A 25-year-old man pleaded guilty Thursday in federal court for his part in money laundering for $13 million stolen from victims of an investment scam authorities call “pig butchering.”
Mingzhi Li pleaded guilty to conducting an unlicensed money transmitting business and was scheduled to be sentenced Nov. 20. Co-defendants Zeyue Ji and Jun Shi are next due in court Oct. 16.
“Mr. Li is a naive college student who got talked into opening a bank account for some big-time fraudsters,” his attorney, Dean Steward, said. “He deeply regrets his actions and takes full responsibility.”
Li said in court papers that he was recruited by “two people who are not currently part of this case,” in December of 2022. He was asked to open an account at Citibank in Los Angeles.
“At the request of the outsiders, I went to a Citibank branch with Jun Shi and one other person,” Li said in a statement filed in the case. “The three of us used false information from the outsiders to open an account. The false information included a passport with my photo but the other information in the passport was false.”
Li falsely claimed to be CEO of a Magic Location Trading LLC and opened a new account, he said.
He used a false name of Zheng Lin and declared it was a men’s clothing business and that he owned 80% of it, he said.
A “fake internet website that supported the fraud” was supplied to him along with other phony information he used to open an account, he said.
He said he was also instructed to get a credit card machine, but the bank did not have one. He thought he would make as much as $1,000 to $2,000, but he only ended up with $400 in cash later, he said.
The money came after he was told in early February 2023 that he could “get in a lot of trouble for opening the Citibank account, he said. So he arranged to have the account shut down, but the fraudsters overseeing the scam asked for the fake passport back, he said.
He said he only checked the account once and the “balance was less than $50,” he said.
The three were accused of operating an unlicensed money-transmitting business, prosecutors said.
Shi set up Magic Location Trading LLC and Stone Water Training LLC Dec. 7, 2022.
Investment fraud victims sent money to the bank accounts with investigators determining 242 wire transfers to Stone Water totaling about $7.6 million and 60 wire transfers to Magic Trading totaling about $5.4 million, prosecutors said.
Some of the money was then set to overseas bank accounts.