Five individuals have pleaded guilty in a sweeping $36.9 million crypto fraud scheme that targeted American victims and laundered funds through Cambodia, marking a significant development in the U.S. government’s widening crackdown on transnational cybercrime and crypto-based fraud.
According to the U.S. Attorney’s Office for the Central District of California, the defendants used U.S.-based shell companies and bank accounts to collect stolen funds before converting the proceeds into Tether (USDT) and transferring them to wallets controlled by a scam ring in Cambodia. Authorities say this operation mirrors broader patterns of crypto laundering networks tied to Southeast Asia, and potentially to state-linked actors like North Korea’s Lazarus Group.
The five defendants — Joseph Wong, Yicheng Zhang, Jose Somarriba, Shengsheng He, and Jingliang Su operated globally, with locations traced to the U.S., Spain, China, and Turkey. According to Prosecutors the men contacted victims directly via dating apps, social media, and messaging platforms.
In many cases, they built weeks- or months-long relationships with victims through texts and calls to persuade them to invest in fake crypto platforms. Scammers would tell victims that their investments were appreciating in value when, in fact, those funds were stolen and not invested at all,” the Department of Justice noted in its Monday announcement.
Inside the crypto laundering operation
Prosecutors outlined a coordinated scheme: Jose Somarriba founded a shell entity named Axis Digital and opened an account with Deltec Bank in the Bahamas to accept victim funds. Wong allegedly ran an international money laundering network that wired proceeds to offshore accounts, while Su worked as a director facilitating the conversion of illicit assets into USDT. Zhang, meanwhile, oversaw two U.S. bank accounts used to launder incoming funds.
Once converted to stablecoins, the crypto assets were sent to scam centers operating in Cambodia. Authorities believe these hubs are part of a growing illicit crypto ecosystem, which has previously been linked to North Korean financial operations and Asian cybercrime syndicates.
The U.S. government has already secured eight guilty pleas in connection with the operation, including prior convictions of Daren Li and Lu Zhang, both of whom also pleaded guilty to laundering charges last year.
Zhang and Wong face up to 20 years in prison on money laundering conspiracy charges, while the remaining three could receive sentences of up to five years for operating an unlicensed money services business. Su, who has been in custody since November 2024, is scheduled for sentencing on November 17.
Treasury targets Huione Group amid broader crackdown
This case unfolds as the U.S. Treasury intensifies efforts to severe financial pipelines linked to crypto crime in Southeast Asia. On May 1, the Treasury’s Financial Crimes Enforcement Network (FinCEN) proposed blocking Cambodia-based conglomerate Huione Group from the U.S. financial system, citing its ties to the North Korean Lazarus Group and its role in laundering crypto proceeds.
U.S. Treasury Secretary Scott Bessent called Huione the “marketplace of choice for malicious cyber actors” who have “stolen billions of dollars from everyday Americans.”
A major affiliate of Huione, Haowang Guarantee, reportedly had its communications shut down by May 13. However, crypto forensics firm TRM Labs has since found behavioral and transactional overlap with another Telegram-based entity, Xinbi, suggesting the laundering network may have adapted and continued operating under a different name.
As authorities piece together the broader architecture of crypto-related fraud and laundering, officials emphasize the importance of cutting off access points between offshore scam networks and U.S. financial infrastructure.
The latest guilty pleas underscore a coordinated law enforcement response, one aimed not only at prosecuting individual actors, but also dismantling the transnational structures that facilitate the movement of illicit digital assets.
