Following his extradition from the Netherlands, a Chinese national appeared in a California courtroom to face charges related to a large-scale cryptocurrency investment fraud operation. The scheme, which targeted 174 victims across the United States, resulted in losses exceeding $36.9 million.
The fraud operation employed tactics commonly referred to as pig butchering or romance baiting scams. Perpetrators initiated contact with potential victims through social media platforms, dating applications, and messaging services. After establishing trust, they directed victims toward fraudulent investment opportunities, ultimately stealing their money rather than investing it as promised.
According to prosecutors, 44-year-old Zhen Zhao worked alongside accomplices based in the United States and Cambodia to execute the scheme. The criminal network contacted targets nationwide using unsolicited text messages, social media outreach, phone calls, and online dating services. They promoted bogus digital asset investments and falsely reported that victims' funds were generating returns.
The Department of Justice described the operational mechanics: "The co-conspirators created fake websites that resembled real cryptocurrency trading platforms and convinced victims to send funds through the fake websites for investments."
Once funds reached victim-controlled accounts, the network converted the money through Deltec Bank in the Bahamas. "Zhao and other co-conspirators arranged for Deltec Bank to convert victim funds to the stablecoin Tether (USDT) and to transfer the converted funds to a digital asset wallet controlled in Cambodia. From there, co-conspirators in Cambodia transferred the USDT to the leaders of scam centers throughout the region."
The victims' transfers totaling over $36.9 million were directed to a Deltec Bank account registered under the name Axis Digital Limited in the Bahamas.
Zhao was charged in August 2025 with conspiracy to commit money laundering. If convicted, he faces a maximum prison sentence of 20 years.
Eight additional members of the international criminal organization have already entered guilty pleas. Two of these co-conspirators have received sentences of 51 months and 46 months respectively.
The case reflects broader trends in investment fraud. According to the FBI's 2025 Internet Crime Report, investment scammers stole over $8.6 billion in the previous year based on 72,984 reported complaints, representing a significant increase from $6.5 billion in 2024.