Five men have pleaded guilty to their roles in a $36.9 million international crypto scam scheme that targeted Americans, with funds ultimately being sent to a crypto scam center in Cambodia.
The crypto scammers used shell companies and US bank accounts to rake in the stolen funds before converting them into Tether (USDT) and sending it to a crypto wallet controlled in Cambodia, the US Attorney’s Office for the Central District of California said on Monday.
The guilty pleas reflect the US government’s crackdown on crypto scams and money laundering rings operating out of Asia, especially those linked to the North Korean state-backed Lazarus Group.
The defendants, Joseph Wong, Yicheng Zhang, Jose Somarriba, Shengsheng He and Jingliang Su, contacted victims directly through social media, messaging platforms and dating apps, engaging in lengthy text and even calling the victims in order to win their trust and convince them to invest in their crypto investment scheme.
“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 said.
The five men who pleaded guilty were scattered throughout the US, Spain, China and Turkey.
How the crypto laundering ring operated
Somarriba and He founded the shell company “Axis Digital” and opened a Deltec Bank account in the Bahamas, which was used to receive the victims’ funds.
Su worked as a director and helped convert victim funds to USDT, while Wong ran a money laundering network and wired victim funds to international bank accounts.
Zhang also managed two US bank accounts used to process the illicit funds.
The stolen funds were ultimately sent to the leaders of the scam centers in Cambodia, the US Attorney’s Office said.
Crypto scammers face years in prison
Zhang, who has been in custody since May 2024, and Wong face 20-year prison sentences for the money laundering conspiracy charges that they pleaded guilty to.
The other three men could also receive up to five years in prison for pleading guilty to conspiracy to operate an unlicensed money services business, the US Attorney’s Office said.
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Su has been in custody since November 2024 and has a sentencing hearing scheduled for Nov. 17.
Eight people have now pleaded guilty to crimes tied to the crypto scam operation, including Daren Li and Lu Zhang, who both pleaded guilty to money laundering charges last year.
US Treasury wants to cut off Huione over ties to crypto crime
It comes as the US Treasury Department is seeking to block Cambodia-based Huione Group from accessing the American banking system, accusing the firm of helping North Korea’s state-sponsored Lazarus Group launder cryptocurrency.
The Treasury’s Financial Crimes Enforcement Network proposed to prohibit financial institutions from accessing correspondent or payable-through accounts tied to the Huione Group on May 1.
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,” US Treasury Secretary Scott Bessent said at the time.
On May 13, an affiliate of Huione Group, Haowang Guarantee, supposedly had its communications shut down on Telegram — which it relied heavily on to coordinate its laundering activities.
However, crypto analytics firm TRM Labs said it found transactional and behavioral ties between Huione Guarantee and another Telegram-based guarantee service, Xinbi, suggesting that it has found a way to bypass the ban.
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