In a major crackdown on global crypto-related financial crime, five individuals have pleaded guilty in connection with a $36.9 million crypto scam that defrauded American victims. The funds were funneled through shell companies and eventually laundered into Cambodia using the stablecoin Tether (USDT).
How the Crypto Scam Was Carried Out
According to U.S. authorities, the defendants used social media, dating apps, and messaging platforms to target Americans. Scammers built trust through months-long communication, falsely promising high returns on cryptocurrency investments.
“Victims were told their investments were increasing in value, but the funds were being stolen from the start,” the U.S. Attorney’s Office said.
The operation involved shell companies, U.S. bank accounts, and cross-border fund transfers. The funds were then converted to USDT and sent to a crypto wallet in Cambodia.
Key Individuals and Their Roles
- Jose Somarriba and Shengsheng He: Created “Axis Digital”, a fake company that received victim funds via a Bahamas-based bank.
- Jingliang Su: Helped convert stolen money into USDT.
- Joseph Wong: Operated a money laundering network, wiring funds overseas.
- Yicheng Zhang: Managed U.S. bank accounts used in the laundering scheme.
The scam was international in scope, with participants based in the U.S., Spain, China, and Turkey.
Harsh Penalties Ahead
- Wong and Zhang face up to 20 years in prison for money laundering conspiracy.
- The other three could receive up to five years for operating an unlicensed money service business.
- Su has remained in custody since November 2024 and will be sentenced on November 17.
Eight individuals have now pleaded guilty in connection with this ongoing crypto fraud investigation.
Wider Crackdown on Crypto Crime
The U.S. Treasury is also intensifying its crackdown on crypto-linked crime, seeking to block Cambodia-based Huione Group from accessing U.S. banking systems. Officials accuse Huione of aiding North Korea’s Lazarus Group in laundering illicit crypto assets.
Huione has been described as a “marketplace of choice for cybercriminals” with deep ties to crypto-based fraud and laundering activities.
Despite efforts to shut down communications on Telegram-based laundering channels, new findings suggest that Huione-linked entities may be evading enforcement through alternate services.
Conclusion
The guilty pleas mark a significant step in dismantling global crypto fraud rings. As enforcement intensifies, authorities are sending a clear message: crypto crime has real consequences, and international actors are not beyond reach.