 
 
A California man was sentenced to 51 months in federal prison for his role in laundering nearly $37 million from a crypto investment scam operated in Cambodia, according to the U.S. Department of Justice.
The DOJ’s acting assistant attorney general Matthew G. Galeotti said Shengsheng He of La Puente, California, was involved in a group that “preyed on American investors” by promising them lucrative returns on their crypto investments.
“Scammers would tell victims that their investments were appreciating in value when, in fact, the funds the victims sent to the scammers had been stolen,” the DOJ wrote.
He was a co-owner of Bahamas-based Axis Digital Limited, which the government said helped funnel the scam proceeds from U.S. victims into a single account at Deltec Bank in the Bahamas before the capital was converted to Tether’s USDT stablecoin and then distributed back to Cambodia to wallets controlled by the scammers.
Specifically, approximately $36.9 million in victim funds were sent from U.S. bank accounts to an account at Deltec under Axis’s name.
 
The defendant pleaded guilty in April to conspiracy to operate an unlicensed money transmitting business in the Central District of California. Prosecutors said that He and his co-conspirators relied on unsolicited text messages, social media, phone calls, and online dating apps to create trust with the unsuspecting victims.
Besides the prison sentence, He was also ordered to pay $26.8 million in restitution to victims.
Today’s case is part of a broader crackdown on crypto-related fraud. In recent months, the Justice Department has seized digital assets linked to terrorist financing, returned millions to victims of investment fraud, and targeted offshore exchanges used to launder illicit funds.
“Foreign scam centers, purporting to offer investments in digital assets have, unfortunately, proliferated,” posited DOJ’s Galeotti. “The Criminal Division is committed to bringing to justice those that steal from American investors, wherever the fraudsters may be located.”
Eight accomplices have also pleaded guilty in connection with the crypto scam, including Chinese citizen Daren Li and Lu Zhang, who oversaw a network of U.S.-based money launderers.
Source: https://zycrypto.com/california-man-sentenced-to-four-years-in-prison-for-laundering-37-million-in-crypto-scam/
