U.S. prosecutors have extradited 44‑year‑old Chinese national Zheng Zhao to face charges of conspiracy to commit money laundering. Zhao was detained in the Netherlands before being transferred to Los Angeles, where he appeared in federal court on Oct. 23.
Alleged laundering operation
According to the Department of Justice, the scheme involved fraudsters targeting victims via social media, dating platforms, phone calls and text messages, promoting fake cryptocurrency investments. Victims were persuaded to deposit funds that were later moved through U.S. shell companies, international bank accounts and cryptocurrency wallets.
Investigators traced more than $36.9 million from U.S. bank accounts to a single account at Deltec Bank in the Bahamas. Prosecutors allege Zhao and co‑conspirators arranged for the bank to convert the funds into Tether’s USDT stablecoin, which was then transferred to a wallet controlled by individuals in Cambodia. The digital assets were subsequently distributed to leaders of regional scam centers.
Related convictions and restitution
The case follows guilty pleas from eight other participants. In June 2025, the DOJ identified Axis Digital Limited as the entity that opened the Deltec Bank account used in the scheme. Several defendants have received prison sentences, including 51 months for one participant and 46 months for another who also was ordered to pay roughly $26.9 million in restitution.
The Justice Department’s Cyber‑Enabled Scam Initiative continues to investigate the network’s financial infrastructure, but it has not disclosed how much of the stolen money has been recovered.
Next steps
Zhao’s next court appearance is scheduled for Nov. 30, when he will be arraigned in Los Angeles. He remains presumed innocent, and prosecutors have not yet detailed his specific role in the transactions.
