How $37 million stolen from Americans moved through a Bahamas bank into Tether’s USDT
Chinese national Zheng Zhao has been extradited to the US for allegedly laundering $36.9 million stolen from 174 Americans through a Bahamas bank into Tether's USDT.
Zheng Zhao, 44, appeared in a Los Angeles federal court on October 23 after being extradited from the Netherlands. He faces charges of conspiracy to commit money laundering in connection with a sophisticated fraud network that operated scam centers in Cambodia.
Prosecutors allege Zhao helped move more than $36.9 million stolen from American victims through shell companies, international bank accounts, and cryptocurrency wallets. The funds were initially transferred to a single account at Deltec Bank in the Bahamas.
The criminal network initially targeted victims through social media, dating platforms, telephone calls, and text messages, promoting fraudulent crypto investments on fake trading platforms that showed fabricated investment gains.
Crypto Laundering Operation
Investigators traced the stolen funds from US bank accounts to the Bahamas bank, where Zhao and others allegedly arranged for the conversion into Tether's USDT stablecoin before transferring the crypto to wallets controlled by individuals in Cambodia.
The digital assets were then distributed to leaders of scam centers across the region, allowing the network to move proceeds outside the conventional banking system. Prosecutors have not accused Tether or Deltec Bank of knowingly participating in the fraud.
The alleged transactions illustrate how the operators combined access to traditional financial institutions with cryptocurrency transfers to move money across borders.
Wider Network Exposed
Zhao's extradition advances a prosecution that has already secured guilty pleas from eight other participants. Axis Digital Limited, the company behind the Deltec Bank account, was identified by the DOJ in June 2025.
Somarriba and He established Axis Digital and opened the account, while Su joined as a director and participated in converting victim funds into crypto. Wong managed money launderers in Los Angeles who established shell companies and bank accounts.
He was sentenced to 51 months, and Su received 46 months after pleading guilty to conspiracy to operate an unlicensed money-transmitting business. In January, a federal court ordered Su to pay approximately $26.9 million in restitution to victims, though authorities haven't disclosed how much has been recovered.
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