Naperville man charged in “pig butchering” cryptocurrency scam

3 views 7:41 am 0 Comments December 19, 2023

A Naperville man was charged for his alleged role in what’s known as a “pig butchering” cryptocurrency scam which cost victims more than $80 million.

Hailong Zhu, 40, has been charged with conspiracy to commit money laundering, concealment of money laundering, and international money laundering, according to a news release from the U.S. Department of Justice (DOJ). 

“Pig butchering” scheme

A “pig butchering” scheme involves reaching out to victims, gaining their trust, and eventually introducing the idea of investing for them. Once funds are transferred, false gains are shown to the target over time. The victims cannot withdraw the fake gains, resulting in significant losses.

The name for the scheme comes from the idea of fattening up a pig before slaughter.

Federal agents say Zhu and California residents Lu Zhang, Justin Walker, and Joseph Wong, would allegedly cold call people on social media platforms and dating apps, eventually introducing the idea of investing in cryptocurrency. 

They allegedly conspired to open shell companies and both domestic and international bank accounts to launder the money received from victims. The group’s scheme involved at least 284 transactions, totaling more than $80 million in stolen funds.

Officials say more than $20 million from victims was directly deposited into bank accounts tied to the defendants.

Zhang and Walker appeared in federal court on Wednesday. If convicted, they are each facing a maximum penalty of 20 years in prison. 

Zhu and Wong have not yet been arrested.

Zhu’s previous legal troubles

Zhu, a Chinese national, arrived in Illinois early this year on a one-way flight from California, federal investigators said.

According to court documents, Zhu was charged in another cryptocurrency money laundering case out of Virginia, in which he was accused of using his Illinois state identification card for the bank account used to defraud victims.

Zhu was acquitted of those charges in September and was released from custody, according to court documents.

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