Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (FBI), announced today the arrests of ZHONG SHI GAO, a/k/a George, NAIFENG XU, a/k/a Andy, and FEI JIANG, a/k/a Jeffrey, a/k/a Brother Fei, for charges in connection with a scheme to steal and launder millions of dollars from financial institutions, which resulted in the theft of over $10 million. GAO and JIANG were arrested this morning and will be presented today before U.S. Magistrate Judge Robert W. Lehrburger. XU was arrested in Oklahoma and will be presented in the U.S. District Court for the Eastern District of Oklahoma. The case is assigned to U.S. District Judge Colleen McMahon.
U.S. Attorney Damian Williams said: For years, Zhong Shi Gao, Naifeng Xu, and Fei Jiang allegedly participated in a complex scheme to steal over $10 million from nearly a dozen U.S. banks and financial institutions, which they converted into cryptocurrency and moved to foreign cryptocurrency exchanges. These charges should serve as a warning to fraudsters and cybercriminals who think they can turn to cryptocurrency to hide their identities together with our partner agencies, we will find you and hold you accountable for your crimes.
FBI Assistant Director in Charge James Smith said: Gao, Jiang, and Xu were arrested for allegedly stealing and laundering more than $10 million dollars by scamming multiple financial institutions and using foreign cryptocurrency exchanges. Schemes like this harm institutions and make it tougher to report suspicious transfers. The arrests today serve as a warning to anyone thinking of attempting to engage in bank fraud. The FBI will hold you accountable in the criminal justice system.
According to the allegations in the Indictment unsealed today in Manhattan federal court:[1]
Between at least in or about 2018 and in or about 2022, ZHONG SHI GAO, a/k/a George, NAIFENG XU, a/k/a Andy, and FEI JIANG, a/k/a Jeffrey, a/k/a Brother Fei, participated in a scheme with others to steal millions of dollars from financial institutions by causing transfers of funds between accounts they controlled, then falsely and fraudulently reporting that the transfers were unauthorized, which induced the financial institutions to credit them the amount of the transfers. The scheme proceeded in the following manner:
First, GAO, XU, JIANG, and other members of the scheme would recruit other people frequently foreign nationals from China and Taiwan temporarily residing in the United States to open bank accounts at various bank branches in the New York City metropolitan area and elsewhere. Control over these bank accounts would then be given to GAO, XU, JIANG, and other members of the scheme.
Second, GAO, XU, JIANG, and other members of the scheme would arrange for funds to be deposited and transferred between bank accounts controlled by members of the scheme. Next, GAO, XU, JIANG, and other members of the scheme would cause fraudulent reports to be filed with the banks claiming that these wire transfers were unauthorized. This prompted the banks both the bank issuing the wire transfer and the bank receiving the wire transfer to temporarily credit the accounts in the amount of the transferred funds, effectively doubling the amount of money initially deposited into these accounts, even though GAO, XU, JIANG, and other members of the scheme had in fact authorized the transfers and maintained control over the transferred funds all along.
Finally, GAO, XU, JIANG, and other members of the scheme would arrange for the credited funds to be quickly withdrawn as cash or converted into cryptocurrency and moved to foreign cryptocurrency exchanges before the banks realized that the unauthorized-transfer reports were fraudulent. This resulted in GAO, XU, JIANG, and other members of the scheme withdrawing nearly double the money initially deposited while leaving the bank accounts with negative balances.
In total, GAO, XU, JIANG, and other members of the scheme are responsible for over $10 million in actual losses to nearly a dozen banks and financial institutions.
* * *
ZHONG SHI GAO, 31, of Flushing, New York; NAIFENG XU, 37, of Guthrie, Oklahoma; and FEI JIANG, 41, of Brooklyn, New York, are each charged with one count of bank fraud conspiracy, which carries a maximum sentence of 30 years in prison; one count of conspiracy to commit wire fraud affecting a financial institution, which carries a maximum sentence of 30 years in prison; one count of money laundering conspiracy, which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory sentence of two years in prison to be served consecutively to any other sentence imposed.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the investigative work of the FBIs Asian and African Organized Crime Squad. Mr. Williams also thanked the FBI Field Office in Oklahoma City for their assistance in the investigation of this case.
This case is being handled by the Offices Violent & Organized Crime Unit. Assistant U.S. Attorneys Andrew K. Chan, James Ligtenberg, and Ni Qian are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described herein should be treated as an allegation.
Excerpt from:
Three Men Arrested For Complex Bank Fraud And Cryptocurrency ... - Department of Justice
- Richmond man charged in $10 million cryptocurrency home invasion theft - Vancouver Sun - November 24th, 2023 [November 24th, 2023]
- DOJ Seizes Nearly $9M Worth of Cryptocurrency Tied to Scammers - MarketWatch - November 24th, 2023 [November 24th, 2023]
- United States Files Forfeiture Action to Recover Cryptocurrency ... - Department of Justice - November 24th, 2023 [November 24th, 2023]
- Cryptocurrency rebounds with strong gains on Thanksgiving 2023 ... - Investing.com - November 24th, 2023 [November 24th, 2023]
- Exploring the Pros and Cons of Government and Institutional ... - Artvoice - November 24th, 2023 [November 24th, 2023]
- Top Crypto That Can Surprise You With Growth This Week - Analytics Insight - November 24th, 2023 [November 24th, 2023]
- The Importance of Cryptocurrency Security: Understanding Risks ... - Artvoice - November 24th, 2023 [November 24th, 2023]
- We are all tech lawyers now the future of cryptocurrency - Law Society Journal - November 24th, 2023 [November 24th, 2023]
- Bitcoin Recovers Strongly as Ethereum Leads Cryptocurrency ... - Proactive Investors USA - November 24th, 2023 [November 24th, 2023]
- Bitcoin in Bundestag: Germany's Bold Leap into Cryptocurrency Recognition - Finance Magnates - November 24th, 2023 [November 24th, 2023]
- Cryptocurrency Optimism's Price Increased More Than 4% Within 24 ... - Investing.com UK - November 24th, 2023 [November 24th, 2023]
- Bitcoin in 2024 how will the cryptocurrency fare next year and ... - Luxury Lifestyle Magazine - November 24th, 2023 [November 24th, 2023]
- Raiffeisenlandesbank to launch Bitcoin trading in early 2024 - Cointelegraph - November 24th, 2023 [November 24th, 2023]
- If Cryptocurrency Exchanges Want To Operate In U.S. they must ... - Tekedia - November 24th, 2023 [November 24th, 2023]
- New Crypto Coins and High Growth Cryptocurrency | Analysis of ... - Analytics Insight - November 24th, 2023 [November 24th, 2023]
- What Is Solana? How Does It Work? Forbes Advisor INDIA - Forbes - November 24th, 2023 [November 24th, 2023]
- Examining the Latest Cryptocurrency Poised for Exponential Growth ... - Analytics Insight - November 24th, 2023 [November 24th, 2023]
- David Sovka: A primer on cryptocurrency, aka a fool and his money are soon parted - Times Colonist - November 20th, 2023 [November 20th, 2023]
- Bitcoin falls 4.94% to $36007 - Reuters - November 20th, 2023 [November 20th, 2023]
- Cryptocurrency market retreats after recent rally, Bitcoin and Ethereum slip By Investing.com - Investing.com - November 20th, 2023 [November 20th, 2023]
- The Impact of Cryptocurrency on Gaming: The Evolution of Virtual ... - FingerLakes1.com - November 20th, 2023 [November 20th, 2023]
- Crypto Safe: How To Move Cryptocurrency From Crypto Exchange ... - CCN.com - November 20th, 2023 [November 20th, 2023]
- NBC chief cautions youth over cryptocurrency risks - Khmer Times - November 20th, 2023 [November 20th, 2023]
- Cryptocurrency Ponzi Scam Unearthed in Odisha, Head of Yes World Crypto Token Arrested - Gadgets 360 - November 20th, 2023 [November 20th, 2023]
- Cryptocurrency wallets might be vulnerable to 'Randstorm' flaw - TechTarget - November 20th, 2023 [November 20th, 2023]
- Revolutionizing global payments: RocketFuel reveals how cryptocurrency is transforming businesses - Yahoo Finance - November 20th, 2023 [November 20th, 2023]
- British man cannot be extradited to US over fake cryptocurrency ... - Reuters UK - November 20th, 2023 [November 20th, 2023]
- READOUT: FinCEN Joins Harvard Kennedy School Event on the ... - FinCEN - November 20th, 2023 [November 20th, 2023]
- Why Asia, not the US, will be key for cryptocurrency in next bull cycle - South China Morning Post - November 20th, 2023 [November 20th, 2023]
- Cryptocurrency, Inflation, and Financial Stability: A New Economic ... - FingerLakes1.com - November 20th, 2023 [November 20th, 2023]
- Singapore to Share Cryptocurrency Tax Information With Other ... - Lexology - November 20th, 2023 [November 20th, 2023]
- Kaspa cryptocurrency hits all-time high amid Binance listing By ... - Investing.com - November 20th, 2023 [November 20th, 2023]
- Online 'pig butchering scam' preys on unsuspecting romantic partners, IRS warns - 9News.com KUSA - November 20th, 2023 [November 20th, 2023]
- r/CryptoCurrency Moons (MOON), High Volatility and Rising Saturday: Is it Time to Cash Out? - InvestorsObserver - November 20th, 2023 [November 20th, 2023]
- McDowell Commissioners to consider cryptocurrency mining ban - McDowell News - November 20th, 2023 [November 20th, 2023]
- Paycorp launches app for users to withdraw crypto as cash - Techpoint Africa - November 20th, 2023 [November 20th, 2023]
- Top 11 cryptocurrency trends to look out for in 2023-24 - Investing.com India - November 20th, 2023 [November 20th, 2023]
- Robinhood to launch crypto trading in EU even as cryptocurrency revenue slides almost 26% from last quarter - Fortune - November 7th, 2023 [November 7th, 2023]
- Expect new IRS crypto surveillance to come with a surge in confiscation - Cointelegraph - November 7th, 2023 [November 7th, 2023]
- The role of cryptocurrency in financing terrorism - PBS NewsHour - November 7th, 2023 [November 7th, 2023]
- Cryptocurrency Kinship: Bitcoin's Ties with Major Digital Assets - FingerLakes1.com - November 7th, 2023 [November 7th, 2023]
- Blockchain and Cryptocurrency - Business Insider India - November 7th, 2023 [November 7th, 2023]
- The Role of AES in Cryptocurrency: From Cipher Blocks to Bitcoin - FingerLakes1.com - November 7th, 2023 [November 7th, 2023]
- Coinbase blocked in Kazakhstan amid tighter cryptocurrency ... - Investing.com - November 7th, 2023 [November 7th, 2023]
- Learning cryptocurrency trading with Tedi Ticic - KGET 17 - November 7th, 2023 [November 7th, 2023]
- TRON and Pundi X Collaborate to Boost Cryptocurrency Adoption with XPOS Integration - Yahoo Finance - November 7th, 2023 [November 7th, 2023]
- Fraudulent Ledger Live App in Microsoft Store Linked to $768K ... - Blockchain.News - November 7th, 2023 [November 7th, 2023]
- Cryptocurrency scam worth 2,500 crore uncovered in Indian ... - Investing.com - November 7th, 2023 [November 7th, 2023]
- Why have cryptocurrency values rebounded recently and can they get back to previous peaks? - ABC News - November 7th, 2023 [November 7th, 2023]
- The Alameda gap and crypto liquidity crisis explained - Cointelegraph - November 7th, 2023 [November 7th, 2023]
- SEC Faces Scrutiny Over XRP Lawsuit and Cryptocurrency Regulation, While Bitcoin Remains Resilient - Coinpedia Fintech News - November 7th, 2023 [November 7th, 2023]
- Vietnam loses top ranking in cryptocurrency adoption index - VnExpress International - November 7th, 2023 [November 7th, 2023]
- 3 Growth Stocks With More Potential Than Any Cryptocurrency - The Motley Fool - November 7th, 2023 [November 7th, 2023]
- Bitcoin, Ethereum and XRP lead in surging cryptocurrency market - Investing.com India - November 7th, 2023 [November 7th, 2023]
- Bitcoin has more than doubled this year in resurgence - IndiaTimes - November 7th, 2023 [November 7th, 2023]
- Bitrace Research Exposes Risks of Anonymous Online Markets with Cryptocurrency - CryptoPotato - November 7th, 2023 [November 7th, 2023]
- Does GTRIs cryptocurrency-based suggestions for WTO strike the right cord for global e-commerce space - The Financial Express - November 7th, 2023 [November 7th, 2023]
- 'The Simpsons' Episode Features NFTs, Inspired Collections Soar In Value: Springfield's History With Cryp - Benzinga - November 7th, 2023 [November 7th, 2023]
- Law Enforcement Gears Up: I4C Conducts Cryptocurrency and ... - The420.in - November 7th, 2023 [November 7th, 2023]
- Sam Bankman-Fried guilty of defrauding FTX crypto customers out of billions of dollars - Sky News - November 3rd, 2023 [November 3rd, 2023]
- Sam Bankman-Fried Is Found Guilty of 7 Counts of Fraud and Conspiracy - The New York Times - November 3rd, 2023 [November 3rd, 2023]
- NYC jury finds Sam Bankman-Fried guilty on all charges in cryptocurrency fraud trial - New York Daily News - November 3rd, 2023 [November 3rd, 2023]
- Breakingviews - Breakingviews: SBF's guilty verdict will help crypto break free - Reuters - November 3rd, 2023 [November 3rd, 2023]
- What Is Bitcoin 'Halving' and Does it Push Up the Cryptocurrency's Price? - Bloomberg - November 3rd, 2023 [November 3rd, 2023]
- Founders of SafeMoon cryptocurrency touted by Dave Portnoy accused of fraud - New York Post - November 3rd, 2023 [November 3rd, 2023]
- RocketFuel CEO reveals surprising data on cryptocurrency usage: why stablecoins are the future - Yahoo Finance - November 3rd, 2023 [November 3rd, 2023]
- Cryptocurrency market faces massive $137 million futures ... - Investing.com - November 3rd, 2023 [November 3rd, 2023]
- Blockchain & Cryptocurrency Regulation 2024 - Cleary Gottlieb - November 3rd, 2023 [November 3rd, 2023]
- Going nuclear: how the future of cryptocurrency mining is playing out ... - The National - November 3rd, 2023 [November 3rd, 2023]
- Blockchain and Cryptocurrency Edited Web story for testing - Business Insider India - November 3rd, 2023 [November 3rd, 2023]
- Bukit Aman: Cops arrest 40, bust cryptocurrency scam involving over RM50m losses - Malay Mail - November 3rd, 2023 [November 3rd, 2023]
- Doctor cheated of more than Rs 1.3 cr in cryptocurrency fraud in Navi Mumbai; four booked - The Financial Express - November 3rd, 2023 [November 3rd, 2023]
- QTUM, SUI, Render (RNDR) cryptocurrencies on the rise: here's why - Invezz - November 3rd, 2023 [November 3rd, 2023]
- Cops nab 40 people, busts cryptocurrency scam with over RM50m ... - Malaysiakini - November 3rd, 2023 [November 3rd, 2023]
- Cryptocurrency's popularity in the U.S. tied to conservative moral foundations - PsyPost - October 24th, 2023 [October 24th, 2023]
- Fund tracking inverse of bitcoin futures hits all-time low as cryptocurrency rallies - Reuters - October 24th, 2023 [October 24th, 2023]
- Cryptocurrency Rally: Bitcoin and More Soar on New Hopes for ETF - The Motley Fool - October 24th, 2023 [October 24th, 2023]
- Dollar higher as US business activity ticks up in October - Reuters - October 24th, 2023 [October 24th, 2023]
- Bitcoin Is Surging. Here's Why the Cryptocurrency Is Back - Entrepreneur - October 24th, 2023 [October 24th, 2023]
- Cryptocurrency Market Capitalization Sets Years High - Action Forex - October 24th, 2023 [October 24th, 2023]