FBI Arrests Trio Accused of Bilking Banks Out of $10M, Converting Funds to Crypto

Three men allegedly used foreign crypto exchanges to launder the proceeds of a scheme that targeted nearly a dozen financial institutions in the New York metro area.

AccessTimeIconNov 16, 2023 at 6:43 p.m. UTC
Updated Nov 16, 2023 at 8:22 p.m. UTC

Three men duped New York-area banks into shelling out more than $10 million and tried to make off with the money by converting it to crypto, U.S. Attorney Damian Williams said Thursday in a statement.

Zhong Shi Gao, Naifeng Xu and Fei Jiang allegedly stole millions of dollars from nearly a dozen financial institutions throughout the New York metropolitan area between 2018 and 2022, law enforcement officials said. The trio bilked banks out of the funds by posing as victims of fraudulent money transfers, prompting institutions to credit them in the amount of the supposed unauthorized transfers and "effectively doubling their money," according to an indictment.

"These charges should serve as a warning to fraudsters and cybercriminals who think they can turn to cryptocurrency to hide their identities – together with our partner agencies, we will find you and hold you accountable for your crimes," Williams said in the statement.

Each of the accused men has been arrested by the Federal Bureau of Investigation and faces four criminal charges in U.S. District Court for the Southern District of New York: bank fraud conspiracy, conspiracy to commit wire fraud affecting a financial institution, money laundering conspiracy and aggravated identity theft. The maximum sentence for all the charges combined could amount to nearly 100 years, the release shows.

Authorities said the men enlisted foreign nationals from China and Taiwan to open U.S. bank accounts that the trio could use to manage the transfers that they'd pretend were unwanted.

Edited by Jesse Hamilton.


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Elizabeth Napolitano

Elizabeth Napolitano was a news reporter at CoinDesk.