as a resident of both Cambodia and the United Arab Emirates. He pleaded guilty to one count of conspiracy to commit money laundering.
Li was arrested in April at the Hartsfield-Jackson Atlanta International Airport, a month before an alleged co-conspirator Yicheng Zhang was detained in Los Angeles. Zhang has pleaded not guilty.
The men were swept up in an investigation that began in September 2022 into a “criminal money-laundering syndicate” operating investment scams, according to a criminal complaint. Four people were charged in December 2023 with laundering criminal proceeds, and a search of the defendants’ phones turned up messages to and from Li showing that he “had a leadership role in determining where victim funds should be sent and in the management of the bank accounts receiving victim funds,” according to the complaint.
According to prosecutors, the scheme involved the creation of 74 shell companies and associated bank accounts through which the stolen money would be funneled.
“Li and other co-conspirators would receive victim funds in financial accounts they controlled, and then monitor the conversion of victim funds to virtual currency, specifically Tether (USDT), and the subsequent distribution of that virtual currency to cryptocurrency wallets controlled by Li and his co-conspirators,” the Department of Justice said in a release.
Li is scheduled to be sentenced next March, while a jury trial for Zhang is set to begin in April.
In 2023, reported American losses due to crypto-linked investment fraud jumped to $3.96 billion, according to the FBI’s Internet Crime Complaint Center. Much of the fraud is linked to organized criminal groups operating out of Southeast Asia.
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James Reddick
has worked as a journalist around the world, including in Lebanon and in Cambodia, where he was Deputy Managing Editor of The Phnom Penh Post. He is also a radio and podcast producer for outlets like Snap Judgment.
