2 SoCal men arrested in $80M ‘pig butchering’ cryptocurrency scam

Handcuffs are seen in this file image. (Getty Images)

Three Southern California men, along with a fourth defendant, have been charged with conspiring to open shell companies and bank accounts to launder funds from victims caught in cryptocurrency investment scams, a practice known as “pig butchering,” federal authorities announced Thursday.  

Two of the men, 36-year-old Alhambra resident Lu Zhang and 31-year-old Cypress resident Justin Walker were arrested by federal agents on Dec. 12, according to a news release from the U.S. Attorney’s Office, Central District of California.  

Federal authorities are currently searching for the other two men, 32-year-old Rosemead resident Joseph Wong and 40-year-old Naperville, Illinois resident Hailong Zhu. 

Pig butchering, a phrase derived from a foreign-language term used to describe the same fraudulent scheme, occurs when thieves con victims on dating services and social media platforms or through unsolicited calls pretending to be a wrong number into making business investments using cryptocurrency.  

After initiating a relationship with their victims and establishing trust, the scammers direct them to other members of the scheme who are “operating fraudulent cryptocurrency investment platforms and applications, where victims are persuaded to make financial investments,” the release explains.  

Once victims put money in scammer-controlled accounts, the fraudulent investment platform will show fake financial gains meant to encourage victims to invest more money. Ultimately, the victims are unable to withdraw or recover any of their money.  

“The overall fraud scheme in the related pig-butchering syndicate involved at least 284 transactions and resulted in more than $80 million in victim losses,” according to the U.S. Attorney’s Office.  

More than $20 million in victim funds were allegedly deposited into accounts controlled by Zhang, Walker, Wong and Zhu. 

All four men have been indicted on charges of conspiracy to commit money laundering, concealment of money laundering and international money laundering. Each of the charges carries a maximum statutory sentence of 20 years in federal prison.  

Zhang and Walker appeared in U.S. District Court in Los Angeles on Dec. 13, where they pleaded not guilty to the charges. A trial was scheduled for Feb. 6, 2024.  

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