Two Members of Chinese Money Laundering Network Charged with Laundering Investment Fraud Proceeds

Earlier today, in federal court in Brooklyn, an indictment was unsealed charging Zhuoying Chen, also known as "Jolene," and Haojie Zhang, also known as "Kevin," with money laundering conspiracy in connection with their participation in a scheme to launder funds derived from cyber investment fraud scams, or "pig butchering" scams. The defendants were arrested today and will be arraigned this afternoon before United States Magistrate Judge James R. Cho.

Joseph Nocella Jr., United States Attorney for the Eastern District of New York; A. Tysen Duva, Assistant Attorney General, head of the Justice Department's Criminal Division, James C. Barnacle, Jr., Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), Harry T. Chavis, Jr., Special Agent in Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI New York); and Ketty Larco-Ward, Inspector in Charge, United States Postal Inspection Service, New York Division (USPIS) announced the arrests and indictment.

"As alleged, the defendants were key members of a sophisticated money laundering network that funneled over $40 million in victim funds to bank accounts in China," stated United States Attorney Nocella. "Our Office will continue in its strong tradition of holding accountable anyone who seeks to prey on vulnerable victims with investment fraud schemes."

"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," stated Assistant Attorney General Duva. "Dismantling Chinese money laundering networks that support investment fraud schemes is critical to protecting Americans. The Criminal Division will relentlessly pursue the financial networks that fuel and profit from these fraud schemes."

"The defendants' alleged operation laundered more than $40 million from American victims and deposited them directly in Chinese accounts overseas. The FBI is committed to working alongside our federal partners to dismantle scam compounds that seek to steal the hard-earned money of our citizens," stated FBI Assistant Director in Charge Barnacle.

"Today's indictment shows we're not backing down against fraudsters who target innocent people-justice is coming for those who steal from hardworking Americans," stated IRS-CI New York Special Agent in Charge Chavis. "This case reflects how IRS-CI and our partners work side-by-side to uncover money-laundering networks and protect the public. Together, we're pushing forward to ensure Americans' hard-earned money is safe from schemes like these."

"Investment fraud schemes exploit the trust of victims through false promises of favorable returns," stated USPIS Inspector in Charge Larco-Ward. "The US Postal Inspection Service is committed to investigating fraud and protecting the community from those who seek to profit through deception."

As alleged in the indictment, between 2020 and 2022, Chen and Zhang managed a network of more than a dozen individuals based in Queens and Brooklyn, New York who opened bank accounts in the name of shell companies to launder proceeds of investment scams known as "pig butchering" fraud schemes, a term derived from a foreign-language phrase used by perpetrators to describe the crimes. These schemes consist of perpetrators contacting victims via messaging services or social media applications. The perpetrators then initiate relationships with the victims and gain their trust, convincing victims to send money for lucrative investment opportunities. The perpetrators also show the victims fake profits on the purported investment and encourage the victims to invest more. Ultimately, the perpetrators steal the victims' funds.

Chen and Zhang allegedly conspired with China-based co-conspirators to transfer the funds involved in pig butchering fraud schemes abroad. Chen, Zhang and other co-conspirators oversaw the use of approximately 45 shell companies and 140 company bank accounts located primarily in the Eastern District of New York to launder at least $43 million in criminal proceeds from these schemes.

The charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty. If convicted, each defendant faces a maximum sentence of 20 years' imprisonment.

This prosecution is also part of the Homeland Security Task Force (HSTF) initiative established by Executive Order 14159, Protecting the American People Against Invasion. The HSTF is a whole-of-government partnership dedicated to eliminating criminal cartels, foreign gangs, transnational criminal organizations, and human smuggling and trafficking rings operating in the United States and abroad. Through historic interagency collaboration, the HSTF directs the full might of U.S. law enforcement towards identifying, investigating, and prosecuting the full spectrum of crimes committed by these organizations, which have long fueled violence and instability within our borders. In performing this work, the HSTF places special emphasis on investigating and prosecuting those engaged in child trafficking or other crimes involving children. The HSTF further utilizes all available tools to prosecute and remove the most violent criminal aliens from the United States.

The government's case is being handled by the Office's Business and Securities Fraud Section and by the Department of Justice's Money Laundering, Narcotics and Forfeiture Section. Assistant United States Attorneys Benjamin Weintraub and David I. Berman, and Trial Attorneys Claire Galasso, David Ginensky, and Adrienne Rosen are in charge of the prosecution, with assistance from Paralegal Specialist Laura Mansour.

The Defendants:

ZHUOYING CHEN (also known as "Jolene")
Age: 27
Brooklyn, New York

HAOJIE ZHANG (also known as "Kevin")
Age: 38
Queens, New York

E.D.N.Y. Docket No. 26-CR-205 (KAM)