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U.S. Attorney for the District of Columbia Jeanine Pirro announced new sanctions Wednesday against Xinbi Guarantee, an online platform she described as “an illicit scamming marketplace” used by Chinese cybercriminals.
According to officials, Xinbi helped facilitate scams targeting Americans by laundering money that victims sent to anonymous individuals online, many of whom were promoting fraudulent cryptocurrency investment opportunities.
Tara McLeese, a special agent with the Secret Service, told reporters that one Virginia resident reported losing $800,000 in a scheme like this.
“Our team was able to follow the funds as they were laundered through the Xinbi Guarantee Network,” McLeese said.
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Pirro said her Scam Center Strike Force restrained $52 million in cryptocurrency that was being used in digital wallets across the Xinbi network.
The Treasury Department designated Xinbi a transnational criminal organization, accusing it of being tied to North Korean hackers and other criminal syndicates.
The designation effectively cuts Xinbi off from the U.S. financial system by prohibiting Americans from doing business with the organization and requiring any blocked assets to be reported to the Treasury’s Office of Foreign Assets Control (OFAC).
Pirro said Xinbi operated as a primarily Chinese-language marketplace on Telegram where scammers could purchase fake investment websites and money laundering services.
Pirro said there was also evidence of Xinbi recruiting trafficking victims to work at scam compounds operating primarily in Southeast Asia.
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“It’s where vendors market their services to scam us,” Pirro said. “Once the scammer purchases a service from the vendor, Xinbi holds the money for the vendor until the vendor’s services are complete.”
“It is a double protection to make sure that Americans are scammed properly and unwittingly,” Pirro added. “Xinbi sells tools of industrial fraud, including custom-built fake investment websites designed to look like real brokerages.”
The U.S. government seized Telegram channels used by Xinbi, cutting off their ability to operate for a time, prosecutors said. This came after a federal court in Washington, D.C., authorized the action on Monday.
In response to a reporter’s question about whether Xinbi could relocate to another platform, Pirro acknowledged it would be “very easy” for the group to establish a new operation.
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“Old crimes are being committed in new ways,” Pirro said. “They’ve got this figured out, and it took us a while to understand where it was coming from, who was doing it, how they were doing it. And now that we understand that we will keep pace, and we will beat them.”
Officials at the press conference repeatedly said Americans should be wary of any investment schemes being freely offered by people they don’t know on social media.
“If you know someone that thinks they’ve got an opportunity that’s too good to be true, or that they’ve been contacted by someone who’s got the in on cryptocurrency,” Pirro said.
She continued: “You’ve got to tell them to stop. Whether it started on a mistaken phone call or WhatsApp or any of the other social media websites. A text, a wrong number. Do not send a dollar. Do not send a penny.”
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Separately, Pirro announced that her team, as well as the FBI, recently traveled to Madagascar and assisted local authorities in shutting down 13 scam centers allegedly being run by Chinese organized crime groups.
Pirro said 500 people were arrested, adding that 30 Chinese leaders of the scam compounds were repatriated to China.
Pirro also said President Donald Trump has been briefed on the cryptocurrency scam operations targeting Americans. To date, the U.S. government says it has restrained $938 million linked to such schemes.
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