PHILADELPHIA – Xing Zheng, a resident of Queens, New York, has been sentenced to 28 months in prison and three years of supervised release for his involvement in a conspiracy to launder approximately $2.98 million of fraud proceeds. U.S. Attorney David Metcalf announced that Zheng also faces restitution of $426,044 and a forfeiture judgment of $745,000. The money laundering scheme involved stolen Social Security retirement and COVID-19 pandemic relief funds.
Zheng pleaded guilty to conspiracy to commit money laundering in December. According to court documents, he collaborated with an individual using the pseudonyms “Christian Dasilva” and “Christian Hernandez” to launder the fraud proceeds. The scheme included fraudulent applications for SSA Retirement Insurance Benefit (RIB) and COVID-19 Pandemic Unemployment Assistance funds. These applications used stolen identities, with funds directed to bank accounts controlled by the conspirators.
Myrna Ortiz, a related defendant from Philadelphia, worked with “Christian” on this scheme after meeting him through an online dating site. Her role included opening bank accounts to receive fraudulent government funds, which were later laundered through gift cards. Ortiz was sentenced in January to a day in prison and ordered to adhere to two years of supervised release, with restitution totaling $688,049.
From May 2020, “Christian” and Zheng further conspired to launder stolen funds via encrypted communications. Zheng agreed to exchange debit and gift cards for cryptocurrency, knowing the funds originated from unlawful activities. Zheng handled around 1,565 cards with an approximate value of $2.98 million, keeping about 25% of the earnings.
“While Zheng did not personally participate in the fraud against the government, he knew that the money he was laundering was criminally derived,” stated U.S. Attorney Metcalf. Similarly, FBI's Special Agent in Charge, Wayne A. Jacobs, emphasized the commitment to safeguarding relief programs aimed at supporting Americans during crises.
Colleen Lawlor from the SSA Office of the Inspector General in Philadelphia highlighted the gravity of Zheng's actions, as funds vital for beneficiaries were misappropriated. Syreeta Scott from the U.S. Department of Labor underscored Zheng's exploitation of taxpayer resources intended for unemployed American workers, affirming ongoing efforts to protect the unemployment insurance system.
The investigation was carried out by the SSA Office of Inspector General, the FBI, and the Department of Labor Office of Inspector General, with prosecution led by Special Assistant U.S. Attorney Megan Curran.
