Key Highlights:
- Federal authorities have targeted a major cyber-enabled investment scam network, securing guilty pleas and multi-year prison sentences for co-conspirators ShengSheng He and Jingliang Su.
- Court records reveal that over $36.9 million was funneled through shell companies and an account at Deltec Bank in the Bahamas before being converted to Tether ($USDT) and sent to Cambodian scam operations.
- International actions against related transnational fraud syndicates continue to expand, including arrests connected to Cambodia’s Prince Group and over $52 million in digital assets restrained in an operation against Xinbi Guarantee.
Federal law enforcement agencies continue to dismantle sprawling transnational fraud operations targeting U.S. citizens through deceptive digital asset schemes. Highlighting the extensive reach of international cooperation, officials issued a stern warning following a major foreign extradition: “This extradition should be a lesson to all those who seek to exploit vulnerable Americans from overseas.”
The prosecution against key figure Zhao forms a prominent component of the U.S. Department of Justice’s Cyber-Enabled Scam Initiative, which aims to neutralize organized crime syndicates running complex cyber-fraud operations abroad.
As part of the widening investigation, eight co-conspirators have already entered guilty pleas. Among them, ShengSheng He and Jingliang Su admitted to conspiring to operate an unlicensed money transmitting business. He and Su were sentenced to 51 months and 46 months in federal prison, respectively, for their roles in laundering proceeds stolen through deceptive investment operations.
How Scammers Converted Victim Millions into Tether ($USDT)
According to federal prosecutors, overseas operatives carried out elaborate confidence scams by targeting unsuspecting victims through unsolicited communications on social media platforms, text messages, phone calls, and online dating websites. After systematically building rapport and trust, the perpetrators convinced victims to invest in fraudulent digital currency platforms that convincingly mirrored legitimate trading exchanges.
Victims observed fictitious account dashboards indicating that their cryptocurrency balances were surging in value. In reality, the network diverted the deposited funds across a complex international financial apparatus. Prosecutors outlined a laundering pathway involving domestic shell corporations, offshore bank accounts, and digital currency wallets. More than $36.9 million was shifted from conspirator-controlled accounts directly into a single corporate account at Deltec Bank located in the Bahamas.
From there, Zhao and other co-conspirators arranged for Deltec Bank to convert the fiat funds into the dollar-pegged stablecoin Tether ($USDT). The resulting tokens were subsequently transferred to a digital asset wallet based in Cambodia, where local conspirators disbursed the funds directly to regional scam center bosses. While public blockchain ledgers allow the Federal Bureau of Investigation (FBI) to trace transaction histories, routing assets through foreign jurisdictions with lax anti-money laundering frameworks continues to pose major challenges to asset recovery.
Crackdowns on Southeast Asian Scam Compounds and Marketplaces
The enforcement effort against Zhao’s ring parallels significant international crackdowns aimed at broader Asian scam networks frequently linked to human trafficking and forced labor. In a separate proceeding in January, Cambodian authorities extradited Prince Group chairman Chen Zhi to China. The Cambodia-based conglomerate, which maintains operations across several industries, faced intense scrutiny after Chen was accused of managing cryptocurrency fraud syndicates powered by forced labor.
Related enforcement operations have rippled across Asia. In June, law enforcement in Osaka, Japan, arrested alleged Prince Group associate Hu Shi on suspicion of falsifying public records. Japanese police linked Hu directly to the wider syndicate, which has been subjected to scrutiny by U.S. authorities over transnational fraud and large-scale money laundering allegations.
Meanwhile, domestic enforcement under the DOJ’s Scam Center Strike Force, in collaboration with the U.S. Department of the Treasury, dealt a significant blow to cybercrime infrastructure in September. Authorities targeted Xinbi Guarantee, an illicit Chinese-language online platform designed to connect scam operators with money laundering networks and turnkey fraudulent websites. During that single operation, federal agents restrained roughly $52 million in cryptocurrency, elevating the Scam Center Strike Force’s total restrained assets to approximately $938 million.
Why This Matters
Transnational investment fraud—often referred to in financial sectors as “pig butchering”—has evolved into a multi-billion-dollar enterprise run by organized crime rings operating primarily out of Southeast Asia. By utilizing shell corporations, offshore banks, and stablecoins like Tether ($USDT), these syndicates quickly shift illicit proceeds out of traditional financial systems before victims realize their funds are gone. The ongoing actions by the Cyber-Enabled Scam Initiative and the Scam Center Strike Force reflect an increasingly aggressive cross-border approach, combining financial sanctions, international extraditions, and blockchain tracing to sever the financial lifelines of organized cyber-fraud networks.
Frequently Asked Questions
What role did Deltec Bank play in the scam?
According to prosecutors, more than $36.9 million of victim funds moved through conspirator-controlled accounts to an account at Deltec Bank in the Bahamas. Zhao and fellow participants then directed the bank to convert the fiat funds into the stablecoin Tether ($USDT) before routing the tokens to a digital wallet in Cambodia.
What were the sentences handed down to ShengSheng He and Jingliang Su?
Both ShengSheng He and Jingliang Su pleaded guilty to conspiring to operate an unlicensed money transmitting business. ShengSheng He received a prison sentence of 51 months, while Jingliang Su was sentenced to 46 months.
What is Xinbi Guarantee and why was it targeted?
Xinbi Guarantee was a Chinese-language online illicit marketplace that paired scam syndicate operators with vendors offering money laundering services and fake trading websites. The DOJ’s Scam Center Strike Force and the U.S. Treasury Department restrained approximately $52 million in cryptocurrency in a targeted action against the service.
