US Prosecutors Charge Two Individuals for Large-Scale Investment Fraud Laundering
US prosecutors on Thursday charged a New York man and woman for their roles in a large-scale crime ring that laundered money stolen in cyber investment fraud scams. 27-year-old Zhuoying Chen and 38-year-old Haojie Zhang allegedly managed a network of over a dozen people based in Queens and Brooklyn between 2020 and 2022.
Chen and Zhang allegedly transferred at least $43 million in proceeds from investment scams laundered to bank accounts in China by the criminal network using 140 bank accounts under roughly 45 shell companies, according to an unsealed indictment. The underlying schemes involved criminals contacting potential targets via social media or messaging services to build trust and persuade them to invest in fraudulent opportunities.
Investment Scam Tactics
Victims were then shown fake profiles with profits to encourage further investment before additional funds invested in the scheme were stolen. This tactic is often referred to as investment fraud or crypto-scam, and it has been on the rise in recent years.
According to the FBI's 2025 Internet Crime Report, investment fraud accounted for 49% of all scam-related incidents last year, resulting in reported losses of $8.6 billion, up from $6.5 billion in 2024.
Consequences and Related Cases
If found guilty of conspiracy to commit money laundering, Chen and Zhang face a maximum sentence of 20 years in prison. This case is not an isolated incident, as there have been several other high-profile cases of investment fraud and money laundering in recent years.
In February, a fugitive linked to a $73 million international cryptocurrency investment scheme was also sentenced in absentia to 20 years in prison. 42-year-old Daren Li was the first defendant directly involved in receiving victim funds to be sentenced among eight other accomplices who have also pleaded guilty in the same case.
The Justice Department charged four additional suspects in December for their involvement in another pig butchering scheme tied to more than $80 million in losses. In November, U.S. federal authorities established the Scam Center Strike Force (a new task force aimed at disrupting crypto-scam networks) after the U.S. Department of Justice seized $15 billion from the leader of Prince Group (a massive criminal organization that targeted Americans through cryptocurrency investment scams).
Global Efforts to Combat Investment Fraud
Since the start of the year, European authorities have also dismantled two investment fraud rings responsible for estimated losses of over €150 million to victims worldwide. This highlights the need for continued international cooperation to combat investment fraud and money laundering.
As Executive Associate Director John A. Condon of U.S. Immigration and Customs Enforcement Homeland Security Investigations (HSI) noted,
For nearly two years, these two Chinese nationals allegedly ran a sophisticated, illicit network that laundered funds stolen from unsuspecting victims' life savings.Assistant Attorney General A. Tysen Duva of the Justice Department's Criminal Division added,
As alleged in the indictment, the defendants laundered fraud proceeds, enabling scammers to continue to victimize Americans and deprive them of their hard earned money.
The case against Chen and Zhang is a reminder of the importance of vigilance and cooperation in combating investment fraud and money laundering. As the Picus whitepaper shows, breach and attack simulation can help test SIEM and EDR rules to prevent threats from slipping by detection.
Source: BleepingComputer