Scammers used fake trading sites to target 174 U.S. victims
Prosecutors say more than $36.9 million in victim funds was transferred from U.S. bank accounts controlled by conspiracy members to an account at Deltec Bank in the Bahamas. Prosecutors said Zhao and his co-conspirators arranged for the money to be converted into Tether, a cryptocurrency tied to the value of the U.S. dollar, before transferring it to digital wallets controlled in Cambodia. The funds were then distributed to leaders of scam centers operating in the region.
Zheng Zhao, 44, a Chinese national, was extradited from the Netherlands and appeared Friday in the Central District of California, where he was arraigned on a charge of conspiracy to commit money laundering. He was accused of helping launder millions of dollars stolen from U.S. victims in a $36.9 million cryptocurrency investment scam.
The Department of Justice said Zhao allegedly participated in an international criminal network operating through scam centers in Cambodia that targeted victims with fraudulent cryptocurrency investments.
Federal investigators identified 174 U.S. victims connected to the scheme.
According to court documents, the scammers contacted the victims through social media, telephone calls, text messages and online dating services to gain their trust. They then directed the victims to fake cryptocurrency trading websites that appeared to offer legitimate investment opportunities.
The websites showed investments increasing in value, but prosecutors said the money had actually been stolen.
Zhao faces up to 20 years in prison if convicted. Eight other defendants have pleaded guilty in connection with the scheme.
“This extradition should be a lesson to all those who seek to exploit vulnerable Americans from overseas,” Assistant Attorney General A. Tysen Duva said in a statement.