California resident sentenced to 4 years in prison for laundering $37 million through cryptocurrency

Key points:

• Shengsheng He laundered $36,9 million through Axis Digital and banks in the Bahamas.
• The scheme operated out of Cambodia and used a “pig butchering” method to defraud investors.
• The defendant will pay $26,8 million to the victims, and eight accomplices also pleaded guilty.

39-year-old Shengsheng He from La Puente, California, was sentenced to 51 months in prison and ordered to pay $26,8 million in compensation to victims. According to the US Department of Justice, he pleaded guilty to conspiracy to transfer money without a license.

According to the investigation, He was a co-owner of Axis Digital Limited, a company registered in the Bahamas, through which investors’ funds were transferred to Deltec Bank. There, the money was converted into Tether (USDT) stablecoins and sent to the crypto wallets of the scheme’s organizers in Cambodia.

The victims were found through social networks, messengers, and dating services. They were promised profitable investments in cryptocurrencies, but in reality, their funds were embezzled by scammers. This scheme is known as “pig butchering.”

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Network of accomplices and international investigation

Eight other participants also pleaded guilty. Among them are Daren Li, a citizen of China and Saint Kitts and Nevis, and Lu Zhang, who ran a money laundering network in the United States. Li and Zhang pleaded guilty back in 2024.

He co-founded Axis Digital with Jose Somarriba. Jingliang Su, the company’s director, who helped with translations and the conversion of digital assets, also participated in the operation. Somarriba and Su pleaded guilty in April and June 2024.

The investigation was conducted with the participation of the USSS, DHS, CBP, the US Department of State, the Marshals Service, and the Dominican National Police.

Acting Assistant Attorney General Matthew Galeotti noted:

“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.”

US sanctions against cyber fraud in the region

This story unfolds against the backdrop of new sanctions by the US Treasury Department against networks in Myanmar and Cambodia linked to cryptocurrency fraud. The restrictions target 19 organizations operating through camps and centers where victims were forced to participate in online scams.