Jingliang Su, a Chinese national, faces almost four years in prison for his role in crypto fraud that relied on befriending Americans on social media, then winning their trust in order to fleece them. He laundered about $37 million from 174 U.S. victims via scam centers in Cambodia, according to a statement released by the Department of Justice on Tuesday. In June, Su pleaded guilty to conspiracy to operate an illegal money transmitting business.
The sentencing follows a year in which mostly Chinese scammers stole a record $17 billion from regular people. Scam centers have become notorious in Southeast Asian countries like Myanmar, and recent kidnappings in the region have been linked to these fraud hubs.
“This case is emblematic of a broader trend we’re observing: highly organized scam conglomerates in Southeast Asia weaponizing technology and cryptocurrencies to defraud victims at scale across borders,” said Jacqueline Burns Koven, the head of cyber threat intelligence at Chainalysis, in a note to Fortune.
Su and his criminal network used creative techniques, and crypto, to lure victims and launder money. The fraudsters would contact American victims through social media, texts, or online dating platforms to get people’s trust. They would then create fake websites that looked like real crypto exchanges, where they convinced victims to send their money.
These tactics, which are intended to exploit lonely or otherwise vulnerable people, are at the core of what Chinese criminals call “pig butchering.” The term describes winning an individual’s trust over time in order to abruptly swindle them.
The scammers used Tether, the world’s largest stablecoin issuer, to move and launder the funds. The roughly $37 million in victim funds were transferred from the fraudsters’ U.S. bank accounts to an account in the Bahamas. They then directed that bank to convert the funds to the stablecoin Tether (USDT), which was then transferred to a digital asset wallet controlled in Cambodia.
Chinese fraudsters duping Americans is an issue that has been raised to U.S. legislators. Earlier this month, Burns Koven delivered a testimony in front of the Senate titled, ‘Made in China, Paid by Seniors: Stopping the Surge of International Scams.’
“Addressing this threat demands a holistic strategy that combines upstream prevention and victim remediation, deep collaboration between the public and private sectors, and truly international coordination among law enforcement, regulators, and industry partners,” Burns Koven said in a note to Fortune.
