Zheng Zhao extradited from the Netherlands over $36.9 million crypto scam money sent through Deltec Bank as USDT

The Netherlands has extradited Zheng Zhao, a 44-year-old Chinese national, to Los Angeles, where he was arraigned in federal court on a charge of conspiracy to commit money laundering, the US Department of Justice said on Friday 23 October 2026. Prosecutors allege that Zhao belonged to a network that took more than $36.9 million from 174 American victims of a crypto investment scam run from Cambodia, and that he and others had a bank in the Bahamas turn the money into USDT and send it to a wallet controlled in Cambodia. The charge, filed in August 2025, carries up to 20 years in prison. Zhao has not been convicted, and the Justice Department release recalls that every defendant is presumed innocent until proven guilty.

Eight of his alleged co-conspirators have already pleaded guilty, according to the DOJ. Two of them are serving prison terms; a third, Daren Li, fled the country before he was sentenced.

The scheme the DOJ describes follows the pattern often called pig butchering: strangers who build trust online, a fake trading site, balances that seem to grow, and money that never comes back. The release itself does not use that term. Our guide to how a pig butchering scam works, step by step explains the method.

Zheng Zhao extradited 14 months after the charge

The Justice Department’s Office of International Affairs worked with Dutch authorities to secure Zhao’s arrest and extradition, the release says. It does not say when he was arrested in the Netherlands, whether he fought the extradition, or when a Dutch court ruled. Fourteen months passed between the August 2025 charge and his arraignment in Los Angeles. The DOJ gives no reason for the delay.

Nor does the release say whether Zhao entered a plea, whether he is held in custody, or when he returns to court. We found no statement from his lawyer and none from the Dutch authorities.

Assistant Attorney General A. Tysen Duva, who heads the Criminal Division, used the case as a warning to scam networks abroad. “Wherever you are, we have the reach to find you,” he said in the release. Todd Bratz, special agent in charge of the Secret Service’s Criminal Investigative Division, said the case should warn scammers “in every corner of the world: there is nowhere to hide.”

The case belongs to the Criminal Division’s Cyber-Enabled Scam Initiative. The Secret Service’s Global Investigative Operations Center is investigating, helped by a Homeland Security Investigations task force, Customs and Border Protection’s National Targeting Center, the State Department’s Diplomatic Security Service and the US Marshals.

The money trail: US accounts, Deltec Bank, USDT, a wallet in Cambodia

According to the DOJ, people working from scam centres in Cambodia contacted Americans through unsolicited messages on social media, phone calls, texts and dating apps. They then pushed them towards fake websites built to look like real crypto trading platforms, where the victims’ supposed investments appeared to grow.

None of it reached a real exchange. Prosecutors say more than $36.9 million in victim funds left US bank accounts controlled by the co-conspirators and landed in a single account at Deltec Bank in the Bahamas. Zhao and others allegedly arranged for the bank to convert the dollars into Tether’s stablecoin, USDT, and send it to a wallet controlled in Cambodia. From there, Cambodia-based members of the network passed the USDT on to the leaders of scam centres across the region.

An earlier DOJ release, from June 2025, gives the name on the Bahamian account: Axis Digital Limited, a company set up by two of the defendants, and it names Sihanoukville, the Cambodian coastal city, as one of the destinations of the converted funds, according to the Secret Service copy of that release.

Zhao’s own part is left vague. The 2026 release describes his conduct only as part of the group’s: it does not say whether he ran shell companies, dealt with the bank or controlled the Cambodian wallet, nor where he lived or how investigators found him. The release makes no allegation against Deltec, which appears only as the bank where the account was held, and we found no action against the bank.

The release does not say whether any of the USDT was frozen or seized either. Tether can freeze tokens at the address level, a power described in our page on Tether, the company behind USDT, but nothing in the file shows it was used here. The $36.9 million is the amount the DOJ says was moved, not a confirmed total of losses. In the September 2025 sentencing of one co-defendant, the court set restitution at $26,867,242.44.

USDT keeps turning up in US laundering cases. Three days before the Zhao release, a Colombian broker was sentenced in Manhattan to 160 months for moving $14.5 million of drug money through USDT.

Eight guilty pleas so far, two sentences of 51 and 46 months

The Zhao file is the latest step in a case that has been running in the Central District of California since 2024. In June 2025 the DOJ announced guilty pleas from five men, in a release mirrored by the Secret Service. A September 2025 release adds Daren Li and Lu Zhang. Together these releases name seven of the eight people the DOJ says have pleaded guilty.

Both prison terms handed down so far went to men who admitted running an unlicensed money transmitting business, which carries up to five years. Zhao is charged with the heavier count, money laundering conspiracy, with a maximum of 20 years.

Daren Li, the defendant who got away

Li’s file runs the other way from Zhao’s. Li, a dual national of China and St Kitts and Nevis, was arrested at Atlanta’s airport in April 2024. When he pleaded guilty he admitted that at least $73.6 million in victim funds reached accounts his team controlled, $59.8 million of it through US shell companies.

He has not served a day of his sentence. Li cut off his ankle monitor and left the United States in December, and was then sentenced in absentia to 20 years in prison, The Record reported on 10 February 2026. Duva said at the time that the Criminal Division would work with partners abroad to bring Li back to serve the full term. We found no report that he has been caught since.

When Li and Yicheng Zhang were charged in May 2024, Protos reported that the money had passed through US shell companies and Deltec Bank in the Bahamas before being converted to USDT. The DOJ’s September 2025 release lists Li among those who pleaded guilty in the same conspiracy as the Axis Digital founders, prosecuted in the same Los Angeles court.

Cambodia’s scam centres and the US crackdown

The DOJ release places the scam centres behind this scheme in Cambodia, and the June 2025 release names Sihanoukville. The DOJ’s Scam Center Strike Force, a separate unit, listed $938,460,156.82 in crypto restrained on its page last updated on 15 October 2026, as we reported in our piece on the White House scam crackdown and money not yet returned to victims.

The Zhao file is a different case from the one against Prince Group and its chairman Chen Zhi, indicted in the United States in October 2025, arrested in Cambodia on 6 January 2026 and sent to China, according to OCCRP. The DOJ release does not link Zhao to that group, and nor do we.

Like the Strike Force figures, the Zhao release talks about arrests and prosecutions, not refunds. It says nothing about what the 174 victims may recover.

How to spot a pig butchering scam

The DOJ’s account of the scheme matches the warning signs below. One of them alone proves nothing; several together are the usual pattern.

• A stranger contacts you first, on social media, by text or on a dating app, and the talk turns to investing after days or weeks.
• You are steered to a trading site or app you did not find yourself, which looks like a known exchange but has a slightly different address.
• Your balance on that site keeps rising, yet withdrawals bring new fees, taxes or verification costs.
• You are asked to send money by bank transfer to a company account or to buy USDT and send it to an address they give you.

Our guide on how to avoid crypto scams and where to report them lists the main types, the checks to make before sending money and the reporting routes outside the US. In the United States, the DOJ asks victims of crypto investment fraud to report it to the FBI’s Internet Crime Complaint Center at IC3.gov.

The DOJ has not published Zhao’s plea, his custody status or the date of his next hearing in Los Angeles.