International Cryptocurrency Fraud Syndicate Targeted in $36.9 Million Enforcement Action by the U.S. Department of Justice
Plundering Digital Dreams: Five Crooks Admit to Swindling Over $36.9 Million in a International Crypto Investment Scam
Five unscrupulous fellows have confessed to their crimes in a slick, cross-border crypto investment scam that swindled millions from unsuspecting U.S. investors.
The loot was pilfered from these defrauded investors through a convoluted web of shell companies, offshore accounts, and digital wallets.
Behind the Scenes of the Deception
The U.S Department of Justice (DOJ) snagged guilty pleas from California residents Joseph Wong, 33, Jose Somarriba, 55, and 39-year-old Shengsheng He. Two Chinese citizens, Yicheng Zhang and Jingliang Su, also admitted to their wrongdoings.
On June 9, the DOJ announced in a press release that these individuals were part of a nefarious network that duped American victims into thinking they were investing in crypto.
This operation thrived by nurturing trust through unsolicited social media interactions, texts, phone calls, and online dating sites. Once the trap was set, co-conspirators based overseas manipulated the targeted individuals into transferring funds, under the assumption they were investing in booming digital assets.
However, their hard-earned cash was being diverted into accounts controlled by the scammers. An estimated $36.9 million moved from their U.S.-based holdings into an account at Deltec Bank in the Bahamas, registered under Axis Digital Limited.
Somarriba, He, and Su co-founded Axis Digital and opened the account at Deltec, with Su later joining them as a director. As a trio, they instructed the bank to transform the stolen money into USDT. The threesome then sent the converted funds to a wallet under the control of unnamed people in Cambodia, who subsequently transferred them to unidentified individuals operating "scam centers" in the region, including one in Sihanoukville.
While Somarriba and He focused on the Deltec account operations, Wong managed a Los Angeles-based network of money launderers who established shell companies, opened U.S. bank accounts, and wired funds abroad. Zhang also opened and managed two of those capital concealing accounts.
Waiting for their Day in Court
Both Wong and Zhang copped to money laundering conspiracy, facing a maximum of 20 years in prison. Meanwhile, Somarriba, He, and Su confessed to operating an unlicensed money services business, which carries a maximum sentence of 5 years.
These miscreants join seven other felons who have already copped to their crimes. Among them are Daren Li, who has been in U.S. custody since April 2024, and Lu Zhang, a Chinese national who oversaw a U.S.-based asset concealment network and pleaded guilty to money laundering conspiracy on May 13, 2024.
This revelation is on the heels of a report by the FBI's Internet Crime Complaint Center (IC3), showing that Americans over the age of 60 were the most vulnerable to crypto-related fraud. Last year, the IC3 documented more than 140,000 complaints related to digital assets, leading to over $9 billion in losses.
Binance: Feel the rush with a $600 welcome bonus by signing up through this link.Bybit: Jumpstart your crypto journey with a $500 free position on any coin here.Persisting Criminal ActivitiesDOJUnited StatesFollow DOJFacebookLinkedInTelegram
Enrichment Data:The scam involved five crooks, Joseph Wong, Yicheng Zhang, Jose Somarriba, Shengsheng He, and Jingliang Su, leading a complex web of deception to defraud American investors of over $36.9 million. The key players, their operations, the financial impact, and the legal proceedings are as follows:
Key Players and Operations:
- Perpetrators: The perpetrators were a group of five individuals: Joseph Wong, Yicheng Zhang, Jose Somarriba, Shengsheng He, and Jingliang Su.
- Method of Operation: These individuals built trust through social media interactions, messages, phone calls, and dating apps to convince victims to invest in bogus crypto projects, ultimately funneling the money through shell companies, offshore accounts, and digital wallets.
Financial Impact:
- Total Loss: Victims lost an estimated $36.9 million due to the scam.
- Money Laundering: The laundered funds were channeled through the U.S.-based shell companies, international bank accounts, and crypto wallets into a single account at Deltec Bank in the Bahamas under the name "Axis Digital Limited," then converted into USDT and further transferred to wallets controlled by people in Cambodia.
Legal Proceedings:
- Guilty Pleas: In addition to the five perpetrators, eight other co-conspirators have also pleaded guilty.
- U.S. Department of Justice Involvement: The U.S. Department of Justice (DOJ) is actively involved in dismantling this international criminal network, demonstrating its commitment to combating cryptocurrency-related fraud schemes.
- The Guilty Pleas revealed that Joseph Wong, Yicheng Zhang, Jose Somarriba, Shengsheng He, Jingliang Su, and eight other co-conspirators were part of a digital crypto investment scam that manipulated unsuspecting victims into transferring over $36.9 million through shell companies, offshore accounts, and digital wallets.
- The miscreants behind the scam included Joseph Wong, who managed a Los Angeles-based network of money launderers, and Yicheng Zhang, who opened and managed two capital concealing accounts. The trio of Somarriba, He, and Su co-founded Axis Digital and opened an account at Deltec Bank to launder the stolen money and convert it into USDT.
- The intricate web of deception used by the scammers highlights the need for increased vigilance within the crypto finance technology and general-news sectors to prevent further instances of crypto-related crime and injustice. With growing instances of fraud documented by the FBI's Internet Crime Complaint Center, it is crucial to ensure the security and transparency of digital assets and thwart the criminal activities prevalent within the crypto ecosystem.
