A California man has received a sentence of 51 months in prison for laundering nearly $37 million linked to a crypto investment scam originating from centers in Cambodia, as announced by the Justice Department. This case highlights the ongoing issue of fraudulent schemes that exploit American investors, promising lucrative returns on cryptocurrency investments.
Matthew G. Galeotti, the acting assistant attorney general, emphasized the predatory nature of the group involved in the scheme, which targeted unsuspecting individuals seeking high returns from their investments in cryptocurrencies. The intricate operations of the scam reveal the lengths to which perpetrators will go to facilitate illegal activities.
According to insights from blockchain security firm Elliptic, some of the funds stolen from victims were laundered through Huione International Payments, an entity that operated in conjunction with Huione Guarantee. The platform, primarily accessed via Telegram, was notably shut down in May following intelligence reports from Elliptic, which estimated that it had been instrumental in handling up to $98 billion in illicit cryptocurrency transactions since its inception in 2014.
The convicted individual was identified as the former co-owner of Axis Digital, a Bahamas-based company implicated in transferring the proceeds of the scam to a single account at Deltec Bank in the Bahamas. Subsequently, the funds were converted to Tether (USDT) before being funneled back to Cambodia, illustrating an elaborate network designed to obscure the origin of illicit funds.
In addition to the convicted California resident, eight co-conspirators have pleaded guilty in connection with this case. One notable figure among them is Daren Li, a citizen of both China and St. Kitts and Nevis, who has been in U.S. custody since April 2024 on separate money laundering charges. This development underscores the multifaceted nature of the operation and the collaborative efforts of law enforcement to dismantle such networks.
