Kazakhstani National Pleads Guilty to Money Laundering for “Hack and Dump” Scheme
WASHINGTON – Alexey Li, 21, a citizen of Kazakhstan who entered the United States on a student visa, pleaded guilty today before U.S. District Judge Ewing Werlein, Jr. to aiding and abetting money laundering, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Kenneth Magidson for the Southern District of Texas.
Li and three co-conspirators were charged in an indictment filed in the Southern District of Texas and unsealed in December 2011.
According to court documents, Li agreed to launder funds generated in a sophisticated “hack and dump” stock scheme that caused more than $400,000 in losses. The indictment charges that Li’s co-conspirators illegally accessed brokerage accounts to engage in a stock fraud scheme in which the compromised accounts were used to purchase borrowed shares of stock at above-market prices from the defendants’ personal brokerage accounts. Li’s co-conspirators then repurchased the borrowed shares at the considerably lower market price, returned the borrowed shares to the stock lender and claimed as profit the difference between the market price and the inflated price paid by the compromised victim accounts.
At sentencing, Li will face a maximum penalty of 10 years in prison and a $250,000 fine.
This case was investigated by the FBI. The case is being prosecuted by Trial Attorney Ethan Arenson of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Mark McIntyre of the Southern District of Texas.
Criminal indictments are only charges and are not evidence of guilt. All defendants are presumed innocent until and unless proven guilty by proof beyond a reasonable doubt in a court of law.