Five individuals pleaded guilty to a $37 million international crypto scam targeting U.S. victims.
The scam involved social engineering to lure victims into fake crypto investments.
Stolen funds were laundered through shell companies various bank accounts and converted to USDT before being sent to Cambodia.
The defendants are facing huge prison sentences, with some looking at up to 20 years for money laundering conspiracy.
Cambodia is quickly becoming a major hub for organized crypto fraud.
The US scored another major victory against crypto fraud this week, as five men have pleaded guilty to running an international scam.
This crypto scam stole nearly $37 million from American victims and involved a massive network of cross-border money laundering, as well as crypto-backed theft.
Most of the stolen funds eventually ended up in Cambodia, which shows the increasing threat of transnational cybercrime in the digital asset space.
Here are some of the details to note.
The operation basically operated around tricking unsuspecting individuals in the United States to invest in a fake crypto platform.
The five individuals in question, Joseph Wong, Yicheng Zhang, Jose Somarriba, Shengsheng He and Jingliang Su, used several social engineering tactics to gain the trust of victims.
Five men plead guilty
They posed as real investors and financial advisors on platforms like social media, messaging apps and dating sites before luring victims into transferring funds for “investments” that turned out to be fake.
According to the U.S. Attorney’s Office for the Central District of California, these scammers reassured victims that their investments were growing.
However, in reality, the money was being laundered and transferred overseas using a network of shell companies and crypto wallets.
The fraud ring took careful steps to cover their tracks, according to the DoJ filings.
Two of the masterminds, Somarriba and He set up a shell company named Axis Digital and opened an account with Deltec Bank in the Bahamas to collect the victims' funds.
Meanwhile, Su acted as a director and helped convert the stolen money into USDT.
Wong, on the other hand, was the mastermind behind the money laundering network and was responsible for transferring the funds from U.S. bank accounts to international destinations.
Zhang managed two of those U.S.-based accounts and helped move them through the banks before converting them into crypto.
Eventually, the laundered assets were transferred to wallets controlled by more scam operators based in Cambodia.
The legal fallout came fast and hard with Zhang and Wong (both facing money laundering conspiracy charges) looking at prison sentences of up to 20 years.
Su, who has been in custody since November 2024, is awaiting sentencing on 17 November and could also face years behind bars.
The remaining two defendants, Somarriba and He pleaded guilty to charges, which carry a maximum sentence of five years.
These five convictions bring the total number of guilty pleas related to this scam to eight.
Daren Li and Lu Zhang were previously charged and admitted to money laundering offenses tied to the same scam operation.
This case has shed some light on Cambodia’s troubling role in worldwide crypto fraud.
The country has more and more become a hotspot for scam centers, some of which have alleged ties to state-sponsored cybercrime groups.
Authorities believe that these Cambodian scam centers are not acting alone. Instead, they seem to be part of a more organized ring that includes logistics, money laundering and other operations.
The U.S. Treasury Department is also targeting another Cambidian crypto laundering ring called the Huione Group.
Major crackdown against Huoine Group
This crime organization is accused of helping North Korea’s Lazarus Group to launder stolen crypto funds.
So far, Treasury Secretary Scott Bessent has called Huione “the marketplace of choice for malicious cyber actors,” after allegedly helping to launder billions of dollars stolen from Americans.
So far, sentences haven’t yet been handed out. However, asides the wrench attacks and crypto kidnappings, these incidents show just how dangerous the crypto space has become over the years.
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