A Chinese national has been sentenced to 40 months in federal prison for his involvement in a scheme that laundered millions of dollars from cryptocurrency investment scams. The sentencing was announced by Jay R. Combs, U.S. Attorney for the Eastern District of Texas.
Fei Liao, 31, of San Gabriel, California, pleaded guilty to conspiracy to commit money laundering. In addition to his prison sentence, Liao must forfeit over $2.3 million in seized currency and pay more than $2.8 million in restitution to victims who sent funds to accounts he controlled.
Court records show that Liao and others opened shell companies and bank accounts to process proceeds from cryptocurrency confidence schemes known as “pig butchering” scams. These scams typically involve fraudsters contacting victims through dating services, social media, or unsolicited messages—sometimes pretending they have reached a wrong number. After building trust with the victims, scammers encourage them to invest in cryptocurrencies using platforms under their control. Victims are often shown false gains on these investments and are persuaded to send additional funds. Eventually, they find themselves unable to recover their investments.
The investigation was conducted by the U.S. Secret Service’s Tyler Resident Office and prosecuted by Assistant U.S. Attorney Robert Austin Wells.
Authorities urge anyone who believes they have been targeted by such scams to report incidents at www.IC3.gov, referencing “Pig Butchering PSA.” Reports should include details such as names of investment platforms, cryptocurrency addresses and transaction hashes, bank account information, and contact details for suspected scammers. Individuals are advised to keep copies of all communications with alleged scammers and records of any financial transactions.
