Zheng Zhao, a 44-year-old Chinese national, appeared in a California court on October 23 after being extradited from the Netherlands. The U.S. Department of Justice (DOJ) accused Zhao of orchestrating a cryptocurrency scam that defrauded 174 victims out of more than $36.9 million. The scheme allegedly operated from Cambodian scam centers, with participants targeting victims through social media, phone calls, and online dating platforms.
Zhao faces a money laundering conspiracy charge, which carries a maximum sentence of 20 years in prison. The DOJ’s Office of International Affairs collaborated with Dutch authorities to secure his arrest and extradition. Assistant Attorney General A. Tysen Duva emphasized the case as a warning to those exploiting Americans from overseas.
Eight co-conspirators, including ShengSheng He and Jingliang Su, have already pleaded guilty. He and Su admitted to running an unlicensed money transmitting business and received prison sentences of 51 months and 46 months, respectively. The case is part of the DOJ’s Cyber-Enabled Scam Initiative.
Prosecutors allege that the scammers diverted victim funds through a complex financial network involving U.S. shell companies, international bank accounts, and digital asset wallets. Over $36.9 million was transferred to an account at Deltec Bank in the Bahamas, where it was converted into the stablecoin tether ($USDT) and sent to a digital asset wallet in Cambodia. The FBI noted that tracing cryptocurrency transfers can be challenging, especially when funds move into jurisdictions with weak anti-money laundering rules.