The victims sent dollars.
The money arrived in Cambodia as USDT.
A 44-year-old Chinese national, Zheng Zhao, appeared in federal court in Los Angeles on Friday after being extradited from the Netherlands, accused of helping launder more than $36.9 million taken from American victims by scam centres in Cambodia, the US Department of Justice said on 23 October.
He is charged with conspiracy to commit money laundering.
He has not been convicted, and he is presumed innocent.
Investigators say they have identified 174 victims in the United States.
How does a dating-app message end up in a Cambodian wallet?
The route, as prosecutors tell it
According to court documents cited by the department, the scheme followed a familiar pattern, widely known as “pig butchering”.
Strangers reached out through social media, text messages, phone calls and dating services.
They built trust over time, then pitched crypto investments.
The victims were steered to fake websites dressed up as real trading platforms, where their balances appeared to grow.
The balances were fiction. The money was already gone, prosecutors say.
From there, the department describes a laundering chain in four steps:
- Victims paid into US bank accounts held by co-conspirators, including shell companies.
- More than $36.9 million moved from those accounts into one account at Deltec Bank in the Bahamas.
- The funds were converted into Tether’s USDT, a dollar-pegged stablecoin, and sent to a crypto wallet controlled in Cambodia.
- Co-conspirators in Cambodia passed the USDT on to the leaders of scam centres across the region.
Prosecutors say Zhao and his co-conspirators had the bank carry out those conversions and transfers. Deltec Bank has not been charged.
So who else has already answered for it?
Eight guilty pleas, one extradition
Zhao is not the first defendant in this case.
Eight others in the case have pleaded guilty, the department says.
Two of them, Shengsheng He and Jingliang Su, pleaded guilty to conspiring to run an unlicensed money transmitting business. They received prison terms of 51 and 46 months.
In a September 2025 release, the department said the Bahamas account was opened in the name of Axis Digital Limited, a company He co-owned, and that He was ordered to pay about $26.9 million in restitution.
The timeline, from the public record:
- August 2025: Zhao is charged with money-laundering conspiracy.
- 8 September 2025: He is sentenced to 51 months.
- 23 October 2026: Zhao appears in court in Los Angeles after extradition and is ordered detained, the US Attorney’s Office said.
- 30 November 2026: his arraignment is scheduled in downtown Los Angeles.
If convicted, he faces up to 20 years in prison.
The US Secret Service is leading the investigation, with Dutch authorities securing the arrest and handover.
How much of the $36.9 million will victims ever see again?
Protect yourself
- Treat any investment tip from someone you met online, especially on a dating app, as a red flag, however long you have been talking.
- Check a trading platform’s web address and registration yourself. A balance that only ever goes up is not proof the money exists.
- If you are asked to pay a “tax” or “fee” before you can withdraw, stop. That is a classic second-stage scam.
- Report fraud to the FBI at IC3.gov, and treat anyone who offers to “recover” your money for a fee as a scammer too.
Law enforcement is pressing on these networks elsewhere too, from Interpol’s Serengeti III sweep across Africa to New York’s $1.37 billion NovaTech case. USDT can be frozen by its issuer, as when Tether froze four TRON addresses and then reversed it. For the basics of wallet security, see what a private key is.
The money crossed three jurisdictions in a few transfers.
How many banks along the way asked where it came from?
Corrections and new evidence: [email protected]
This article is for information only and is not investment advice.