Federal authorities have flown a Chinese citizen from the Netherlands to Los Angeles to face charges over a Cambodia-based cryptocurrency scam. The fraudulent scheme preyed on 174 targeted Americans and laundered over $36.9 million through a bank account in the Bahamas.
On Oct. 23, the U.S. Department of Justice confirmed that 44-year-old Zheng Zhao appeared in federal court following his extradition. According to the Los Angeles U.S. Attorney’s Office, a magistrate judge ordered his detention and set his formal arraignment for Nov. 30.
During its national announcement, officials revealed that grand jury indictments charged Zhao with conspiracy to commit money laundering in August 2025. Federal prosecutors noted that the charge carries a maximum penalty of 20 years behind bars upon conviction.
Zhao still retains the presumption of innocence. The charge focuses on his alleged role in funneling stolen victim funds across an international network, according to the department’s summary of court filings.
Dutch law enforcement collaborated closely with the Justice Department’s Office of International Affairs to execute his arrest and transfer, according to the official release. However, neither agency disclosed when officers apprehended him or detailed how investigators initially tracked his whereabouts.
Crypto Scam Funds Allegedly Moved Through Banks and USDT
Federal prosecutors outlined an intricate money-laundering network that routed funds from U.S. bank accounts and ultimately distributed digital tokens directly to Cambodia-based syndicate bosses.
In the department’s summary, foreign operatives targeted American citizens using unsolicited social media texts, cold calls, direct messages, and online dating platforms. Once scammers cultivated trust, they pitched fake digital currency investments and guided victims onto fraudulent websites designed to mirror genuine trading exchanges.
Federal prosecutors alleged that these counterfeit platforms showcased fabricated trading returns despite thieves taking the funds. The victims’ capital subsequently flowed through American shell entities, overseas financial accounts, and private crypto wallets.
According to the official announcement, syndicate members moved over $36.9 million from controlled U.S. accounts directly into a Deltec Bank account in the Bahamas. Federal prosecutors alleged that Zhao and his co-conspirators instructed the financial institution to exchange those funds into Tether’s USDT before transferring the digital assets into a Cambodian-managed wallet.
Department officials stated that operatives routed USDT from that central wallet directly to syndicate heads running fraudulent operations throughout the region.
An earlier Justice Department sentencing statement linked the Bahamian account directly to Axis Digital Limited. In that September 2025 announcement, federal prosecutors specified Sihanoukville, Cambodia, as one of the key hubs where scam leaders collected the laundered capital.
Earlier Defendants Face Prison Sentences and Restitution Payments
According to the latest announcement, eight co-conspirators, including ShengSheng He and Jingliang Su, have admitted guilt to federal charges.
Following his April guilty plea for conspiring to operate an unlicensed money transfer business, a judge handed him a 51-month prison sentence in September 2025. Federal officials identified him as a former co-owner of Axis Digital Limited, adding that the court required over $26.8 million in restitution payments.
A magistrate judge handed Su a 46-month prison sentence on Jan. 27, which highlighted during its prior reporting. In that January DOJ update, federal officials noted his June 2025 guilty plea regarding conspiracy to run an unlicensed money transfer operation.
U.S. District Judge R. Gary Klausner delivered Su’s prison sentence, while federal authorities ordered him to pay $26,867,242.44 in victim restitution, according to official statements. The Los Angeles U.S. Attorney’s Office confirmed that federal agents have held Su in custody since December 2024.
That same January release disclosed a 36-month prison sentence for Jose Somarriba, an additional co-conspirator who admitted guilt to charges of running an unlicensed money transfer operation.
Separate October Operations Targeted Major Scam Networks
Federal agents expanded recent U.S. investigations this month to target domain names, central servers, and financial platforms linked to alleged investment scams.
On Oct. 14, Brooklyn prosecutors announced that federal agents and cyber investigators dismantled 241 websites and confiscated 112 servers connected to an Eastern European ring targeting Russian-speaking Americans.
District attorney officials confirmed that cyber investigators recovered roughly $300,000 in misappropriated funds. Law enforcement made no arrests during the raid, according to news coverage citing the official announcement.
Prosecutorial authorities revealed that operators initially pitched fake investment opportunities before recontacting victims with deceptive offers to recover stolen funds. Cyber investigators deliberately targeted underlying server networks after discovering that fraudsters rapidly deployed replacement websites whenever authorities took individual domains offline.
A separate international operation united Coinbase, the Justice Department’s Scam Center Strike Force, and the UK’s National Crime Agency in a coordinated enforcement initiative.
Coinbase confirmed that its internal investigators participated in an Oct. 6–9 London workshop focused on dismantling West African fraud syndicates. In an Oct. 13 debrief, the crypto platform noted that specialized teams mapped illicit money flows, facilitated emergency asset freezes, and exchanged actionable intelligence directly with global law enforcement agencies.
The company detailed how investigators combined raw blockchain transaction records with corroborating evidence gathered from social messaging accounts, deceptive profiles, and malicious websites. Coinbase highlighted that the targeted networks specialized in fraudulent crypto schemes, law enforcement impersonation, and staged arrest threats conducted via live video calls.
According to Justice Department reports, the Secret Service’s Global Investigative Operations Center heads the probe into Zhao’s activities. Federal partners—including Homeland Security Investigations, Customs and Border Protection, the Diplomatic Security Service, and the U.S. Marshals Service—provided key support throughout the inquiry.
Federal officials named prosecutors Nisha Chandran and Alexander Gorin to lead the government’s legal team handling the case.
