Five men have admitted to participating in an international cryptocurrency scam scheme worth $36.9 million that targeted Americans, ultimately transferring the funds to a cryptocurrency scam center in Cambodia.
According to a statement from the U.S. Attorney's Office for the Central District of California on Monday, these cryptocurrency scammers used shell companies and U.S. bank accounts to collect stolen funds, which were then converted into Tether (USDT) and sent to a cryptocurrency wallet controlled by Cambodia.
These guilty pleas reflect the U.S. government's crackdown on cryptocurrency scams and money laundering operations in Asia, particularly those linked to the North Korean state-sponsored Lazarus Group.
Defendants Joseph Wong, Yicheng Zhang, Jose Somarriba, Shengsheng He, and Jingliang Su directly contacted victims through social media, instant messaging platforms, and dating apps, engaging in lengthy text exchanges and even phone conversations to gain the victims' trust and persuade them to invest in their cryptocurrency investment schemes.
The U.S. Department of Justice (DOJ) stated, "The scammers would tell victims that their investments were appreciating, while in reality, the funds were stolen and not invested at all."
The five guilty men are located in the U.S., Spain, China, and Turkey.
Somarriba and He established the shell company "Axis Digital" and opened a Deltec bank account in the Bahamas to receive victims' funds.
Su served as a director, assisting in converting victims' funds into USDT, while Wong operated a money laundering network that wired victims' funds to international bank accounts.
Zhang also managed two U.S. bank accounts used to handle illegal funds.
The U.S. Attorney's Office stated that the stolen funds were ultimately sent to the leaders of the Cambodian scam center.
Zhang and Wong, who have been detained since May 2024, face up to 20 years in prison after pleading guilty to conspiracy to commit money laundering.
The other three, who pleaded guilty to conspiracy to operate an unlicensed money service business, could also face up to five years in prison, according to the U.S. Attorney's Office.
Su has been detained since November 2024, with his sentencing hearing scheduled for November 17.
So far, eight individuals have admitted to crimes related to this cryptocurrency scam operation, including Daren Li and Lu Zhang, who pleaded guilty to money laundering last year.
Meanwhile, the U.S. Treasury is seeking to block Cambodia's Huione Group from entering the U.S. banking system, accusing the company of helping the North Korean state-sponsored Lazarus Group launder cryptocurrency.
The Treasury's Financial Crimes Enforcement Network (FinCEN) proposed on May 1 to prohibit financial institutions from accessing agency accounts or pass-through accounts related to Huione Group.
U.S. Treasury Secretary Scott Bessent stated at the time that Huione Group had become the "preferred market" for malicious cyber actors like the Lazarus Group, which "has stolen billions from ordinary Americans."
On May 13, a subsidiary of Huione Group, Haowang Guarantee, reportedly shut down its communication channels on Telegram, which were a key tool for coordinating money laundering activities.
However, cryptocurrency analytics firm TRM Labs indicated that they discovered transactional and behavioral links between Huione Guarantee and another Telegram-based guarantee service, Xinbi, suggesting that it may have found ways to circumvent the ban.
Related: U.S. Department of Justice claims cryptocurrency executives operate "dirty money secret pipelines"
Original text: “Cryptocurrency Scammers Admit to $37 Million Scam Scheme Targeting U.S. Victims”
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