US says $36.9m in scam crypto was laundered through a Bahamas bank into USDT
A single account at a Bahamas bank became the funnel for $36.9 million stolen from 174 Americans, according to US prosecutors, who allege the money was converted there into Tether's USDT and sent on to Cambodia. Zheng Zhao, a 44-year-old Chinese national, appeared in a Los Angeles federal court on 23 October after being extradited from the Netherlands, where he had been detained over his alleged role in an international fraud network run from scam centres in Cambodia.
The US Department of Justice said a judge ordered Zhao detained pending further proceedings. He was charged in August 2025 with conspiracy to commit money laundering and faces up to 20 years in federal prison if convicted. Prosecutors allege he helped the network move the proceeds through US shell companies, international bank accounts and cryptocurrency wallets.
According to the department, the scheme began with fraudsters approaching victims through social media, dating platforms, phone calls and text messages. They promoted fake crypto investments on websites built to resemble legitimate trading platforms, showing fabricated gains to coax further deposits. Investigators traced more than $36.9 million from US bank accounts controlled by the conspirators to the Deltec Bank account, where Zhao and others allegedly arranged for the funds to be turned into USDT and transferred to a wallet controlled by people in Cambodia. The assets were then distributed to leaders of scam centres across the region, giving the network a route out of the conventional banking system. Prosecutors have not accused Tether or Deltec Bank of knowingly taking part in the fraud.
Zhao's extradition advances a case that has already produced eight guilty pleas. In a June 2025 announcement, the department named Axis Digital Limited as the company behind the Deltec account. Prosecutors said Jose Somarriba and ShengSheng He set up Axis Digital and opened the account, while Jingliang Su joined as a director and took part in converting victim funds into crypto. The investigation also uncovered a US network that received and moved the proceeds: Joseph Wong managed money launderers in Los Angeles who set up shell companies and bank accounts, while Yicheng Zhang ran two accounts used in the scheme.
Zhang was sentenced to 51 months and Su to 46 months after pleading guilty to conspiracy to operate an unlicensed money-transmitting business. In January a federal court ordered Su to pay about $26.9 million in restitution to victims, though authorities have not disclosed how much has been recovered or paid out. The Justice Department has widened its pursuit through its Cyber-Enabled Scam Initiative, which coordinates investigations into international fraud, digital asset laundering and the financial plumbing behind overseas scam centres. Zhao is due to be arraigned in Los Angeles on 30 November; he is presumed innocent and prosecutors have not yet established his individual responsibility for transactions attributed to the wider network.
