A pair of New York residents have been charged in a federal indictment accusing them of running a sophisticated money laundering network that moved tens of millions from U.S. investment fraud victims into overseas bank accounts.

Federal prosecutors say the case centers on a long-running scheme tied to cyber investment scams that targeted Americans through social platforms and messaging apps. Two defendants made an initial court appearance in Brooklyn this week as investigators disclosed the scope and mechanics of the alleged operation.

According to the indictment, the defendants are identified as Zhuoying Chen, 27, of Brooklyn, New York, and Haojie Zhang, 38, of Queens, New York. The filings allege the pair ran a network of more than a dozen associates who created 140 bank accounts under roughly 45 shell companies to move illicit proceeds.

Prosecutors say the activity occurred between 2020 and 2022 and that the network helped launder at least $43 million obtained through the frauds. The complaint further alleges Chen and Zhang conspired with co-conspirators in China to route stolen funds out of the country and into overseas accounts.

The schemes described in the indictment used social apps and messaging services to recruit victims, then fostered trust through fabricated trading gains. Victims were shown fake profits and repeatedly encouraged to send more money, at which point the operators allegedly seized the funds and moved them through the shell-company accounts.

“As alleged in the indictment, the defendants laundered fraud proceeds, enabling scammers to continue to victimize Americans and deprive them of their hard earned money,” said Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division. “Dismantling Chinese money laundering networks that support investment fraud schemes is critical to protecting Americans. The Criminal Division will relentlessly pursue the financial networks that fuel and profit from these fraud schemes.”

The single federal count in the indictment charges conspiracy to commit money laundering, a felony that carries a maximum sentence of 20 years in prison. Prosecutors emphasized that an indictment is merely an allegation and that defendants are presumed innocent until proven guilty in court.

“As alleged, the defendants were key members of a sophisticated money laundering network that funneled over $40 million in victim funds to bank accounts in China,” said U.S. Attorney Joseph Nocella Jr. for the Eastern District of New York. “Our Office will continue in its strong tradition of holding accountable anyone who seeks to prey on vulnerable victims with investment fraud schemes.”

The investigation involves multiple federal law enforcement partners, including the FBI New York Field Office, Homeland Security Investigations New York, IRS Criminal Investigation New York, and the U.S. Postal Inspection Service New York. Prosecutors and agents say coordinated interagency work was crucial to tracing the financial flows overseas.

“The defendants’ alleged operation laundered more than $40 million from American victims and deposited them directly in Chinese accounts overseas,” said Assistant Director in Charge James C. Barnacle Jr. of the FBI’s New York Field Office. “The FBI is committed to working alongside our federal partners to dismantle scam compounds that seek to steal the hard-earned money of our citizens.”

Trial Attorneys Claire Galasso, David Ginensky, and Adrienne Rosen of the Money Laundering, Narcotics and Forfeiture Section and Assistant U.S. Attorneys Benjamin Weintraub and David Berman for the Eastern District of New York are prosecuting the case. MNF Financial Investigator Sheila Olander assisted in the probe alongside former MNF Financial Investigator Kelly O’Mara.

“For nearly two years, these two Chinese nationals allegedly ran a sophisticated, illicit network that laundered funds stolen from unsuspecting victims’ life savings,” said Acting Executive Associate Director John A. Condon of U.S. Immigration and Customs Enforcement Homeland Security Investigations. “Thanks to the dedicated efforts of HSI and our partners on the Homeland Security Task Force, this dangerous criminal enterprise has been exposed. HSI special agents remain relentless in their pursuit to dismantle money laundering networks and bring to justice anyone who seeks to profit from defrauding hard-working Americans.”

The Money Laundering, Narcotics and Forfeiture Section describes its work as focused on removing the profit motive from crime and protecting the integrity of the U.S. financial system. That mission covers criminal prosecutions, asset recovery, and investigations into facilitators and gatekeepers who move illicit proceeds for drug traffickers, transnational criminal organizations, and other criminal enterprises.

“Today’s indictment shows we’re not backing down against fraudsters who target innocent people — justice is coming for those who steal from hardworking Americans,” said Special Agent in Charge Harry T. Chavis Jr. of IRS Criminal Investigation New York. “This case reflects how IRS‑CI and our partners work side‑by‑side to uncover money‑laundering networks and protect the public. Together, we’re pushing forward to ensure Americans’ hard‑earned money is safe from schemes like these.”

MNF’s Money Laundering and Forfeiture Unit specifically handles complex cases that involve financial facilitators, gatekeepers, and layered transactions designed to hide criminal proceeds. That unit also handles civil forfeiture litigation aimed at recovering assets on behalf of victims and the government.

“Investment fraud schemes exploit the trust of victims through false promises of favorable returns,” said Inspector in Charge Ketty Larco-Ward of the U.S. Postal Inspection Service’s New York Division. “The US Postal Inspection Service is committed to investigating fraud and protecting the community from those who seek to profit through deception.”

This prosecution is also tied to a broader Homeland Security Task Force effort launched under Executive Order 14159, Protecting the American People Against Invasion, which coordinates federal resources against transnational criminal organizations. The task force prioritizes investigations into cartels, foreign gangs, human smuggling and trafficking, and other violent criminal activity that affects communities in the United States and abroad.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.