California Man Sentenced for Role in Global Digital Asset Investment Scam Conspiracy Resulting in Theft of More than $36.9M from Victims

A California man was sentenced today to 51 months in federal prison for his role in laundering more than $36.9 million from victims in an international digital asset investment scam conspiracy that was carried out from scam centers in Cambodia. The court also ordered him to pay $26,867,242.44 in restitution to victims.

“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 U.S. victims using Cambodian scam centers,” said Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division. “Foreign scam centers, purporting to offer investments in digital assets have, unfortunately, proliferated.  The Criminal Division is committed to bringing to justice those that steal from American investors, wherever the fraudsters may be located.”

“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,” said Acting U.S. Attorney Bill Essayli for the Central District of California. “The public should always remember to be vigilant and wary of strangers marketing promising investment opportunities. Your retirement fund or children’s college money may depend on it.”

Shengsheng He, 39, of La Puente, California, a former co-owner of the Bahamas-based Axis Digital Limited, pleaded guilty in the Central District of California to conspiracy to operate an unlicensed money transmitting business on April 10. 

According to court documents, He was part of an international criminal network that induced U.S. victims to transfer funds to accounts controlled by co-conspirators who then laundered victim money through U.S. shell companies, international bank accounts, and digital asset wallets.

As part of the conspiracy, co-conspirators residing overseas would contact U.S. victims directly through unsolicited social media interactions, telephone calls, text messages, and online dating services to gain the victims’ trust. The co-conspirators then promoted fraudulent digital asset investments to the victims. 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. More than $36.9 million in victim funds were transferred from U.S. bank accounts controlled by the co-conspirators to a single account at Deltec Bank in the Bahamas, opened in the name of Axis Digital Limited. He and other co-conspirators directed Deltec Bank to convert victim funds to the stablecoin Tether (USDT) and to transfer the converted funds to a digital asset wallet controlled by individuals in Cambodia. From there, co-conspirators in Cambodia transferred the USDT to the leaders of scam centers throughout the region including in Sihanoukville, Cambodia.

Eight co-conspirators have pleaded guilty so far, including Daren Li, a national of China and St. Kitts and Nevis who has been in U.S. custody since April 2024, and Lu Zhang, a Chinese national illegally in the United States who managed a network of U.S.-based money launderers. Li and Zhang each pleaded guilty to conspiracy to commit money laundering on Nov.12, 2024, and May 13, 2024, respectively.

He co-founded Axis Digital with defendant Jose Somarriba. Chinese national Jingliang Su joined Axis Digital as a director and participated in the digital asset conversions and transfers of victim funds. Somarriba and Su each pleaded guilty to conspiracy to operate an unlicensed money transmitting business on April 14, and June 9, respectively.

USSS’s Global Investigative Operations Center is investigating the case. The Homeland Security Investigations’ El Camino Real Financial Crimes Task Force, Customs and Border Protection’s National Targeting Center, U.S. Department of State’s Diplomatic Security Service, Dominican National Police, and U.S. Marshals Service provided valuable assistance.

Assistant U.S. 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 Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Tamara Livshiz of the Criminal Division’s Fraud Section prosecuted this case.

CCIPS investigates and prosecutes cybercrime in coordination with domestic and international law enforcement agencies, often with assistance from the private sector. Since 2020, CCIPS has secured the conviction of over 180 cybercriminals, and court orders for the return of over $350 million in victim funds.

If you or someone you know is a victim of a digital asset investment fraud, report it to IC3.gov.