Zheng Zhao, a 44-year-old Chinese national, appeared in federal court in Los Angeles on October 23 after being extradited from the Netherlands, the Justice Department said. Prosecutors say he helped launder more than $36.9 million that 174 identified Americans sent to fake crypto trading sites run from scam centers in Cambodia. He is charged with conspiracy to commit money laundering and has not been convicted.

Key facts

  • Who: Zheng Zhao, 44, a Chinese national, extradited from the Netherlands
  • What: Charged in August 2025 with conspiracy to commit money laundering; maximum 20 years in prison if convicted
  • When: In court in the Central District of California on October 23, 2026
  • How much: More than $36.9 million from 174 identified US victims, per the Justice Department
  • Source: US Justice Department press release

The victims never met the people who took their money. Prosecutors say the first contact came out of nowhere: a social media message, a phone call, a text, or a match on a dating app. The new friend talked about crypto, then pointed them to a trading website that looked like a real platform. Their balance climbed on the screen. The money was already gone.

How prosecutors say the money moved

The Justice Department's account follows the dollars step by step:

  • Victims sent money to US bank accounts that belonged to shell companies run by the group.
  • More than $36.9 million went from those accounts to a single account at Deltec Bank in the Bahamas.
  • Zhao and others allegedly arranged for the bank to turn it into Tether (USDT), a dollar stablecoin, and send it to a wallet controlled in Cambodia.
  • From there it went to the bosses of scam centers across the region.

Eight people have pleaded guilty in the case so far. Two of them, ShengSheng He and Jingliang Su, admitted running an unlicensed money transmitting business and were sentenced to 51 and 46 months in prison. Zhao was charged in August 2025 and faces up to 20 years if convicted. These are allegations, and he is presumed innocent.

"Wherever you are, we have the reach to find you," said Assistant Attorney General A. Tysen Duva of the Criminal Division. The Secret Service led the investigation, and Dutch authorities arrested Zhao.

What the case shows about the scam

This is the pattern often called a USDT investment scam or pig butchering: a patient stranger, a fake platform, and a balance that only exists on their website. The numbers on the screen were never real, which is why the trouble starts when someone tries to withdraw and gets asked for a "tax" or "fee" first.

An arrest doesn't mean refunds. Money that was turned into USDT and sent overseas is hard to pull back, and seized funds go through the courts first, as we covered with the $938 million the US restrained this week. If you lost money to a site like this, report it at ic3.gov with every wallet address and bank transfer you have, and ignore anyone who promises to recover it for a fee.

Spread across 174 identified victims, $36.9 million works out to roughly $212,000 each, though the government hasn't said how the losses were split.

Sources: US Department of Justice, Office of Public Affairs (October 23, 2026), US Attorney's Office, Central District of California, UPI.