DOJ Busts Chinese Network Accused Of Laundering $43 Million…
Federal prosecutors have charged two alleged members of a Chinese money laundering network accused of helping move at least $43 million in proceeds from investment fraud schemes through a web of shell companies and U.S. bank accounts before transferring the funds to China.
The U.S. Department of Justice announced that Zhuoying Chen, 27, of Brooklyn, New York, and Haojie Zhang, 38, of Queens, New York, made their initial court appearances after an indictment was unsealed in the Eastern District of New York. Prosecutors allege the pair conspired to launder proceeds generated by cyber-enabled investment fraud scams between 2020 and 2022.
If convicted, each faces a maximum sentence of 20 years in prison for conspiracy to commit money laundering.
140 Bank Accounts Across 45 Shell Companies
According to the indictment, Chen and Zhang allegedly managed a network of more than a dozen individuals operating throughout Queens and Brooklyn who opened approximately 140 bank accounts under the names of around 45 shell companies.
Prosecutors allege those accounts were used to receive and move at least $43 million generated by fraudulent investment schemes before the money was transferred to co-conspirators based in China.
The Justice Department alleges the defendants maintained the financial infrastructure that enabled fraud proceeds to be collected, layered through numerous corporate entities and ultimately moved overseas, making it more difficult for law enforcement and financial institutions to trace stolen funds.
Victims Lured Through Social Media And Messaging Apps
According to prosecutors, the underlying fraud schemes followed a pattern that has become increasingly common in international investment scams.
Fraudsters allegedly contacted victims through messaging platforms and social media applications, gradually building personal relationships before introducing what appeared to be lucrative investment opportunities. Victims were shown fabricated investment returns designed to encourage larger deposits before their money was ultimately stolen.
The schemes resemble the “pig butchering” investment fraud model that has become one of the fastest-growing forms of cyber-enabled financial crime worldwide, combining social engineering with fake investment platforms to persuade victims to transfer increasingly larger sums.
DOJ Targets Financial Networks Behind Investment Fraud
Rather than focusing solely on the individuals communicating with victims, prosecutors emphasized that dismantling the financial infrastructure supporting international fraud has become a key enforcement priority.
Assistant Attorney General A. Tysen Duva said the defendants allegedly enabled scammers to continue targeting Americans by laundering the proceeds of investment fraud.
“As alleged in the indictment, the defendants laundered fraud proceeds, enabling scammers to continue to victimize Americans and deprive them of their hard earned money. Dismantling Chinese money laundering networks that support investment fraud schemes is critical to protecting Americans. The Criminal Division will relentlessly pursue the financial networks that fuel and profit from these fraud schemes.”
U.S. Attorney Joseph Nocella Jr. alleged that the defendants were key members of a sophisticated network that transferred more than $40 million in victim funds into bank accounts in China.
“As alleged, the defendants were key members of a sophisticated money laundering network that funneled over $40 million in victim funds to bank accounts in China. Our Office will continue in its strong tradition of holding accountable anyone who seeks to prey on vulnerable victims with investment fraud schemes.”
Multiple Federal Agencies Investigated
The investigation was conducted by the FBI, Homeland Security Investigations, IRS Criminal Investigation and the U.S. Postal Inspection Service.
Officials from each agency said the case demonstrates the increasing cooperation between federal investigators targeting transnational financial crime, particularly organizations that facilitate investment fraud by providing money laundering services.
The prosecution is also part of the Homeland Security Task Force initiative established under Executive Order 14159, which focuses on dismantling transnational criminal organizations and the financial networks that support them.
Money Laundering Networks Under Growing Pressure
The case reflects a broader shift in U.S. enforcement strategy toward pursuing the financial facilitators behind large-scale cyber fraud rather than only the individuals directly communicating with victims.
Investment scams have become one of the largest sources of financial losses reported to U.S. authorities, with organized criminal groups increasingly relying on sophisticated laundering networks that use shell companies, nominee directors and large numbers of bank accounts to disguise the origin of illicit proceeds before moving funds across international borders.
By targeting the infrastructure used to move stolen money, prosecutors aim to make it more difficult for international fraud organizations to monetize investment scams and continue operating across multiple jurisdictions.
The allegations remain accusations, and Chen and Zhang are presumed innocent unless and until proven guilty in court.