US Extradites Chinese National in $36.9M Crypto Scam

US Extradites Key Suspect in $36.9M Crypto Fraud

Federal authorities have extradited 44-year-old Chinese national Zheng Zhao from the Netherlands to face criminal money laundering charges in California. Zhao appeared in a Central District of California court on Oct. 23, 2026, following a multi-agency international law enforcement operation.

Prosecutors allege that Zhao played a central role in a massive cryptocurrency investment scam operated from illegal call centers in Cambodia. The fraudulent scheme allegedly stole more than $36.9 million from at least 174 victims across the United States.

How the Cambodian Scam Network Operated

The scam relied on building trust through everyday online channels. Fraudsters contacted unsuspecting victims through unsolicited text messages, phone calls, social media platforms, and online dating apps.

Once they gained a victim's trust, the scammers directed them toward fake cryptocurrency trading platforms. These malicious websites were carefully designed to look just like legitimate, licensed exchanges.

To encourage victims to keep depositing money, the fake platforms displayed phony account balances showing steady investment growth. However, when victims tried to withdraw their funds, they discovered the money was completely gone.

Tracing the Financial Path Across Borders

Behind the scenes, the perpetrators moved funds through a complex web of shell companies, international bank accounts, and digital asset wallets designed to mask the money trail.

Investigators discovered that more than $36.9 million in victim deposits was funneled into a single account at Deltec Bank in the Bahamas. That account was controlled by Zhao's alleged co-conspirators.

According to court filings, Zhao and his associates arranged for Deltec Bank to convert the US dollars into the stablecoin TetherUSDT+0.06%. The tokens were then transferred to a digital asset wallet in Cambodia and distributed to regional scam center leaders.

Federal Bureau of Investigation (FBI) officials note that while public blockchain ledgers make tracking crypto transactions possible, moving funds into foreign jurisdictions with weak anti-money laundering rules heavily complicates recovery efforts.

Guilty Pleas and Potential Sentences

Zhao was formally charged in August 2025 with conspiracy to commit money laundering. If convicted, he faces up to 20 years in federal prison. The Justice Department's Office of International Affairs worked directly with Dutch authorities to secure his arrest and extradition.

Eight other individuals involved in the investment fraud conspiracy have already entered guilty pleas. Among them are Sheng Sheng He and Jingliang Su, who admitted to conspiring to operate an unlicensed money transmitting business.

• Sheng Sheng He received a prison sentence of 51 months.
• Jingliang Su received a prison sentence of 46 months.

This extradition should be a lesson to all those who seek to exploit vulnerable Americans from overseas.

Broader Crackdown on Global Scam Hubs

Zhao's case is part of the DOJ Criminal Division's Cyber-Enabled Scam Initiative, which targets international criminal syndicates operating scam compounds across Southeast Asia.

Global authorities have recently stepped up coordinated enforcement actions against these networks through several related cases:

• Prince Group Extradition: Cambodian authorities extradited Chen Zhi, head of the Cambodia-based conglomerate Prince Group, to China in January over cryptocurrency fraud and forced labor allegations.
• Osaka Arrest: Japanese authorities in Osaka arrested alleged Prince Group associate Hu Shi in June on suspicion of falsifying public records linked to foreign fraud networks.
• Xinbi Guarantee Action: In September, the DOJ's Scam Center Strike Force and US Treasury targeted Xinbi Guarantee, an online marketplace connecting scam bosses with fake website vendors and money launderers. Authorities froze approximately $52 million in crypto in a single day.
• Capstone Seizure: Federal authorities separately seized $84 million from Tether-linked payment processor Capstone as part of ongoing illicit finance enforcement.

To date, the DOJ's Scam Center Strike Force has restrained approximately $938 million in total funds, reflecting a major international push to dismantle illicit financial infrastructure in the digital asset space.