Twelve more Americans and foreign individuals have been accused in a superseding indictment released Thursday in the U.S. District Court in relation to an alleged racketeering conspiracy that robbed victims of more than $263 million in bitcoin.
The case, described by federal prosecutors as one of the largest coordinated crypto fraud schemes to date, accuses the defendants of participating in a transnational operation involving wire fraud, money laundering, and identity theft.
Crypto Fraud Suspects Arrested in California, Two at Large in Dubai
According to the U.S. Department of Justice, several of the newly charged individuals were arrested this week in California.
Two others remain at large and are believed to be residing in Dubai. The indictment expands on an earlier case targeting a network of criminals who allegedly lured victims into fraudulent crypto investment platforms—commonly known as “pig butchering” scams—that promised high returns but ultimately siphoned user funds.
The operation involved elaborate social engineering tactics and fake websites designed to mimic legitimate trading platforms.
Prosecutors say the stolen funds were laundered through a complex web of digital wallets and shell companies.
The Justice Department emphasized its continued commitment to investigating and dismantling international fraud rings that exploit emerging financial technologies and defraud investors in the rapidly evolving crypto space.
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Defendants Face Charges Including Fraud, Racketeering, and Money Laundering
The defendants are charged with a number of significant offenses, such as conspiracy to conduct wire fraud, racketeering conspiracy, money laundering, and obstruction of justice.
An prior prosecution against Malone Lam, a key player in the purported scam, was brought in September 2024, and the superseding indictment builds on that case.
Lam was first charged after more than 4,100 bitcoin, valued at over $230 million at the time, were stolen a month earlier. Independent blockchain investigator ZachXBT was the first to make the world aware of the loss after his on-chain analysis helped track down the source of the stolen money.
According to the prosecution, the defendants ran a sophisticated global fraud ring that covered up their illicit activities by employing phony investment platforms and a network of wallets and dummy corporations to launder money.
Stolen Crypto Funded Jets, Supercars, and $500K Nightclub Tabs
Prosecutors claim that the defendants’ lavish lifestyle was funded by the stolen cryptocurrency, which included rentals of private jets, a fleet of exotic cars worth between $100,000 and $3.8 million, high-end luxury watches and designer clothes, and nightclub bills that exceeded $500,000 in a single night.
The extravagant spending was only one aspect of the purported plan. The organization is suspected of using advanced money laundering methods to hide the source of the stolen funds.
These included the use of VPNs to conceal their digital footprints, bitcoin mixers, “peel chains” to progressively move assets via many wallets, and phony identities on multiple sites.
These strategies, according to prosecutors, were meant to circumvent law enforcement and validate the gains from one of the biggest cryptocurrency scams ever.
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