US Justice Department Targets Global $36.9M Crypto Fraud Operation Involving Shell Companies and Offshore Accounts
The US Justice Department has successfully targeted and dismantled a global $36.9 million crypto fraud operation, securing guilty pleas from five individuals involved in laundering funds stolen from American victims.
Multi-National Crypto Scam Busted
According to a DOJ press release dated June 9, the complex international fraud scheme deceived U.S. investors with false promises of high returns from cryptocurrency investments. The scam was facilitated through social media messages, phone calls, online dating platforms, and other forms of unsolicited communication.
Once trust was established, victims were tricked into transferring money to what they believed were legitimate crypto investment platforms. In reality, the funds were funneled into a network of shell companies, offshore bank accounts, and crypto wallets controlled by fraudsters.
Who’s Involved?
The five men who recently pleaded guilty include:
- Joseph Wong, 33, of California
- Jose Somarriba, 55, of California
- Shengsheng He, 39, of California
- Yicheng Zhang and Jingliang Su, both Chinese nationals
The defendants admitted their roles in laundering funds and operating an unlicensed money services business.
Wong allegedly ran a money laundering network out of Los Angeles, creating shell companies and U.S. bank accounts to move illicit funds overseas. Zhang managed two such accounts used to obscure the origins of the stolen money.
Meanwhile, Somarriba, He, and Su co-founded Axis Digital Limited, which held a bank account at Deltec Bank in the Bahamas. There, they converted the stolen money into USDT (a stablecoin) before sending it to crypto wallets in Cambodia. These wallets were reportedly tied to “scam centers” in the region, including one in Sihanoukville.
Broader Criminal Network
The DOJ confirmed that these five join others previously charged in connection to the same criminal ring. Among them is Daren Li, a former resident of Cambodia and the UAE, who was taken into U.S. custody in April 2024, and Lu Zhang, who managed a U.S.-based money concealment network and pleaded guilty in May 2024.
Senior Citizens Most Affected
This crackdown follows a report from the FBI’s Internet Crime Complaint Center (IC3), highlighting the rising threat of cryptocurrency fraud. In 2024, over 140,000 complaints related to digital asset scams were filed—totaling more than $9 billion in losses. Victims aged 60 and older were disproportionately affected.
What’s Next?
Wong and Zhang face up to 20 years in prison for conspiracy to commit money laundering. Somarriba, He, and Su face up to 5 years for conspiracy to operate an unlicensed money services business. Sentencing dates are pending.
The US Justice Department’s action against this global $36.9 million crypto fraud operation underscores its commitment to cracking down on international financial crimes and protecting vulnerable American investors.
