US Charges Two Over Alleged $43M Laundering Network

Two New York residents have been arrested and charged with conspiracy to commit money laundering over an alleged network that processed at least US$43 million in proceeds from cyber-enabled investment schemes, the U.S. Department of Justice announced on 16 July 2026.

Zhuoying Chen, 27, of Brooklyn, and Haojie Zhang, 38, of Queens, made their initial appearance in federal court in Brooklyn. The indictment was unsealed in the Eastern District of New York. An indictment is merely an allegation, and both defendants are presumed innocent unless proven guilty beyond a reasonable doubt.

Contents

01

How the Alleged Network Operated

02

The Alleged Scheme Pattern

03

Broader Enforcement Context

04

Investigation and Penalties

05

Red Flags for the Public

How the Alleged Network Operated

According to the indictment, between 2020 and 2022, Chen and Zhang managed a network of more than a dozen individuals based in Queens and Brooklyn. The group allegedly opened 140 bank accounts in the names of approximately 45 shell companies.

Prosecutors allege the network laundered at least US$43 million in proceeds from investment schemes. After processing the funds, Chen and Zhang allegedly conspired with co-conspirators based in China to transfer the money abroad.

“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,” said U.S. Attorney Joseph Nocella Jr.

The Alleged Scheme Pattern

The underlying schemes follow a pattern known as “pig butchering,” a term derived from a foreign-language phrase used by perpetrators. According to the indictment, perpetrators contacted victims through messaging services or social media, built trust, displayed fake profits on purported investments, and then stole the victims' funds.

Broader Enforcement Context

The FBI's 2025 Internet Crime Report found investment-related offences accounted for 49% of reported incidents, with losses reaching US$8.6 billion, up from US$6.5 billion in 2024.

In November 2025, U.S. authorities established a task force targeting crypto-related criminal networks after the DOJ seized US$15 billion from the leader of Prince Group. European authorities dismantled two rings in 2026 with losses exceeding €150 million. Daren Li was sentenced in absentia to 20 years in February 2026 for a US$73 million cryptocurrency scheme.

Investigation and Penalties

The case was investigated jointly by the FBI, Homeland Security Investigations, IRS Criminal Investigation, and the U.S. Postal Inspection Service. The prosecution falls under the Homeland Security Task Force initiative established by Executive Order 14159.

If convicted, Chen and Zhang each face a maximum penalty of 20 years in prison.

Red Flags for the Public

The allegations illustrate tactics law enforcement have identified: unsolicited contact via messaging apps or social media, promises of unusually high returns, pressure to invest more after seeing apparent profits, and difficulty withdrawing funds. Authorities urge verifying any investment service's registration before transferring money.