SoCal Man Helped Steal $40M With Phone, Internet Scam: Authorities

A Los Angeles County man was sentenced Monday to 51 months in federal prison and ordered to pay $26.87 million in restitution for his role in laundering over $36.9 million from victims in an international investment scam, authorities said.

Shengsheng He, 39, of La Puente, a former co-owner of the Bahamas-based Axis Digital Ltd., pleaded guilty in April in the Central District of California to conspiracy to operate an unlicensed money transmitting business, according to the U.S. Department of Justice.

“This defendant will spend years in federal prison for participating in a conspiracy in which victims lost tens of millions of dollars, starting with the simple step of responding to unsolicited messages on their phones,” Acting U.S. Attorney Bill Essayli of the Central District of California said in a department news release.

“The public should always remember to be vigilant and wary of strangers marketing promising investment opportunities. Your retirement fund or children’s college money may depend on it.”

He was part of an international criminal network that convinced U.S. victims to transfer funds to accounts controlled by co-conspirators who then laundered the money through U.S. shell companies, international bank accounts and digital asset wallets, according to the department.

Co-conspirators overseas would contact U.S. victims through unsolicited social media interactions, telephone calls, text messages and online dating services to gain their trust, authorities said. The co-conspirators promoted fraudulent digital asset investments and told the victims their investments were appreciating in value when the funds had actually been stolen, according to the department.

More than $36.9 million in victim funds were transferred from U.S. bank accounts controlled by the co-conspirators to a single account at Deltec Bank in the Bahamas, opened in the name of Axis Digital Ltd., authorities said. He and other co-conspirators directed Deltec Bank to convert victim funds to the stablecoin Tether and transfer the converted funds to a digital asset wallet controlled by people in Cambodia, according to the department.

Eight co-conspirators had pleaded guilty as of Monday, according to the department.

If you or someone you know is a victim of a digital asset investment fraud, report it to IC3.gov.