2 Staten Island brothers charged with ‘pig butcher’ scam that defrauded investors of $18 million, feds say

STATEN ISLAND, NY – Two Staten Islanders orchestrated a multimillion-dollar investment fraud and money laundering scheme called a “pig-cutting” scam because it bled more than 200 victims, according to federal prosecutors.

Brothers Jin Hua Zhang, 35 years old; and Jin Fu Zhang, 39, are among 11 defendants charged in the $18 million illegal business called “Sha Zu Pan” and the “butcher shop scam,” federal prosecutors in Brooklyn said.

The defendants also operated an unlicensed money transfer business in which they allegedly converted about $52 million in cash into cashier’s checks on behalf of customers, officials said.

An indictment said the scam lasted around 15 months from May 2021 to August this year.

It worked this way:

The victims were contacted on messaging apps, such as WhatsApp, by strangers who claimed to have made money by investing in cryptocurrency and forex markets, authorities said.

Once convinced to invest, the victims were directed by alleged account managers to wire funds to specific bank accounts, prosecutors said.

The defendants used false names, forged Chinese passports and other people’s IDs to open those bank accounts, officials said.

The victims were then denied the ability to withdraw their invested funds, officials said.

The Zhangs oversaw the scam and managed a network of individuals who laundered victims’ money in other bank accounts or withdrew those funds, authorities said.

In addition to the investment plan, the defendants allegedly operated an illegal underground “bank”.

They received large sums of money from customers and converted that money into cashier’s checks issued by commercial banks, according to the indictment.

The defendants then returned the cashier’s checks to the customers in exchange for a commission, calculated as a percentage of each transaction, according to the indictment.

In total, the defendants converted about $52 million in cash into cashier’s checks for clients, officials said.

The indictment was announced by Breon Peace, U.S. Attorney for the Eastern District of New York; Michael J. Driscoll, Deputy Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI); Frank A. Tarentino III, Special Agent in Charge, Drug Enforcement Administration, New York Division (DEA), and Keechant L. Sewell, Commissioner, New York City Police Department (NYPD).

“For once, the name of a scam – pig butcher – reflects the grotesque nature of the harm it causes to victims,” ​​Driscoll said in a statement. “We allege these fraudsters bled each of their victims dry and then used the money to create fake cryptocurrency accounts.”

Driscoll said authorities believed there were “significantly more victims” and urged them to contact the FBI.

Authorities have not said where the Zhangs live on Staten Island.

Information about their lawyers was not immediately available.