Zheng Zhao, a 44-year-old Chinese national, faces a U.S. money laundering conspiracy charge after his extradition from the Netherlands. U.S. authorities allege Zhao orchestrated a cryptocurrency scam that defrauded 174 American victims of more than $36.9 million.
Zhao was arraigned Oct. 23 in the Central District of California. The money laundering conspiracy charge, stemming from August 2025, carries a maximum prison sentence of 20 years.
Investigators identified victims who were targeted through unsolicited social media interactions, phone calls, text messages and online dating services. Participants built trust before promoting fraudulent digital asset investments via fake cryptocurrency trading platforms designed to mimic legitimate exchanges.
Once victims invested, participants allegedly diverted funds through a complex cross-border financial network involving U.S. shell companies, international bank accounts and digital asset wallets. More than $36.9 million from co-conspirator-controlled accounts was routed to a single account at Deltec Bank in the Bahamas.
Zhao and other participants allegedly arranged for Deltec Bank to convert these funds into the stablecoin tether (USDT). The USDT was transferred to a digital asset wallet located in Cambodia, from which co-conspirators distributed the stablecoins to leaders of regional scam centers, according to the Department of Justice.
Publicly recorded blockchain transactions allowed investigators to trace cryptocurrency transfers, though movements into foreign jurisdictions with weak anti-money laundering regulations complicated the tracing efforts.
Eight co-conspirators have already pleaded guilty in connection with the scheme. ShengSheng He received a prison sentence of 51 months, while Jingliang Su was sentenced to 46 months. Both admitted to conspiring to operate an unlicensed money transmitting business.
