Simply put
- Shengsheng He received a 51-month prison sentence for his role in laundering nearly $37 million stolen in a cryptocurrency investment scheme.
- The money was funneled through a shell company located in the Bahamas, turned into cryptocurrency, and transferred to the wallets of fraudsters.
- This incident is part of a larger crackdown by the Department of Justice on global cryptocurrency fraud and online money laundering.
Shengsheng He, a resident of La Puente, California, was sentenced to 51 months in federal prison for assisting in the laundering of about $37 million stolen from a U.S. investor through an international cryptocurrency fraud. Additionally, he has been ordered to pay $26.9 million in restitution, according to federal prosecutors.
He pleaded guilty to conspiracy charges related to running a remittance business, which had received a license in April.
Co-owning Axis Digital Limited, a Bahamas-based enterprise, he was implicated in receiving and transferring the defrauded funds, as stated by the Department of Justice.
The scheme involved unsolicited messages, telephone calls, and interactions on dating apps to gain victims’ trust.
“The conspirators then motivated victims to invest in fake digital assets,” the DOJ reported. “The scammers misled the victims into believing their investments were thriving because the money sent to the criminals had been stolen.”
As victims sent their funds, the money was initially deposited into an account under Axis Digital at Deltec Bank in the Bahamas, where it was transformed into tethered (USDT) cryptocurrencies and subsequently redirected to wallets controlled by the scammers.
Authorities noted that to obscure the source of the funds, money was routed through various shell companies and international accounts.
Prosecutors pointed out that the fraudulent activities were orchestrated from what’s referred to as Cambodia’s “pig slaughter” center.
This type of fraud typically involves large-scale digital scams, which, according to Chainalysis, generated around $9 billion in 2024. Victims believed they were making legitimate investments in digital assets, but their money was laundered across a web of accounts spanning multiple countries.
The Department of Justice emphasized the necessity of combating these schemes.
His case represents a broader initiative against cryptocurrency-related fraud. Recently, the DOJ has confiscated digital assets related to terror financing, returned millions to fraud victims, and pursued offshore platforms used to launder illegal funds.
In a notable enforcement action, prosecutors seized $201,000 tied to Hamas in March and began returning $7.1 million to victims of a $97 million oil and gas fraud scheme in July.
Additionally, authorities dismantled websites associated with Russian-operated exchanges reportedly involved in unlawful transactions exceeding $800 million.
Eight co-conspirators, including two business partners, Jose Somarriba and Jingliang Su, have pleaded guilty in relation to the Axis Digital case. Su, a Chinese national, played a role in converting and transferring the stolen money.
