California Man Sentenced in $37M Crypto Scam
A resident of La Puente, California, Shengsheng He, has been sentenced to 51 months in federal prison and ordered to pay nearly $27 million in restitution to victims after participating in laundering funds from a crypto scam worth $37 million. According to the U.S. Department of Justice (DOJ), He admitted to charges related to conspiring to operate an unlicensed money transmitting business. Together with his accomplices, He co-owned Axis Digital Limited, a shell company based in the Bahamas created to receive and transfer victim funds.
Fraud Tactics Through Dating Apps And Messaging
Victims were approached through unsolicited messages, phone calls, and even dating apps. After building trust, the scammers convinced them to invest in fake crypto projects. Victims were told that their investments were increasing in value, but in reality, all the funds had been diverted to wallets controlled by the fraudsters. The money was pooled into an Axis Digital account at Deltec Bank in the Bahamas, then quickly converted into the stablecoin USDT to further obscure its trail.
Pig Butchering Operations From Southeast Asia
Prosecutors revealed that this scheme was linked to so-called “pig butchering centers” in Cambodia, where criminals use psychological manipulation and social engineering to defraud investors. This type of scam has become widespread across the region and in 2024 alone caused losses of up to $9 billion, according to Chainalysis.
DOJ Expands Global Crackdown
The case of Shengsheng He is only part of a broader effort to combat digital financial crime worldwide. Recently, the DOJ has seized digital assets tied to terrorist financing and returned millions of dollars to victims of fraudulent investment schemes. In addition, several underground Russian-run exchanges accused of processing hundreds of millions of dollars in illicit transactions have also been shut down. In the Axis Digital case, at least eight co-conspirators have pleaded guilty, including Jose Somarriba and Jingliang Su, who played key roles in converting and laundering stolen funds.
Conclusion
The case of Shengsheng He serves as a strong warning for investors participating in the crypto market. Investment invitations through text messages, dating apps, or unofficial channels carry significant risks. At the same time, the case highlights the determination of the DOJ to crack down on fraudulent activities, safeguard investors, and maintain transparency in the digital asset market.
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