Netherlands extradites Zheng Zhao to US over alleged USDT laundering for scam center leaders

The Netherlands has extradited Chinese national Zheng Zhao, 44, to the United States to face a money laundering conspiracy charge, the Justice Department said on October 23, 2026. Prosecutors allege Zhao and others arranged for more than $36.9 million linked to a crypto investment scam that targeted 174 Americans to be converted into Tether’s USDT and sent to a wallet in Cambodia.

How the crypto investment scam allegedly targeted Americans

According to prosecutors, the alleged operation relied on a calculated approach to winning victims’ confidence before persuading them to transfer money into fraudulent investment opportunities.

Participants allegedly contacted Americans through unsolicited social media messages, text messages, telephone calls and online dating services. After establishing relationships, they introduced purported cryptocurrency investments and directed victims to websites designed to resemble legitimate digital asset trading platforms.

Those websites allegedly displayed fabricated profits, encouraging investors to believe their deposits were growing. In reality, prosecutors said, the money had been stolen rather than invested as promised.

This pattern is commonly associated with relationship-based investment fraud, sometimes called pig butchering, in which perpetrators cultivate trust before encouraging increasingly large financial commitments.

The alleged crypto investment scam involved more than misleading websites. Investigators said the network moved victims’ funds through US shell companies, overseas bank accounts and cryptocurrency wallets, making the financial trail international and complex.

The scale of the operation is reflected in the number of identified victims and the millions of dollars allegedly transferred beyond the initial accounts.

More than $36.9 million allegedly converted into USDT

The DOJ said more than $36.9 million originating from US bank accounts controlled by alleged participants passed through a single account at Deltec Bank in the Bahamas.

Prosecutors allege that Zhao and others arranged for the funds to be converted into Tether’s USDT stablecoin before being transferred to a digital asset wallet controlled in Cambodia. Participants in Cambodia allegedly distributed the cryptocurrency to leaders of scam centers operating across the region.

USDT is designed to maintain a value linked to the US dollar. Its use in this alleged laundering network illustrates how stablecoins can serve as a transfer mechanism in both legitimate financial activity and illicit transactions.

The DOJ’s account does not establish that USDT itself was responsible for the fraud. Rather, prosecutors allege that participants used the token to move funds obtained through the fraudulent investment operation.

An earlier DOJ announcement identified the Bahamas-based company Axis Digital Limited in connection with the account. In September 2025, ShengSheng He, a former co-owner of the company, received a 51-month prison sentence for his role in the wider conspiracy.

The court also ordered He to pay $26,867,242.44 in restitution, according to the DOJ.

Eight co-conspirators have pleaded guilty as investigations expand

Zhao’s extradition follows several guilty pleas and prison sentences involving other participants in the alleged network. The DOJ said eight co-conspirators had pleaded guilty by October 23.

Jingliang Su was sentenced to 46 months in federal prison on January 27, 2026, after pleading guilty to conspiracy to operate an illegal money-transmitting business. The court ordered him to pay $26,867,242.44 in restitution.

Another participant, Jose Somarriba, received a 36-month prison sentence, while He was sentenced to 51 months. These cases demonstrate that investigators have pursued the alleged financial infrastructure alongside individuals accused of helping operate it.

Assistant Attorney General A. Tysen Duva previously described the wider operation as one in which criminals exploited online communications and fraudulent websites before moving victims’ money through cryptocurrency and international transfers. His remarks appeared in a DOJ announcement concerning Su’s sentencing.

The latest crypto investment scam case is also unfolding amid separate US efforts to disrupt alleged fraud networks. On October 14, prosecutors in Brooklyn announced the shutdown of 241 websites and the seizure of 112 servers linked to an alleged operation targeting Russian-speaking Americans. Investigators reported seizing approximately $300,000 in suspected stolen funds.

Separately, Coinbase said its investigators participated in an October 6–9 operation in London involving the DOJ’s Scam Center Strike Force and the UK’s National Crime Agency. The effort focused on alleged West African scam networks and involved tracing suspicious financial activity, supporting asset freezes and sharing intelligence.

In Zhao’s case, the US Secret Service’s Global Investigative Operations Center is leading the investigation, with assistance from Homeland Security Investigations, Customs and Border Protection, the State Department’s Diplomatic Security Service and the US Marshals Service. The DOJ’s Office of International Affairs worked with Dutch authorities to secure the extradition.

As proceedings move forward, the allegations highlight the challenges of tracing funds across traditional banking systems and blockchain networks. Prosecutors must still establish Zhao’s alleged role in court, but the case adds to a growing international effort to pursue the people and financial channels suspected of enabling large-scale cryptocurrency investment fraud.