Daren Li Faces Up to 20 Years Imprisonment
Daren Li, a 41-year-old Chinese dual citizen, faces a maximum 20-year prison sentence after pleading guilty to his role in laundering funds from a $73 million crypto scam. Li’s conviction follows a complex web of cryptocurrency scams, including “pig butchering” schemes that tricked unsuspecting investors into transferring funds to accounts controlled by Li and his associates.
The plea agreement, filed in California federal court on November 11, detailed how Li coordinated with co-conspirators to open multiple US bank accounts under shell companies. These accounts obscured the origin and ownership of the stolen funds.
Li admitted to instructing his associates to set up these shell companies specifically to conceal the movement of the laundered money, making it challenging for authorities to track.
An International Network and the Crypto Scam
The funds collected from these crypto scams were converted by Li or his cronies to Tether (USDT) and funneled into wallets Li and other conspirators controlled. According to court documents, one of the primary wallets involved received over $341 million in digital assets during the scheme’s operation.
This conversion and distribution process enabled the conspirators to launder the funds on a large scale without attracting immediate suspicion. On November 12, Nicole M. Argentieri, head of the Justice Department’s Criminal Division, stated that Li conducted these actions outside the United States.
She pointed out that he used “a web of shell companies and international bank accounts” to execute the crypto scam. By leveraging global accounts, Li managed to evade initial scrutiny, allowing the scheme to run from August 2021 until his arrest in April 2024.
The total amount laundered includes $73.6 million directly tied to Li’s scheme and an additional $59.8 million funneled through shell companies based in the United States. These figures emphasize the scale of the crypto scam, which prosecutors allege targeted unsuspecting investors worldwide.
Full Restitution for Victims?
Li was detained at Atlanta’s airport on April 12, while his alleged accomplice, Yicheng Zhang, was later apprehended in Los Angeles on May 16. After their arrests, court documents revealed that authorities uncovered more information about the sophisticated methods of transferring and concealing funds across multiple countries.
Following Li’s guilty plea, Judge R. Gary Klausner scheduled a March 3, 2025 sentencing hearing. Li could face up to 20 years in prison and three years of supervised release.
Financial penalties could reach $500,000 or twice the profits generated from the scheme, whichever is greater. Prosecutors also seek full restitution for the victims, amounting to as much as $73 million.
$230M Crypto Scam Targets South Korean Investors
In a related development, South Korean police have uncovered a major crypto scam and arrested 215 individuals. These individuals are connected to a fake investment group that amassed $230 million from over 15,000 unsuspecting investors.
Accordingly, the Gyeonggi Southern Provincial Police Agency’s Anti-Corruption and Economic Crime Unit has detained 12 primary suspects, including the group’s mastermind, a YouTuber known only as “Mr. A.” The accused lured investors into the crypto scam using promises of high returns and misleading promotions.
Mr. A and his associates operated a quasi-investment consulting firm, selling 28 crypto assets to entice victims between December 2021 and March 2023. Quasi-investment firms in South Korea offer debt and equity investments based on a company’s projected profits.
However, the company falsely claimed that its assets were profitable and came with guaranteed returns. Mr. A, who boasts a following of 620,000 subscribers, used his online influence to attract investors.
Fraudulent Scheme Targeted Vulnerable Investors
The crypto scam involved six digital coins listed on various international crypto exchanges. However, Mr. A and his team fabricated the remaining 22 tokens, which had little value, to inflate the scam’s scope.
Most victims of the crypto scam were middle-aged or older individuals who collectively poured substantial life savings into the scheme. Some reportedly invested up to 1.2 billion won, equivalent to over $852,000.
Further, the crypto scam targeted victims of previous financial frauds, promising to “compensate” their earlier losses with new coin investments that supposedly had profitable projections.
However, these assurances turned out to be empty promises.
Fake Coins and ID Theft
The group went as far as impersonating the South Korean Financial Supervisory Service, creating fake IDs, and using fraudulent phone numbers to deceive investors. The crypto scam also collected the identification documents of its investors, claiming the scheme needed them to reimburse losses.
Instead, the firm used these IDs to obtain credit loans in the investors’ names, further increasing the financial damage inflicted by the victims. Hence, the police had to track the fund flow associated with 1,444 accounts tied to this crypto scam.
Mr. A, the primary suspect, fled South Korea through Hong Kong and Singapore but was ultimately detained in Australia. During the investigation, authorities seized 22 Bitcoins, valued at $1.9 million, from him.
Additionally, police have confiscated nearly $34 million worth of assets, including cash and crypto holdings, linked to the scam.
