In a major move to combat the growing threat of cryptocurrency-related fraud, five men have pleaded guilty to their roles in an elaborate $36.9 million scam targeting American citizens, with the laundered funds funnelled through Cambodia. The case highlights not only the scale of modern crypto crime but also the international networks behind them.
The U.S. Attorney’s Office for the Central District of California announced Monday that the defendants used a web of shell companies, U.S. bank accounts, and cryptocurrency wallets to syphon money from unsuspecting victims and reroute it to a scam centre in Cambodia. The accused Joseph Wong, Yicheng Zhang, Jose Somarriba, Shengsheng He, and Jingliang Su, operated from various corners of the globe, including the U.S., Spain, China, and Turkey.
Elaborate Online Manipulation Tactics
Investigators say the scam hinged on emotional manipulation. Victims were contacted through social media, messaging platforms, and dating apps, where scammers engaged in prolonged communication, sometimes even phone calls, to earn trust. According to the Department of Justice, the fraudsters convinced their targets to invest in what appeared to be legitimate crypto ventures.
“Scammers would tell victims that their investments were appreciating in value when, in fact, those funds were stolen and not invested at all,” the DOJ explained in a statement.
This social engineering tactic, often referred to as “pig butchering,” is a hallmark of the type of investment fraud increasingly orchestrated through transnational cybercrime hubs, many of which have emerged in South-east Asia.
The Laundering Trail: From the U.S. to Cambodia via Crypto
The five men orchestrated a complex financial operation. Somarriba and he established a shell company named Axis Digital, which opened an account at Deltec Bank in the Bahamas to receive victim funds. Zhang controlled two U.S. bank accounts to further launder the stolen money. Su, who served as a director, played a key role in converting those funds into Tether (USDT), a dollar-pegged stablecoin, while Wong led a money laundering network that wired funds internationally.
Ultimately, the money made its way to scam centres in Cambodia, forming part of a broader pattern of crypto laundering operations believed to be tied to cybercriminal organisations based in the region.
Sentencing Looms for Guilty Parties
The legal consequences could be severe. Wong and Zhang, who pleaded guilty to conspiracy to commit money laundering, face up to 20 years in prison. Zhang has been in custody since May 2024. Su, who’s been detained since November 2024, is scheduled for sentencing on November 17. The other three men face up to five years for conspiracy to operate an unlicensed money services business.
Their guilty pleas bring the total number of convicted individuals in this case to eight. Last year, Daren Li and Lu Zhang also admitted to money laundering offences connected to the same criminal network.
U.S. Targets Cambodian Nexus of Crypto Crime
The timing of the case is notable. It follows a broader push by U.S. authorities to sever links between American financial institutions and known crypto laundering hubs, particularly in South-east Asia. On May 1, the U.S. Treasury’s Financial Crimes Enforcement Network proposed blocking the Cambodia-based Huione Group from the U.S. financial system. Huione is accused of helping the North Korean state-backed Lazarus Group launder cryptocurrency stolen in cyberattacks.
“Huione Group has established itself as the ‘marketplace of choice for malicious cyber actors’ like the Lazarus Group, who have ‘stolen billions of dollars from everyday Americans,’” said U.S. Treasury Secretary Scott Bessent.
An affiliated entity, Haowang Guarantee, allegedly had its operations disrupted on Telegram on May 13. However, blockchain intelligence firm TRM Labs found evidence suggesting Huione may have resumed operations through another service, Xinbi, signalling the ongoing game of cat-and-mouse between law enforcement and digital crime syndicates.
A Global Threat With American Victims
This case underscores the growing international scope of crypto fraud. While the criminals operated across multiple jurisdictions, the victims were largely based in the United States. The use of cryptocurrencies such as Tether, favoured for its dollar stability and speed of transfer, made it easier for scammers to obscure money trails and dodge traditional banking scrutiny.
As the crypto landscape matures, so too do the strategies of those exploiting its loopholes. This latest case is a clear signal that U.S. authorities are intensifying efforts to tackle financial crime in the digital age, with a focus on closing the cross-border channels that enable it.
