Online investment victims were allegedly shown profits that appeared to grow as they sent more money. Prosecutors say the returns were fake, but the bank accounts receiving their funds were real.
A Brooklyn woman and a Queens man are accused of managing a money-laundering network that moved at least $43 million generated by cyber investment scams.
The operation apparently used approximately 45 shell companies and 140 bank accounts opened by more than a dozen people in Brooklyn and Queens.
Federal prosecutors said the money was ultimately transferred overseas to accounts in China after victims were persuaded to invest through relationships developed on messaging services and social media.
The Scammers Built Trust Before Introducing the Investment
The underlying frauds began when scammers contacted potential victims through messaging platforms or social media applications, according to the Justice Department.
Once that trust had been established, the scammers reportedly introduced what they described as lucrative investment opportunities. Victims were then directed to send money and shown apparent profits connected to their investments.
The investment balances gave victims the impression that the strategy was working. The displayed gains encouraged them to continue funding accounts or platforms that appeared profitable.
Behind those numbers, prosecutors said the scammers were stealing the money rather than placing it into legitimate investments. The scheme is commonly described as pig butchering, a form of long-term investment fraud in which criminals cultivate trust before gradually increasing the financial demands.
About 45 Shell Companies Held 140 Bank Accounts
Prosecutors identified Zhuoying Chen, 27, of Brooklyn, and Haojie Zhang, 38, of Queens, as managers of the U.S.-based laundering network. Chen is also known as “Jolene,” and Zhang is also known as “Kevin,” according to the indictment summarized by federal prosecutors.
Between 2020 and 2022, they allegedly supervised more than a dozen people who opened bank accounts under shell-company names in Brooklyn and Queens. The network included approximately 45 companies and 140 accounts.
The shell companies and numerous bank accounts allegedly created layers between the original victims and the final destination of their money. Prosecutors described the defendants as key participants in a network that funneled more than $40 million into Chinese accounts.
Both Defendants Face a Federal Money Laundering Charge
Chen and Zhang were arrested and appeared in federal court in Brooklyn on July 16. Each is charged with conspiracy to commit money laundering derived from cyber investment fraud.
The charge carries a maximum possible sentence of 20 years in federal prison. The maximum penalty does not mean that sentence will be imposed.
The FBI, Homeland Security Investigations, IRS Criminal Investigation, and the U.S. Postal Inspection Service are investigating the case. The indictment remains pending, and the court has not determined whether either defendant participated in the alleged network.
Fake Profits Are Used to Pull in More Money
The FTC warns that investment scammers often show fake reports of growing money and push people to invest more. Those numbers can be used to persuade victims to send larger transfers, pay more fees, or keep the money inside the platform instead of trying to withdraw it.
Consumers should be cautious when an online acquaintance, romantic contact, social media connection, messaging-app contact, or “wrong number” conversation turns into investment advice.
Anyone who believes they sent money to a fake investment platform should stop sending funds, preserve all records, contact their bank or crypto exchange immediately, and report the scheme to the FTC at ReportFraud.ftc.gov, the FBI’s Internet Crime Complaint Center at IC3.gov, and the SEC or CFTC when securities, commodities, forex, or digital assets are involved.