A man named Daren Li, 41, who holds dual citizenship in China and St. Kitts and Nevis, has admitted to his role in a large scheme to launder money stolen from victims of cryptocurrency scams. Li, who has lived in several countries, including China, Cambodia, and the United Arab Emirates, pleaded guilty to one count of conspiracy to commit money laundering. This crime was part of a larger effort to disguise the origin of millions of dollars taken through cryptocurrency fraud.
The money that Daren Li helped launder came from victims of cryptocurrency scams. These types of scams trick people into investing in fake or non-existent cryptocurrency opportunities, with the promise of making quick profits. Once the scammers had collected enough money from their victims, they turned to people like Daren Li to hide the stolen funds and make them appear legitimate. According to the U.S. Department of Justice, Li was responsible for laundering more than $73 million in stolen money from U.S. citizens.
Role of Shell Companies and Cryptocurrency in the Scheme
Court documents show that Daren Li worked with several others in this illegal operation. Their goal was to hide the origin of the stolen funds and make it harder for authorities to trace where the money was coming from. To do this, they used a complex web of fake companies, called shell companies, and bank accounts in multiple countries. Li communicated with his partners through encrypted messaging services, making it even more difficult for investigators to track their actions.
Daren Li’s main job in the operation was to make sure that victim funds were transferred into bank accounts controlled by him or his co-conspirators. Once the money was in these accounts, it would be converted into a type of cryptocurrency called Tether (USDT). Tether is a stablecoin, meaning it is often used to move money between people or companies without changing the value too much. After converting the funds to Tether, Li and his team would send the cryptocurrency to wallets that they controlled. These wallets are digital spaces where cryptocurrencies can be stored and sent to others.
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A large portion of the stolen money came from U.S. victims. More than $59 million was funneled into shell company accounts based in the United States. Once the money was deposited, it was sent out internationally to other bank accounts and cryptocurrency wallets, making it harder to track. Over $73 million was moved through accounts linked to Li and his co-conspirators.
Investigation and Legal Action Taken Against Daren Li
The case against Daren Li began when he was arrested on April 12, 2023, at the Hartsfield-Jackson Atlanta International Airport. After his arrest, he was taken to California, where he faced charges in the Central District of California. Li’s arrest was a significant step in holding accountable those who are involved in cryptocurrency fraud. The U.S. Department of Justice and other agencies worked together to investigate the case, despite Li being located outside the United States for most of his operations.
Investigators used a variety of tools and partnerships with other countries to track the flow of funds from the scammers to Li and his team. These international connections proved crucial in bringing Li to justice. Agencies like the U.S. Secret Service, Homeland Security Investigations, and Customs and Border Protection worked together to trace the movement of stolen funds and uncover the role of shell companies and cryptocurrency in the scheme.
Daren Li has pleaded guilty to his role in the money-laundering operation, but his sentencing will not take place until March 3, 2025. He faces a maximum sentence of 20 years in prison, though the final decision will be up to the judge. The case serves as a reminder of the global nature of cryptocurrency fraud and the importance of international cooperation in tracking and stopping these types of crimes.
The investigation has also shown how financial criminals, along with the people who help hide their money, can cause significant harm. They not only steal large amounts of money but also make it harder for victims to get justice. The case against Daren Li highlights the ongoing efforts to hold people accountable for such crimes, no matter where they are located in the world.
