The Federal Bureau of Investigation (FBI) has arrested three individuals accused of defrauding banks in the New York area of over $10 million, which they subsequently attempted to convert into cryptocurrency, between 2018 and 2022.
The method of operation of the accused involved exploiting loopholes in the banking sector, thereby underlining the urgent need for stringent security measures in traditional financial institutions.
The accused, Zhong Shi Gao, Naifeng Xu, and Fei Jiang, allegedly executed this scheme by posing as victims of fraudulent money transfers, prompting financial institutions to credit them with the amount of the supposed unauthorized transfers. This ruse effectively allowed them to double their money through these illegitimate means.
The U.S. Attorney Damian Williams emphasized the seriousness of these crimes in his statement, underscoring that this case should serve as a warning to those who believe they can use cryptocurrency to conceal their identities and criminal activities. The FBI, along with its partner agencies, is committed to identifying and holding such individuals accountable for their actions.
Each of the accused faces four criminal charges in the U.S. District Court for the Southern District of New York. These charges include bank fraud conspiracy, conspiracy to commit wire fraud affecting a financial institution, money laundering conspiracy, and aggravated identity theft. If convicted of all charges, they could face a combined maximum sentence of nearly 100 years.
Additionally, the authorities reported that the accused enlisted foreign nationals from China and Taiwan to open U.S. bank accounts. These accounts were used to manage the transfers, which were falsely represented as unwanted transactions.
The FBI’s successful intervention in this case marks a significant achievement in tackling crypto-related crimes.
