US Justice Department Cracks Down on $36.9M International Crypto Fraud Ring

Five men have pleaded guilty to their roles in laundering more than $36.9 million from victims of an international crypto investment scam conspiracy.

The money was stolen from defrauded investors in the U.S. through a web of shell companies, offshore accounts, and digital asset wallets.

Details of The Scheme

The U.S Department of Justice (DOJ) secured guilty pleas from California residents Joseph Wong, 33; Jose Somarriba, 55; and 39-year-old Shengsheng He. Two Chinese citizens, Yicheng Zhang and Jingliang Su, also confessed to wrongdoing.

In a press release published on June 9, the DOJ indicated that these individuals were part of a criminal network that received funds from U.S. victims under the pretense of investing in crypto.

Their scheme operated by building trust through unsolicited social media interactions, text messages, phone calls, and online dating sites. Once contact was established, co-conspirators based overseas persuaded the targeted individuals to transfer money under the false belief they were investing in appreciating digital assets.

However, the funds were being transferred to accounts controlled by the perpetrators. More than $36.9 million was moved from their U.S.-based holdings into a separate one at Deltec Bank in the Bahamas, registered under Axis Digital Limited.

Somarriba and He co-founded Axis Digital and opened the Deltec account, with Su later joining them as a director. Together, they instructed the bank to convert the stolen money into USDT. The trio then sent the converted funds to a wallet controlled by unnamed people in Cambodia who ultimately forwarded them to unnamed people running “scam centers” in the region, including one in Sihanoukville.

Meanwhile, Wong was managing a Los Angeles-based network of money launderers who created shell companies, opened U.S. bank accounts, and wired funds abroad. Zhang also opened and managed two of those capital obfuscation accounts.

Suspects Await Sentencing

Wong and Zhang each owned up to money laundering conspiracy and face a maximum of 20 years in prison. On their part, Somarriba, He, and Su admitted to conspiracy to operate an unlicensed money services business, which carries a maximum penalty of 5 years.

They join three others who previously copped up to their crimes, including Daren Li, a former resident of Cambodia and the United Arab Emirates (UAE), who has been in U.S. custody since April 2024. Another associate, Lu Zhang, a Chinese national who managed a U.S.-based asset concealment network, pleaded guilty to money laundering conspiracy on May 13, 2024.

This development follows a report by the FBI’s Internet Crime Complaint Center (IC3), which revealed that Americans over the age of 60 were the most affected by crypto-related fraud. According to the law enforcement agency, more than 140,000 complaints linked to digital assets were recorded last year, leading to over $9 billion in losses.