Zheng Zhao appears in California court after Netherlands extradition

Zheng Zhao, a 44-year-old Chinese national, appeared in federal court in California on Oct. 23, 2026, after extradition from the Netherlands. The hearing is a new development in the U.S. prosecution of an alleged Cambodian investment scam that involved cryptocurrency. Dutch authorities and the Justice Department’s Office of International Affairs worked together to arrest and extradite him. Zhao was ordered detained, and a future court date was set for November 30.

Prosecutors filed the money laundering conspiracy charge against Zhao in August 2025. He faces a maximum prison sentence of 20 years if convicted on the charge, which involves concealing the origins of illegally obtained money. Court filings state Zhao is presumed innocent until proven guilty and that criminal charges do not imply guilt. The case is part of the Justice Department’s Criminal Division Cyber-Enabled Scam Initiative.

Prosecutors allege Zhao ran a cryptocurrency investment scheme from scam centers in Cambodia that defrauded at least 174 U.S. residents of nearly $37 million. Investigators traced more than $36.9 million in victim funds through accounts linked to co-conspirators.

Victims were contacted through unsolicited social media messages, phone calls, text messages and online dating services before being pitched fraudulent digital-asset investments. Digital assets are financial instruments that exist only in electronic form, including cryptocurrencies. The scheme used fake websites resembling legitimate cryptocurrency trading platforms to induce investments.

A single Deltec Bank account in the Bahamas received more than $36.9 million from U.S. bank accounts. Court records show the Bahamas account was opened under the name Axis Digital Limited. Zhao and co-conspirators arranged for the funds to be converted into the stablecoin Tether (USDT), a digital token designed to hold a steady value, and transferred to a digital asset wallet controlled in Cambodia. Co-conspirators in Cambodia then sent the USDT to leaders of scam centers across the region.

Joseph Wong, a co-conspirator living in California, managed a Los Angeles network of money launderers. Money laundering is the process of disguising the origins of illegally obtained funds. That network registered shell companies, businesses that exist on paper without active operations, opened U.S. bank accounts and moved stolen victim funds to international bank accounts.

Eight co-conspirators have pleaded guilty in the conspiracy. Shengsheng He and Jingliang Su acknowledged planning to run an unlicensed money transmission operation and were sentenced to 51 months and 46 months in prison.

Assistant Attorney General A. Tysen Duva of the Justice Department said the extradition warns anyone trying to exploit vulnerable Americans from abroad. “This extradition should be a lesson to all those who seek to exploit vulnerable Americans from overseas,” Duva said. First Assistant U.S. Attorney Bill Essayli said globalization has not stopped law enforcement from finding and arresting criminals.

Todd Bratz, special agent in charge of the Criminal Investigation Division within the U.S. Secret Service, said scammers have nowhere to hide. He added that investigators remain committed to identifying scam center operators and disrupting their financial infrastructure.

According to the FBI’s 2025 Internet Crime Report, investment scammers stole over $8.6 billion based on 72,984 complaints last year. That figure was up from $6.5 billion in 2024. Authorities describe these fraud operations as pig butchering or romance baiting scams.

Pig butchering involves cultivating trust with victims before steering them into fraudulent investments, while romance baiting uses romantic or personal connections to gain credibility. Publicly recorded blockchain transactions, entries on a shared digital ledger, can assist investigators in following cryptocurrency, yet moving funds across borders complicates tracing, particularly in places with weak anti-money laundering rules.

In a separate investigation involving alleged cryptocurrency fraud and forced labor, Prince Group head Chen Zhi was extradited to China in January. Japanese authorities arrested alleged Prince Group associate Hu Shi in Osaka in June on suspicion of falsifying public records. Police linked him to a group U.S. authorities have targeted over fraud and money laundering allegations.

In September, authorities targeted Xinbi Guarantee, described as a Chinese-language online marketplace that allegedly connects operators with vendors selling fraudulent websites and money laundering services. Federal authorities restrained about 52 million in cryptocurrency in a single day. The Scam Center Strike Force’s cumulative restrained funds reached approximately $938 million.