How Did A Trio Pull Off A $10M Bank Fraud Using Crypto?

In a major crackdown, the FBI arrested three persons for allegedly orchestrating a complex $10 million bank fraud scheme.

U.S. Attorney Damian Williams and FBI Assistant Director James Smith announced the arrests of the three persons identified as Zhong Shi Gao, Naifeng Xu and Fei Jiang.

Highlighted was the sophisticated operation that involved manipulating bank transactions and laundering the stolen funds through foreign cryptocurrency exchanges.

The scheme, active from 2018 to 2022, allegedly involved recruiting individuals to open bank accounts, which were then used to transfer and fraudulently double funds.

The trio, along with others, would then file false reports claiming these transfers were unauthorized, prompting banks to credit the accounts.

These funds were quickly withdrawn or converted into cryptocurrency, resulting in substantial losses for nearly a dozen banks.

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The three arrested face charges including bank fraud conspiracy, wire fraud conspiracy, money laundering conspiracy and aggravated identity theft.

Each charge carries significant prison sentences, with bank fraud and wire fraud conspiracies having a maximum sentence of 30 years each.

The investigation was led by the FBI's Asian and African Organized Crime Squad, with collaboration from the FBI Field Office in Oklahoma City.

The case, underscored by Williams, served as a stern warning to potential fraudsters considering cryptocurrency as a means to conceal illegal activities.

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