Five Plead Guilty in $36.9 Million Cryptocurrency Scam Targeting Americans

Five individuals have admitted to their involvement in a $36.9 million international cryptocurrency scam that targeted Americans. The funds were ultimately transferred to a cryptocurrency scam center in Cambodia. The scammers utilized shell companies and US bank accounts to accumulate the stolen funds, which were then converted into Tether (USDT) and sent to a cryptocurrency wallet controlled in Cambodia, as stated by the US Attorney’s Office for the Central District of California.

The guilty pleas highlight the US government’s intensified efforts to combat cryptocurrency scams and money laundering operations, particularly those linked to Asia and the North Korean state-backed Lazarus Group. The defendants, Joseph Wong, Yicheng Zhang, Jose Somarriba, Shengsheng He, and Jingliang Su, directly contacted victims through social media, messaging platforms, and dating apps. They engaged in extensive communication to gain the victims' trust and persuade them to invest in their fraudulent cryptocurrency scheme. The scammers falsely informed victims that their investments were increasing in value, while in reality, the funds were stolen and not invested at all.

The five men who pleaded guilty were located in various regions, including the US, Spain, China, and Turkey. Somarriba and He established the shell company “Axis Digital” and opened a Deltec Bank account in the Bahamas to receive the victims’ funds. Su acted as a director and assisted in converting victim funds to USDT, while Wong managed a money laundering network and transferred victim funds to international bank accounts. Zhang oversaw 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.

Zhang, who has been in custody since May 2024, and Wong face 20-year prison sentences for the money laundering conspiracy charges they pleaded guilty to. The other three men could receive up to five years in prison for pleading guilty to conspiracy to operate an unlicensed money services business. Su has been in custody since November 2024 and has a sentencing hearing scheduled for November 17. Eight individuals have now pleaded guilty to crimes related to the cryptocurrency scam operation, including Daren Li and Lu Zhang, who both pleaded guilty to money laundering charges last year.

This development comes as the US Treasury Department seeks to block Cambodia-based Huione Group from accessing the American banking system. The Treasury Department accuses the firm of aiding North Korea’s state-sponsored Lazarus Group in laundering cryptocurrency. The Treasury’s Financial Crimes Enforcement Network proposed prohibiting financial institutions from accessing correspondent or payable-through accounts tied to the Huione Group on May 1. Huione Group has been identified as a “marketplace of choice for malicious cyber actors” like the Lazarus Group, who have allegedly stolen billions of dollars from everyday Americans. On May 13, an affiliate of Huione Group, Haowang Guarantee, reportedly had its communications shut down on Telegram, which it relied heavily on to coordinate its laundering activities. However, a crypto analytics firm found transactional and behavioral ties between Huione Guarantee and another Telegram-based guarantee service, suggesting that it has found a way to bypass the ban.