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A 41-year-old dual citizen of China and St. Kitts and Nevis, Daren Li, has pleaded guilty to one count of conspiracy to commit money laundering utilizing crypto. The charge involves a complex scheme that allegedly laundered millions of dollars linked to crypto investment scams.
The US Department of Justice, in a press release uploaded on November 12, announced that Li and his co-conspirators had moved more than $73 million through a network of shell companies and bank accounts worldwide.
The Laundering Scheme’s Mechanics
According to court documents, Li admitted to collaborating with associates to launder funds extracted from unsuspecting victims via cryptocurrency scams.
To disguise the movement of funds, Li and his co-conspirators employed encrypted communication channels and established US-based bank accounts under the guise of shell companies.
This operation aimed to obscure the fraudulently acquired funds’ origin, ownership and intended use. Li reportedly monitored incoming transfers, facilitated their conversion to virtual currencies, such as Tether (USDT), and oversaw their further distribution across cryptocurrency wallets under his control.
Additionally, court documents revealed that a substantial portion of the victim funds, totaling over $73.6 million, flowed directly into bank accounts connected to Li and his co-conspirators.
Of this amount, at least $59.8 million was reportedly deposited from US-based shell companies that launder the ill-gotten proceeds.
According to the release from the DoJ, the scheme was engineered to defraud unsuspecting investors through crypto-related scams, with Li playing a pivotal role in managing and transferring the funds involved.
US Attorney Martin Estrada for the Central District of California emphasized the extensive damage caused by financial criminals, stating that their actions often leave a trail of financial ruin. The US attorney added:
Investors should be diligent and on guard against anyone offering quick riches via new, exotic investments. A healthy dose of skepticism could prevent financial ruin down the road.
The Collaboration Behind The Bust
As reported by the DoJ, the US Secret Service’s Global Investigative Operations Center is leading the investigation, with assistance from agencies such as Homeland Security Investigations’ El Camino Real Financial Crimes Task Force, Customs and Border Protection’s National Targeting Center, and several other international and domestic law enforcement partners.
Furthermore, the DoJ revealed that Li’s sentencing is scheduled for March 3, 2025, with a maximum penalty of 20 years in prison. Additionally, the federal district court judge overseeing the case will weigh multiple factors, including the US Sentencing Guidelines, before issuing a final sentence.
Featured image created with DALL-E, Chart from TradingView
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