Eleven Defendants Arrested for Investment Fraud, Money Laundering and Unlicensed Money Transmitting Business Schemes | USAO-EDNY | Department of Justice

2022-10-16 18:49:50 By : Ms. Molly Xu

An indictment was unsealed today in federal court in Brooklyn charging Jin Hua Zhang, Gregory Armand, Chen Chen, Yanbin Chen, Yanbing Chen, Changgui Huang, Xin Jin, Jiahui Miao, Lingming Zeng, Jin Fu Zhang and Hua Zhou with various offenses, including money laundering conspiracy, wire fraud conspiracy, bank fraud conspiracy, passport fraud conspiracy, aggravated identity theft and conspiring to operate an unlicensed money transmitting business.  The defendants were arrested and arraigned today, in federal court in Brooklyn before United States Magistrate Judge Peggy Kuo. One defendant remains at large.

Breon Peace, United States Attorney for the Eastern District of New York; Michael J. Driscoll, Assistant Director‑in‑Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Frank A. Tarentino III, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), and Keechant L. Sewell, Commissioner, New York City Police Department (NYPD) announced the indictment.

“As alleged, nearly $18 million was swindled from over 200 victims throughout the country and laundered through the defendants’ sophisticated money laundering scheme,” stated United States Attorney Peace.  “These 11 arrests demonstrate the seriousness of financial fraud and the commitment of this Office and our law enforcement partners to rooting out bad actors and protecting victims.”

“For once the name of a scam - pig butchering - reflects the grotesque nature of the harm it causes victims. We allege these fraudsters bled dry each of their victims and then used the money to set up fake cryptocurrency accounts. We know there are many more victims of these types of scams, and we urge those people to report it to the FBI. We will do all we can to bring each and every criminal to justice,” stated FBI Assistant Director-in-Charge Driscoll.  

“Drug trafficking is often linked with other criminal activities like money laundering, fraud and conspiracy,” said DEA Special Agent In Charge Frank Tarentino.  “DEA’s partnership with the FBI and the U.S. Attorney’s Office for the Eastern District of New York has resulted in shutting down a multi-million dollar investment fraud and money laundering scheme operating in our backyard.   I commend the agents, officers, and attorneys for their diligence throughout this investigation.”

“These defendants betrayed the trust of hundreds of people for profit, stealing millions of dollars through their brazenly callous investment scheme,” said NYPD Commissioner Sewell. “The NYPD and our law enforcement partners will continue to aggressively pursue anyone who seeks to defraud and victimize others, holding them fully accountable for their actions. I want to thank and commend the U.S. Attorney for the Eastern District, the New York Field Office of the FBI, the DEA’s New York Division, and our NYPD investigators for their tireless work on this case.”

According to the indictment and a memorandum filed in connection with the defendants’ bail hearings, the defendants engaged in a money laundering conspiracy dating back to May 2021 in which they laundered proceeds from an investment fraud scheme referred to as “Sha Zu Pan” or the “pig butchering” scam.  Through this scam, more than 200 victims were contacted through messaging applications and convinced to invest almost $18 million in trading platforms by sending funds to purported money manager bank accounts that were later stolen.  The defendants also operated an unlicensed money transmitting business in which they converted approximately $52 million in cash into cashier’s checks on behalf of customers.  As payment for their services, the defendants received a fee, which was generally a portion of the fee that the business received.  As part of these criminal schemes, the defendants opened bank and cryptocurrency accounts under false names, using forged passports and identification documents of real people.

This case is part of an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) investigation led by the United States Attorney’s Office for the Eastern District of New York and the FBI. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking, weapons trafficking, and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply. OCDETF uses a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC).  As the leader of the subcommittee, Mr. Peace will play a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes including mail and wire fraud, bank fraud, health care fraud, tax fraud, securities and commodities fraud, and identity theft. 

The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.

The government’s case is being handled by the Office’s Public Integrity section.  Assistant United States Attorneys Benjamin Weintraub and Miranda Gonzalez are in charge of the prosecution. Assistant United States Attorney Brian Morris of the Office’s Asset Recovery section is handling forfeiture matters.

JIN HUA ZHANG Age: 35 Staten Island, New York

GREGORY ARMAND Age: 44 Belleville, New Jersey

CHEN CHEN Age: 33 Queens, New York

YANBIN CHEN Age: 24 Queens, New York

YANBING CHEN Age: 28 Brooklyn, New York

CHANGGUI HUANG Age: 30 Brooklyn, New York

XIN JIN Age: 33 Brooklyn, New York

JIAHUI MIAO Age: 24 Cliffside, New Jersey

LINGMING ZENG Age: 37 Brooklyn, New York

JIN FU ZHANG Age: 39 Staten Island, New York

HUA ZHOU Age: 33 Queens, New York

E.D.N.Y. Docket No. 22-CR-458 (LDH)

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