Five individuals have pleaded guilty to orchestrating an elaborate cryptocurrency fraud scheme that defrauded U.S. citizens of nearly $37 million.
According to the U.S. Department of Justice, the defendants, Joseph Wong, Yicheng Zhang, Jose Somarriba, Shengsheng He, and Jingliang Su, operated an international scam.
They relied on online platforms such as social media, messaging apps, and dating websites to lure victims.
The fraud ring manipulated targets by forging false personal relationships and convincing them to invest in fraudulent crypto projects.
These projects were entirely fictitious, and the funds were secretly transferred into foreign-controlled wallets, primarily located in Cambodia.
How Victims Were Lured Using Personalized Scams
The scammers employed social engineering techniques to gain victims’ trust before initiating the fraudulent investment schemes.
By maintaining ongoing communication through texts and phone calls, they created an illusion of legitimacy.
Once a relationship was established, victims were persuaded to invest in supposed cryptocurrency opportunities, which were in fact nonexistent.
The fraudsters provided fake updates to show fabricated profits, encouraging further investments.
DOJ officials revealed that these tactics were intentionally designed to sustain the illusion of success and extract as much money as possible from victims.
In reality, none of the funds were used for any real investment and were instead funneled directly into scam networks abroad.
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Shell Companies and Crypto Laundering Infrastructure Uncovered
The operation involved a multi-layered money laundering system built to obscure the origin of the stolen funds.
Jose Somarriba and Shengsheng He created a front company called Axis Digital, which used an account at Deltec Bank in the Bahamas to handle victim deposits.
Jingliang Su served as a director for the group, overseeing the conversion of these funds into Tether (USDT), a widely used stablecoin in the crypto market.
Meanwhile, Joseph Wong ran a money laundering network that routed funds to offshore accounts, and Yicheng Zhang operated two U.S.-based bank accounts to manage and transfer the illicit proceeds.
These efforts allowed the group to launder millions while maintaining a façade of legitimacy, ultimately sending the funds to scam leaders based in Cambodia.
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DOJ Pursues Sentencing as More Guilty Pleas Emerge
The legal outcomes for the guilty parties reflect the severity of their roles in the scheme.
Joseph Wong and Yicheng Zhang, who played central roles in laundering operations, face potential prison sentences of up to 20 years.
Zhang has been held in custody since May 2024, while Su has been detained since November 2024, with sentencing scheduled for November 17.
Somarriba, He, and Su face lesser charges of conspiring to operate an unlicensed money transmission business, carrying maximum sentences of five years.
These convictions are part of a wider federal crackdown on crypto fraud, with eight individuals now having pleaded guilty in connection to this network.
Authorities continue to investigate and dismantle related international fraud rings, reinforcing the need for global cooperation to address the expanding threat of cryptocurrency-based financial crimes.
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