Daren Li, a Chinese-American citizen, recently pleaded guilty to laundering millions of dollars linked to crypto investment scams in the United States.
Crypto Money Laundering Scheme Exposed
According to a plea agreement filed on November 11 in a California federal court, the 41-year-old admitted to operating a sophisticated scheme that laundered $73 million through U.S.-based shell companies and manipulated global banking channels. The scams, running from August 2021 to April 2023, largely targeted victims through schemes like 'pig butchering,' a form of romance scam where fraudsters groom victims into investing in fake crypto projects.
Complex Network of Shell Companies and International Accounts
In a statement, Nicole M. Argentieri, Head of the Justice Department’s Criminal Division, noted that Li’s operation extended far beyond U.S. borders. Through an intricate web of shell companies and foreign bank accounts, the money laundering network disguised not only the destination but also the scale of the funds involved. Approximately $73.6 million flowed directly into bank accounts associated with Li’s scheme, while at least $59.8 million was transferred via U.S.-based shell companies specifically created to mask illicit crypto activities.
Upcoming Sentencing and Potential Restitution
Having pleaded guilty, Li now faces a maximum sentence of 20 years in prison, with additional fines totaling up to $500,000 or twice the offense’s gross proceeds. Judge R. Gary Klausner has scheduled a sentencing hearing for March 3, 2025, during which Li may also be required to pay full restitution to his victims. Prosecutors estimate this restitution could range between $4.5 million and $73 million, depending on the final court determination.
The Justice Department continues to address such crypto-related fraud cases, underscoring its commitment to cracking down on transnational cybercrime.
