Overview
U.S. federal prosecutors charged two New York residents on July 16, 2026, with conspiracy to commit money laundering after allegedly helping launder at least $43 million stolen from victims of a "pig butchering" cryptocurrency investment fraud scheme.
Zhuoying Chen, 27 (also known as "Jolene"), and Haojie Zhang, 38 (also known as "Kevin"), were arrested and made initial appearances in federal court in Brooklyn the following day. Both face charges brought by the U.S. Attorney's Office for the Eastern District of New York (EDNY), led by U.S. Attorney Joseph Nocella Jr. A conviction on the single count carries a maximum sentence of 20 years in federal prison.
What Is Pig Butchering Fraud?
Pig butchering — known in Chinese criminal circles as sha zhu pan ("slaughtering the pig") — is a sophisticated and emotionally manipulative fraud scheme that has exploded into one of the most costly forms of cybercrime globally.
The scam operates in calculated stages:
- First contact — Scammers reach out to victims via social media or messaging apps, often feigning a wrong number, romantic interest, or chance connection
- Trust building — Weeks or months are spent cultivating a personal relationship and manufacturing emotional trust with the victim
- The investment hook — Victims are introduced to what appears to be a lucrative cryptocurrency or investment trading platform, complete with fake account dashboards showing fabricated profits
- Escalation — Victims are encouraged to invest more and more money, often liquidating retirement accounts and taking out loans
- The vanishing act — Once scammers are satisfied with the deposited total, they disappear with all funds, leaving victims with nothing
FBI data shows U.S. investment fraud losses climbed to $7.2 billion in 2025, a 24% increase over the prior year, with pig butchering as the primary driver.
The Alleged Money Laundering Network
Prosecutors allege Chen and Zhang were not the scammers themselves, but the financial infrastructure behind them — the people who cleaned the money and moved it out of U.S. reach.
Between 2020 and 2022, they allegedly:
- Managed a network of more than a dozen co-conspirators
- Opened 140 bank accounts held under approximately 45 shell companies
- Received victim "investment" deposits into those accounts
- Transferred at least $43 million to co-conspirators in China, moving proceeds beyond U.S. law enforcement jurisdiction
The shell company structure was designed specifically to obscure the money's origin and make the financial trail difficult to reconstruct — a tradecraft staple in Chinese organized crime money laundering operations.
FBI Investigation and Broader Context
The case was investigated by the FBI New York's Joint Asian Criminal Enterprise Task Force. It is one of several high-profile prosecutions resulting from the DOJ's Scam Center Strike Force, launched in November 2025 to specifically target Chinese organized crime networks that run fraud operations primarily out of Southeast Asia.
This arrest follows a landmark 2025 action in which DOJ seized approximately $15 billion in bitcoin linked to the Cambodian-based Prince Holding Group network — one of the largest cryptocurrency seizures in history.
A related 2024 EDNY case charged eleven defendants for laundering $18 million across a similar network of pig butchering victims.
How to Protect Yourself
Pig butchering scams are engineered to be virtually invisible until it's too late. Key warning signs:
- Unsolicited contact from strangers on social media, WhatsApp, or Telegram — especially those who quickly shift to discussing investment opportunities
- Too-good-to-be-true returns shown on investment platforms you've never heard of
- Pressure to invest more before you can withdraw existing "profits"
- Inability to withdraw funds once you attempt to take money out
- Platforms that are not registered with FINRA, the SEC, or your country's financial regulator
If you believe you've been targeted, report to the FBI's Internet Crime Complaint Center (IC3) at ic3.gov and your local field office immediately. Early reporting maximizes the chances of asset recovery.