DOJ Busts $36.9 Million Cryptocurrency Fraud Ring
The U.S. Department of Justice (DOJ) recently dismantled an international cryptocurrency fraud case involving $36.9 million, with five individuals pleading guilty. The ring meticulously designed scams through social media, text messages, phone calls, and online dating sites, luring American victims into investing in fake digital asset projects, while in fact diverting the funds into accounts controlled by the criminals and transferring them overseas through a complex money laundering network.
The core operation of the case involves several key players. Among them are California residents Joseph Wong (33 years old), Jose Somarriba (55 years old), and Shengsheng He (39 years old), along with two Chinese citizens Yicheng Zhang and Jingliang Su, all of whom admitted to participating in the criminal activities.
Jose Somarriba and Shengsheng He co-founded a shell company called Axis Digital Limited and opened an account at Deltec Bank in the Bahamas to receive victim funds. They then exchanged the funds for USDT (Tether) and transferred them to a digital wallet controlled by anonymous individuals in Cambodia, ultimately funnelling them into local scam operations.
Meanwhile, Wong managed a money laundering network in Los Angeles, assisting in the transfer of funds overseas by creating shell companies and U.S. bank accounts. Zhang was responsible for managing some obfuscating accounts to further conceal the flow of funds.
Currently, Wong and Zhang face up to 20 years in prison for conspiracy to commit money laundering, while Somarriba, He, and Su face up to 5 years for conspiracy to operate an unlicensed money service business. They, along with three other accomplices who previously pleaded guilty, collectively admitted to charges of money laundering.
Previously, the FBI’s Internet Crime Complaint Center (IC3) released a report stating that Americans aged 60 and over are the most affected by cryptocurrency-related fraud, having recorded losses exceeding $4.8 billion from over 140,000 complaints related to digital assets last year.
In summary, the DOJ's crackdown on cryptocurrency crimes serves as a reminder for the public to be vigilant about the risks of cryptocurrency investments and highlights the regulatory gaps in the market, particularly the inadequate protections for the elderly.
As an investor in cryptocurrency, what do you think should be done to protect investors, especially the elderly, from such scams?