Court Hands 4-Year Sentence to Mastermind Behind $37M Crypto Money Laundering Scheme

Justice finally catches up with crypto's dark side—and sends a clear message to would-be financial outlaws.

The $37M Wash Cycle

Four years in federal prison now awaits the architect of a sophisticated cryptocurrency money laundering operation that moved $37 million through digital channels. The scheme exploited crypto's pseudo-anonymous nature to obscure illicit fund flows—until blockchain analytics and determined investigators followed the money.

A Warning Shot Across the Bow

This sentencing isn't just about punishment—it's precedent. Regulatory bodies and law enforcement are increasingly adept at tracing transactions once thought untraceable. The 'crypto wild west' narrative keeps getting rewritten by subpoenas, seizures, and now prison terms.

Compliance Isn't Optional

Legitimate projects should see this as validation. Bad actors getting weeded out strengthens the ecosystem for builders and investors who play by the rules. The message? Innovate, but don't circumvent—unless you fancy orange jumpsuits over Lamborghinis.

Because nothing says 'financial revolution' like watching another crypto bro learn that federal prisons don't accept Bitcoin—or excuses.

DOJ finds He guilty for crypto money scam business

According to a statement from the US DOJ, He was among the masterminds in a network that targeted US investors through fraudulent digital asset investments.

“The defendant was part of a group of co-conspirators that preyed on American investors by promising them high returns on supposed digital asset investments when, in fact, they stole nearly $37 million from US victims using Cambodian scam centers,” Acting Assistant Attorney General Matthew R. Galeotti of the DOJ’s Criminal Division told reporters.

Galeotti also mentioned that scam centers operating overseas, especially those presenting themselves as investment opportunities, have grown significantly in recent years. 

“The Criminal Division is committed to bringing to justice those that steal from American investors, wherever the fraudsters may be located,” he remarked.

Per the court documents shared to the media on Monday, the conspiracy involved several co-conspirators based in the US and abroad, using centers in Cambodia. The group contacted American victims through social media messages, phone calls, text messages, and even online dating services. 

The scammers first gained the crypto holders’ trust, then persuaded them to invest in “profitable crypto ventures.” Victims were told their investments were growing in value, but the funds had already been siphoned away. 

More than $36.9 million was funneled from US bank accounts into a single account at Deltec Bank in the Bahamas, registered under Axis Digital Limited. He co-founded Axis Digital with another defendant, Jose Somarriba, while Chinese national Jingliang Su later joined as a director. 

Victims’ funds were deposited in Daltec, then converted into the Tether stablecoin (USDT). Prosecutors claimed He and others had instructed the bank to transfer the digital assets to wallets controlled by accomplices in Cambodia. From there, scam center operators in cities like Sihanoukville received the crypto, which was then passed along to “executives” of the scheme.

According to the DOJ statement, eight co-conspirators named in the case had already admitted guilt in connection with the operation. The money launderers’ list included Daren Li, a citizen of China and St. Kitts and Nevis, who has been in US custody since April 2024, and Lu Zhang, another illegal US immigrant, who told prosecutors he managed domestic money launderers. 

US Attorney: Beware of public of online scams

Acting US Attorney Bill Essayli of the Central District of California said He’s sentencing is a warning to the demographic trying to use digital assets to launder stolen money.

“This defendant will spend years in federal prison for participating in a conspiracy in which victims lost tens of millions of dollars, starting with the simple step of responding to unsolicited messages on their phones,” Essayli said.

He told Americans to counter-check strangers promoting investment opportunities online. “Your retirement fund or children’s college money may depend on it,” he added.

Assistant US Attorneys Maxwell Coll and Alexander Gorin of the Terrorism and Export Crimes Section, Nisha Chandran of the Major Frauds Section, and Trial Attorney Stefanie Schwartz of the DOJ’s Computer Crime and Intellectual Property Section (CCIPS) led the prosecution, alongside Tamara Livshiz of the Criminal Division’s Fraud Section.

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