Three individuals were taken into custody on allegations of laundering more than $13 million from investment scam victims, a method referred to as "pig butchering," according to information released by the U.S. Department of Justice. Mingzhi Li and Zeyue Jia, both of Chinese nationality and residing in Los Angeles, along with Jun Shi from San Gabriel, are accused of creating shell companies designed to funnel the scam proceeds.
The alleged scheme resulted in victims "gradually lured into making increasing monetary contributions, generally in the form of cryptocurrency, to a seemingly sound investment before the scammer disappears with the contributed monies," according to KTLA. Li and Jia are reportedly in the U.S. on expired student visas, leading to their detention without bail, while Shi was released on a $20,000 bond. Each of the accused faces charges of operating an unlicensed money-transmitting business, which could result in a maximum penalty of five years in federal prison.
Magic Location Trading LLC and Stone Water Trading LLC are the companies in question, established by the defendants to serve as conduits for the stolen funds. These companies were not registered with the Financial Crimes Enforcement Network or the State of California, as required by federal law. In a series of transactions, Li and Jia received over $13 million through wire transfers, with monies then being moved to various accounts or used for personal expenses, as conveyed by authorities.
The Department of Justice highlighted one particularly egregious instance where a 72-year-old Minnesota man sent $325,000 to these companies under the guise of investing in a digital platform called "Enkuu," only to find later he could not withdraw his funds. Assistant United States Attorneys Kristin N. Spencer and Angela C. Makabali are prosecuting the case, with the FBI leading the investigation. The trio's arraignment is scheduled for March 17, as per the DOJ's announcement.
