With the continuous rise in the market value of cryptocurrencies, it has attracted a large number of investors. However, with the increasing prevalence of fraud and money laundering activities, especially with the development of artificial intelligence and deepfake technology, scams are becoming more sophisticated. Criminals often disguise themselves as trustworthy projects or individuals to gain the trust of victims and deceive them into providing funds.
In February of this year, two individuals named Jingjing He and Yuk Wong were accused of money laundering, fraud, and wire transfer fraud. Last Wednesday (November 6th), Jingjing He submitted a plea application in the Eastern District Federal Court in New York and will face trial in future court hearings.
According to the indictment, Jingjing He, Yuk Wong, and their accomplices orchestrated and implemented a money laundering scheme, where funds from fraud victims were deposited into bank accounts under their control and quickly transferred to other accounts to conceal their illegal origins. The bank accounts they opened were typically established weeks before receiving funds, with limited activity, mainly used for receiving and transferring fraudulent funds. Eventually, these funds were transferred to overseas bank accounts, which were often closed within a few months.
Furthermore, the two defendants were also accused of forging contract documents to conceal the illegitimacy of these funds. These so-called contracts and business transaction documents were actually forged and used to confuse victims and law enforcement agencies.
In June 2022, Victim 1 began communicating with someone named Arlena on Facebook and WhatsApp. Arlena claimed to work for a Hong Kong company that had secured a contract to provide data backup services for a cryptocurrency exchange called Priviumex in Singapore.
Arlena then informed Victim 1 that a customer of Priviumex had over $100 million in cryptocurrency across three accounts. Arlena mentioned that she and her boss had invested $50,000 in Priviumex and successfully received a 13% profit. Arlena even sent a screenshot showing a $1.4 million profit.
Victim 1 became interested in the investment and asked Arlena to trade on their behalf. However, Arlena refused and instead sent a link for Victim 1 to download the Priviumex mobile app and link their Coinbase account to the Priviumex account.
When registering for the Priviumex account, Victim 1 provided a photo of their driver’s license. Arlena then introduced Victim 1 to a supposed Priviumex customer service representative who would assist in trading. The representative instructed Victim 1 to transfer investment funds to multiple US bank accounts.
On July 27, 2022, Victim 1 was instructed to transfer funds to a company bank account named Lucky XC Trading Inc., controlled by Jingjing He and Yuk Wong. Prior to this transfer, the Lucky XC account had a balance of only $100. Eventually, Victim 1 transferred a total of $301,000, which was then moved to a UKDE Limited account controlled by a UK registered individual.
Prior to this, UKDE received a supposed “purchase contract,” claiming that Lucky XC sold 5,000 units of “clothing” to Victim 1. Victim 1 stated they had never seen the contract, even though the signature on the contract closely matched theirs on the driver’s license. However, Victim 1 emphasized that they had stopped signing documents this way since 2022. Law enforcement officers confirmed a significant change in the signature upon reviewing Victim 1’s bank records.
Subsequently, UKDE received another supposed “international trade contract,” stating Lucky XC sold 10,000 units of “sportswear” and “sports shoes” to Victim 1 for $301,000. Victim 1 similarly denied having seen or signed this contract.
In August 2022, Victim 1 once again wire transferred $400,000 to the Lucky XC account, and another victim transferred $50,000. Following this, $449,180 was transferred from the Lucky XC account to the UKDE account. UKDE received yet another supposed “purchase contract.”
After these transactions, Victim 1 was unable to access the funds in Priviumex. They were informed by Priviumex customer service that they could only retrieve their funds by paying a 10% penalty. Arlena provided a bank account for Victim 1 to wire the penalty, ultimately totaling nearly $210,000.
After the transfer, Arlena suggested returning some funds to Victim 1, on the condition that they agreed to wire more money. It was at this point that Victim 1 realized they had been defrauded and ceased contact with Arlena.
During the same period, another victim, Victim 2, chatted with someone claiming to be Lisa on Instagram. Lisa claimed to live in Singapore and directed Victim 2 to download a cryptocurrency app called Bitget to expedite trading and profit realization.
Victim 2 then wired $220,000 to the Lucky XC account, also controlled by Jingjing He and Yuk Wong, which then transferred the funds to a registered bank account in California.
When Victim 2 requested to withdraw funds, they were told to pay an additional $300,000 for “verification” due to alleged security vulnerabilities on the Bitget platform. At this point, Victim 2 realized they had become a victim of fraud and refused to continue paying the fee.