Chinese National Extradited to US Over Alleged $36.9 Million Crypto Scam Targeting Americans

A Chinese national has been extradited from the Netherlands to the U.S. over his alleged role in a multimillion-dollar cryptocurrency investment scam targeting 174 U.S. citizens, with more than $36.9 million in victim funds allegedly routed through a Bahamas bank before being converted into Tether (USDT) and transferred to a digital asset wallet in Cambodia.

Zheng Zhao, 44, made his initial court appearance and was ordered detained, with his arraignment scheduled for Nov. 30 in U.S. District Court in downtown Los Angeles.

“As crime has globalized, so has law enforcement’s ability to locate and catch criminals,” said First Assistant U.S. Attorney Bill Essayli, and added: “When innocent Americans are harmed by cybercriminals and their enablers, we and our partners around the globe will relentlessly ensure they face justice in a U.S. courtroom.”

$36.9 Million Allegedly Moved Through Bahamas Bank

According to court documents, Zhao was allegedly part of an international criminal network operating from scam centers in Cambodia. The network allegedly persuaded U.S. victims to transfer money to accounts controlled by co-conspirators, who then laundered the funds through U.S. shell companies, international bank accounts and digital asset wallets.

The alleged scheme began through unsolicited social media interactions, phone calls, text messages and online dating services.

The co-conspirators allegedly built trust with victims before promoting fraudulent digital asset investments through fake websites designed to resemble legitimate cryptocurrency trading platforms.

Victims were allegedly told their investments were increasing in value even though, prosecutors say, the money had already been stolen.

More than $36.9 million allegedly moved from U.S. bank accounts controlled by co-conspirators to a single account at Deltec Bank in the Bahamas.

Zhao and other alleged co-conspirators then arranged for the funds to be converted into Tether (USDT) and transferred to a digital asset wallet controlled in Cambodia.

Crypto Converted, Routed To Cambodia Scam Centers

From the Cambodian wallet, co-conspirators allegedly transferred the USDT to leaders of scam centers across the region, creating a cross-border chain that moved victim funds from U.S. bank accounts into cryptocurrency and ultimately toward operators of overseas scam operations.

“This extradition should be a lesson to all those who seek to exploit vulnerable Americans from overseas,” said Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division.

We will pursue charged defendants anywhere in the world, especially those who are alleged to have stolen money, converted it to cryptocurrency, and used foreign financial institutions in the process to try to hide and obfuscate their crimes. Wherever you are, we have the reach to find you.

The U.S. Secret Service said the case demonstrates its commitment to pursuing transnational criminal networks.

“This case should serve as a warning to scammers in every corner of the world: there is nowhere to hide,” said Special Agent in Charge Todd Bratz of the USSS Criminal Investigative Division.

Eight Co-Conspirators Have Already Pleaded Guilty

Zhao is the latest alleged participant to face U.S. proceedings. Eight co-conspirators have pleaded guilty, including ShengSheng He and Jingliang Su, who pleaded guilty to conspiracy to operate an unlicensed money transmitting business and were sentenced to 51 months and 46 months in federal prison, respectively.

If convicted, Zhao faces a statutory maximum sentence of 20 years in federal prison.

The case was investigated by the U.S. Secret Service’s Global Investigative Operations Center, with assistance from Homeland Security Investigations, Customs and Border Protection, the State Department’s Diplomatic Security Service and the U.S. Marshals Service. Dutch authorities assisted with Zhao’s arrest and extradition.

The Justice Department said the case is part of its Cyber-Enabled Scam Initiative, which focuses on identifying scammers targeting Americans, disrupting their networks and pursuing those responsible.

A criminal complaint is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.