A 44-year-old Chinese national was extradited to the United States and arraigned in federal court for his alleged involvement in a sweeping investment scam network that tricked at least 174 U.S. residents out of nearly $37 million, the Justice Department said Friday.
Zheng Zhao was extradited from the Netherlands to the United States to face a conspiracy to commit money laundering charge that could keep him in prison for 20 years.
Prosecutors accuse Zhao and his co-conspirators of operating a global cryptocurrency investment scheme out of multiple countries, including scam centers in Cambodia.
The cybercrime ring allegedly reached out to U.S.-based victims proactively via social media, phone calls, text messages and online dating sites to establish a deceitful relationship and build trust. Eventually, Zhao and his co-conspirators promoted cryptocurrency investments to the victims and directed them to send funds through fake sites that resembled legitimate trading platforms.
Victims were told their investments were growing in value, yet they were already transferred from U.S. bank accounts controlled by the co-conspirators to an account at Deltec Bank in the Bahamas, officials said. The crew allegedly converted the victim funds to Tether before transferring the assets to a digital wallet controlled in Cambodia.
The stolen funds were ultimately distributed to leaders of scam networks throughout the region, officials said.
Eight of Zhao’s co-conspirators previously pleaded guilty participating in the investment scam conspiracy, including Shengsheng He and Jingliang Su, who were sentenced to 51 months and 46 months in prison, respectively.
Joseph Wong, a co-conspirator living in California, managed a network of money launderers in Los Angeles who registered shell companies, opened U.S. bank accounts and transferred stolen victim funds to international bank accounts.
“This case should serve as a warning to scammers in every corner of the world: there is nowhere to hide,” Todd Bratz, special agent in charge of the U.S. Secret Service Criminal Investigation Division, said in a statement. “Secret Service investigators and our law enforcement partners remain unwavering in their commitment to identify those who operate scam centers, disrupt their financial infrastructure and bring them to justice.”
