TLDR
- Shengsheng He laundered $36.9M through a crypto scam targeting U.S. investors.
- The scam was linked to Cambodia-based “pig butchering” fraud centers.
- He used Axis Digital to move funds through U.S. banks to offshore crypto wallets.
- Eight co-conspirators, including two Chinese nationals, have pleaded guilty.
A California resident has been sentenced to more than four years in federal prison for laundering nearly $37 million stolen from U.S. investors. The scheme was tied to a large-scale international crypto scam operated out of Cambodia, involving digital wallets, shell companies, and a network of global accomplices, according to federal prosecutors.
Crypto Investment Scam Linked to Cambodia
Shengsheng He, 39, from La Puente, California, was sentenced to 51 months in prison and ordered to pay $26.8 million in restitution. The U.S. Department of Justice said the funds were stolen through a fraudulent crypto investment scheme that targeted American victims.
According to court documents, scammers based in Cambodia contacted victims through social media, online dating apps, phone calls, and unsolicited text messages. Victims were promised high returns on crypto investments, but their funds were instead moved through fake companies and crypto wallets controlled by the scam operation.
He was identified as a co-owner of Axis Digital Limited, a company based in the Bahamas that played a key role in moving the stolen funds. Authorities said Axis Digital received nearly $37 million in victim money into an account at Deltec Bank in the Bahamas. The funds were then converted into USDT and sent to wallets controlled by individuals in Cambodia.
DOJ Connects Laundering Operation to “Pig Butchering” Centers
Prosecutors said the scam was part of a wider network of fraud centers in Cambodia, often referred to as “pig butchering” centers. These centers rely on social engineering tactics to manipulate victims into sending money over time.
Acting Assistant Attorney General Matthew R. Galeotti said in a statement, “Foreign scam centers, purporting to offer investments in digital assets have, unfortunately, proliferated.” He added that the DOJ remains committed to pursuing those who target U.S. investors through cross-border scams.
Authorities noted that the scam used a network of U.S.-based shell companies and crypto wallets to hide the money trail. Funds were laundered across several jurisdictions, eventually reaching leaders of scam operations in Sihanoukville, Cambodia. Prosecutors also said the stolen money passed through more than a dozen U.S. bank accounts before being moved offshore.
Eight other individuals have pleaded guilty in connection with the case, including Lu Zhang and Daren Li. Both were involved in managing the U.S. end of the money laundering network. Other co-conspirators included Jose Somarriba and Jingliang Su, a Chinese national who helped move the stolen money into crypto.
Broader DOJ Crackdown on Crypto-Related Fraud
The sentencing comes as part of a wider effort by the DOJ to combat international crypto-related fraud and illegal money transmitting operations. In recent months, the department has returned millions to fraud victims and targeted offshore exchanges tied to illicit activity.
In March, the DOJ seized $201,000 in digital currency linked to Hamas. In July, officials began returning over $7 million to victims of an oil and gas scam worth $97 million. Authorities have also taken down websites linked to Russian-run exchanges accused of moving over $800 million in illegal funds.
Shengsheng He pleaded guilty in April to conspiracy to operate an unlicensed money transmitting business. His sentencing follows increasing concern over how scammers exploit crypto to hide funds and avoid detection.
