James Zhong pled guilty to committing wire fraud after illegally obtaining more than 50,000 Bitcoin from Silk Road dark web marketplace.
Approximately 50,676.17851897 Bitcoin, then valued at over 3.36 billion dollars were seized by law authorities from Zhong’s Gainesville, Georgia, home on November 9, 2021, as a result of a court-authorised order for his premises search.
This seizure, which is still the second-biggest financial arrest in the history of the United States Department of Justice, was at the time the largest cryptocurrency seizure in the Department’s record.
Approximately 51,680.32473733 Bitcoin, Zhong’s 80 per cent stake in RE and D Investments, LLC, a Memphis-based business with significant real estate holdings, $661,900 in cash taken from Zhong’s residence, and different metals recovered from Zhong’s home are all subject to forfeiture requests from the government.
“James Zhong committed wire fraud more than ten years ago when he took almost 50,000 Bitcoin from Silk Road. The whereabouts of this substantial amount of missing Bitcoin have grown into a $3.3 billion mystery over the course of roughly ten years,” stated U.S. Attorney Damian Williams.”
“Law enforcement discovered and retrieved this impressive hoard of criminal money thanks to cutting-edge cryptocurrency tracing and traditional police operations. This case demonstrates that we will continue to pursue the money, regardless of how well it is concealed, even if it leads to a circuit board at the base of a popcorn container,” added Williams.
Tyler Hatcher, the special agent in charge of the IRS-CI, stated that Zhong had carried out a complex plot to steal bitcoin from the infamous Silk Road Marketplace.
Once he had carried out the theft successfully, he made an effort to conceal his loot through a series of intricate transactions, hoping that his secrecy would be strengthened by his use of the “darknet.”
“The greatest in the world at tracking down money online or wherever our financial investigations take us are IRS-CI Special Agents. We’ll keep collaborating with our colleagues at the US Attorney’s Office to find these offenders and prosecute them,” Hatcher said.
Agents of the IRS-CI seized roughly 50,491.06251844 Bitcoin of the Crime Proceeds from Zhong’s Gainesville, Georgia, home on November 9, 2021, in accordance with a judicially approved premises search warrant.
Of the approximately 53,500 Bitcoin Crime Proceeds, law enforcement specifically found 50,491.06251844 Bitcoin in an underground floor safe and on a single-board computer that was hidden under blankets in a popcorn tin kept in a bathroom closet.
Law authorities also found 661,900 dollars in cash, 25 Casascius coins, which have a physical bitcoin worth of almost 174 bitcoins each, 11.1160005300044 more bitcoins, four one-ounce silver-colored bars, three one-ounce gold-colored bars, four 10-ounce silver-colored bars, and one gold-colored coin.
Zhong started voluntarily handing over to the government any extra Bitcoin that he had access to but had not yet spent starting in or around March 2022.
Zhong voluntarily gave up a total of 1,004.14621836 more Bitcoins.
Last week, Judge Gardephe entered a Consent Preliminary Order of Forfeiture as to Specific Property and Substitute Assets/Money Judgment forfeiting Zhong’s stake in conjunction with Zhong’s guilty plea.
Zhong, 32, pleaded guilty to one count of wire fraud, which carries a possible 20-year prison sentence.
Zhong is from Gainesville, Georgia, and Athens, Georgia.
