Crypto-less Crypto Investment Scams: A California Case

My readers will know by now that I am addicted to PACER - the Public Access to Court Electronic Records.  When I see headlines like this one, I am compelled to dive in and read every publicly released document related to the case.  

USAO Central California

The headline last month was that Shengsheng He, a 39 year old Chinese native living in La Puente California (described as being a resident of Los Angeles and Mexico City) had been sentenced to 51 months in prison and ordered to pay restitution in the amount of $26,867,242. The press release quotes Matthew Geleotti from the Attorney General's office:

 "The defendant was part of a group of co-conspirators that preyed on American investors by promising them high returns on supposed digital asset investments when, in fact, they stole nearly $37 million from U.S. victims using Cambodian scam centers.  Foreign scam centers, purporting to offer investments in digital assets have, unfortunately, proliferated."

When talking about Crypto Investment Scams, they certainly have "proliferated." They are currently the number one form of cybercrime financial losses in America, for the third year in a row, according to the FBI's IC3.gov.  When we refer to these "Pig Butchering" scams as Crypto Investment Scams, it is easy to forget that many "crypto" scams still rely on the tried and true method of wire transfers to shell companies. When we first started exploring Romance Scams and their link to Business Email Compromise, the mostly Nigerian scammers referred to these as "Wire-wire jobs." A wire goes from the victim to a shell company, and a second wire goes from the shell company to the ultimate beneficiary of the crime. While West African Organized Crime continues unabated, Chinese Organized Crime has taken the top spot and is learning that many of the methods of their West African predecessors are still quite useful.

(figures from the ic3.gov 2024 report)

In the Shengsheng He case each of the victims believed that they were wiring money to fund their crypto investments.  Despite believing they have purchased crypto currency with these funds, they cannot be traced on the blockchain because they do not exist on the blockchain!  The first wire transfer went to any of the dozens of shell companies that had been set up across America under the direction of Lu Zhang, an illegal immigrant from China. (Zhang pled guilty to "conspiracy to commit money laundering on 12NOV2024.)  The second wire in the "wire-wire" job would then send those funds to one of two bank accounts at Deltec Bank in the Bahamas in the name "Axis Digital Limited." Deltec Bank's website is titled "Deltec Bank: Ultra-Sophisticated Private Banking" and boasts of their "robust anti-money laundering framework." 

 

Axis Digital Limited served as an off-shore crypto exchange that seems to have been created for the purpose of taking "wire-wire" proceeds from Crypto Investment Scams and converting the funds to USDT before transferring them on to the Chinese Organized Crime gangs operating the scam centers in Sihanoukville, Cambodia.

The case is being prosecuted in the Central District of California in four parts.

Zhang, Wong, Walker, Zhu - Sea Dragon Trading & the Shell Companies

One of the cases focuses primarily on the network of US-based shell companies created to receive the wire transfers from the victims.  The victims believed they were funding their crypto investments, and would see "deposits" into their imaginary crypto investment accounts that corresponded to the amount of their wire transfers.  Court records show that "at least 284 transactions resulted in more than $80 Million in victim losses." The defendants in this case, with their ages as of December 14, 2023, were named in an initial press release entitled: "Four Individuals Charged with Laundering Millions from Cryptocurrency Investment Scmas Known as 'Pig Butchering'" 

• Lu Zhang - (36, of Alhambra) was sentenced to 24 months + $7,560,014 restitution
• Joseph Wong - (32, of Rosemead) was sentenced to 51 months + $7,560,014 restitution
• Justin Walker - (31, of Cypress) was sentenced to 30 months 
• Hailong Zhu - (40, of Naperville, Illinois) has not been sentenced yet

Sea Dragon Trading, LLC and Sea Dragon Remodel, Inc were two of the companies created by Hailong Zhu, but the list of shell companies below collectively sent $20,083,987 in wires to Deltec Bank in the Bahamas:

• BFC REMODEL, LLC;  - 408 W Glendon Way, San Gabriel, CA 91776

• BFC SUPPLY, LLC; - 408 W Glendon Way, San Gabriel, CA 91776 

• CREATIVE HOMEGOODS, LLC;  - 823 W Huntington Dr. Apt B, Arcadia, CA 91007

• FUYU COMMERCE, LLC;  - 1140 S El Molino St, Alhambra, CA 91801

• GOOD LUCK TRADING, LLC;  - 2220 Falling Leaf Ave, Rosemead, CA 91770

• HONG'S TRADING, LLC; - 1140 S El Molino St, Alhambra, CA 91801 

• KAIS TEA SET SUPPLIES, LLC;  - 508 Bellows Ct, Diamond Bar, CA 91765

• LEADING CONSTRUCTION, LLC;  - (multiple - unsure)

• LJS REMODELING, LLC;  - 1441 Paso Real Ave SPC 254, Rowland Heights, CA 91748

• LJS SUPPLY, LLC;  - 650 W Duarte Rd Suite 100B, Arcadia, CA 91007 

• LQH SUPPLY, LLC;  - 823 W Huntington Dr, Apt B, Arcadia, CA 91007

• MINGXING REMODEL, LLC;  - 4661 District Blvd, Vernon, CA 90058

• MINGXING TRADING, LLC;  - 2220 Falling Leaf Ave, Rosemead, CA 91770 

• QAG TRADING, INC. - 8811 Garvey Ave, 202, Rosemead, CA 91770 

• QAG TRADING, LLC;  - 3254 Evelyn Ave, Rosemead, CA 91770 

• SEA DRAGON REMODEL, INC;  - 4661 District Blvd, Vernon, CA 90058

• SEA DRAGON TRADING, LLC;  - 1140 S El Molino St, Alhambra, CA 91801

• SHANGHAI FOOD & GROCERIES, LLC;   - 250 W Valley Blvd, Ste M, San Gabriel, CA 91776

• SUNRISE SUPPLY, LLC;    - 823 W Huntington Dr. Apt B, Arcadia, CA 91007

• XIEYUNZHU TRADING, INC;  - 1441 71st STreet, Apt 1, Brooklyn, NY 11228 

• YHM SUPPLY, LLC;  - 401 S Canyon Blvd Unit C, Monrovia, CA 91016

• YHM TRADING, LLC;  - 401 S Canyon Blvd Unit C, Monrovia, CA 91016

• YZX LUXURY, LLC;  - 1036 S Garfield Ave, B, Alhambra, CA 91801 

• YZX TRENDING, LLC;    - 1036 S Garfield Ave, B, Alhambra, CA 91801 

Li & Zhang - the Telegram Connection

In a second case, the defendants were: 

• Daren Li, 41
• Yicheng Zhang (39, of China) (sentenced to 18 months and $1,047,226 in restitution)

Zhang & Li controlled four additional shell companies: 

• B&C Commerce, LLC - 180 E Valley Blvd Ste 202, San Gabriel, CA 91776 

• Jimei Trading - 785 King St, San Gabriel, CA 91776 

• SMX Beauty, Inc. - 132 E Emerson Ave, Unit C, Monterey Park, CA 91755 

• SMX Travel, Inc. - 132 E Emerson Ave, Unit C, Monterey Park, CA 91755 

The DOJ described Daren Li as "41, a dual citizen of China and St. Kitts and Nevis, and a resident of China, Cambodia, and the UAE." He was arrested 12APR2024 at the airport in Atlanta.  The DOJ press release "Two Foreign Nationals Arrested for Laundering at Least $73M through Shell Companies Tied to Cryptocurrency Investment Scams" says that Li and Zhang (a resident of Temple City, California) "instructed co-conspirators in the laundering network to open bank accounts in the names of various shell companies. Once the victims sent funds to the shell companies, Li and Zhang monitored the lower-level co-conspirators who transferred the proceeds overseas to bank accounts at Deltec Bank in The Bahamas." The funds were then converted to cryptocurrency and sent to wallets, including at least one controlled by Li. 

Zhang's communications revealed "extensive coordination to facilitate the international money laundering, including chats discussing the commission structure for the network, various shell companies used, victim information, and at least one video from a co-conspirator calling a U.S. financial institution." 

Daren Li is described as being "the leader of the syndicate."  Daren used his Telegram id (@KG71777) to communicate with the Cambodia-based members of the conspiracy.  (Daren's email was: darren1575687@gmail.com).  In court documents, the primary USDT address of the conspiracy is referred to as "the TRteo" address (for the first five characters of the address.)  While TRteo is not an uncommon prefix, there are certainly very few such addresses that have received in excess of $39 Million in deposits, much less the higher number mentioned in the press release of $341 Million! In fact, there is only one. 

Chinese Blockchain intelligence company "BlockSec" blogged about that wallet on their QQ page.  Using their tool, MetaSleuth, they were able to successfully identify the full wallet address, TRteottJGH5caJyy9qFuM8EJJGGCpDaxx6.  The wallet became inactive on 29APR2024, but from its initial transaction on 16APR2021, more than $300 Million USD in more than 16,000 deposits  flowed through that address, including transactions to and from HuionePay. 

BlockSec QQ Post

Because Daren Li is described as being in control of this USDT wallet, it is generally considered that he was the leader of this entire enterprise. In July 2022, a meeting was held in Phnom Penh of the top leadership. Daren Li, JingLiang Su, Shengsheng He, and Jose Somarriba were all present.  Daren Li also controlled a Binance account that received at least $4.5 Million in USDT that originated from "Bahamas Account #2." He was also the source of funds to create that "Bahamas Account #2 at Deltec Bank by transferring $999,383 in USDT. 

Jose Somarriba, Axis Digital, and Itemized Victim Losses 

Jose Somarriba (55, of Los Angeles) (sentenced to 36 months and $26,867,242.44 in restitution) is being held responsible for the losses from 174 victims.  Those victims are listed by their initials and the dollar amounts that each had stolen from them.  The average victim lost $154,409.44!  (The median loss was $61,250.) The victims who had the most money stolen were in the amounts: $5,616,000; $2,340,000; and $1,030,279! Nine victims experienced a theft of $500,000 or more. 

(extract from loss amounts for 174 victims) 

Somarriba was a co-founder of Axis Digital, along with Shengsheng He and Jingliang Su.  He was the one who opened the "Bahamas Account #1" at Deltec Bank which received $36.9 million in wire transfers from American bank accounts. He prepared fraudulent KYC forms to present to the banks as well as being primarily responsible for converting Deltec funds to USDT and transferring the funds to Cambodia via a USDT wallet referred to as "TRteo" in the court documents. 

Jingliang Su - the Dubai Connection

The final of the linked cases is the case of Jingliang Su, (44, of China and Turkey). Su was sentenced to 51 months in federal prison and to pay $26,867,242.44 in restitution.  

Preferring the name "James," Su resided in Dubai.  He was a director of Axis Digital and was a signatory to "Bahamas Account #1" at Deltec Bank. He is described as being "a citizen of China and St. Kitts and Nevis" and a resident of Cambodia, the UAE, and the People's Republic of China.

Transnational Organized Crime Gang Steals $1 Million from Ontario Couple

Today my LinkedIn feed and Google News filter is showing me several stories that illustrate how we are failing to stop online scammers from stealing from our elderly.  It starts with the headlines.

CTVNews:  Ontario seniors GIVE AWAY MORE THAN $1 MILLION to scammers.
CTVNews: Ontario couple LOSES MORE THAN $1 MILLION DOLLARS to fraud.
Toronto Only: A couple ... LOST MORE THAN $1 MILLION 
Daily Mail:  Elderly couple transfer $1m to online scammers despite warning from bank

The tone of several of these stories, is victim shaming and leads with the wrong headline. They didn't "Give away" or "Lose" or "Transfer" these funds.  They were STOLEN FROM THEM.  

Illicit Call Centers: "Facebook Pop-Ups" 

One of the ways that we learn about how these scams play out is that we engage with scammers.  I'm not a professional scam baiter or anything close to it, but it is a useful research tool. When I read the story of the Ontario couple, I knew exactly the type of script that was being followed, because I experienced it last month.  Usually when I call an illicit call center on purpose, I am asked very quickly to give remote control of my computer to the scammers. But one day last month, the call followed a very different script than the primary ones to which I am accustomed.  It started with a Facebook advertisement.

In the top right corner of my Facebook homepage, I had two advertisements displayed: 

The goal of these advertisements is to make a less than wary Facebook user believe that they have unread messages that need to be attended to.  I actually wrote a longer piece for LinkedIn about this type of advertisement about six months ago.  See: "Dangerous Facebook Ads and Call Center Scams" on my LinkedIn page.  In this case, the "vendor" who is providing the Facebook Ads portion of this scam is almost certainly operating from Vietnam.  Crime is global.  Who knew?

Clicking the ad, in the incident that I experience on October 17, 2025, led to exactly the same next steps as the ones I reported on April 24, 2025.  

A fake "Facebook Suspended" page (hosted on web.core.windows[.]net)

Whether you choose "Accept" or "Ignore" on this page, the next thing that happens is that your browser goes "Full Screen" and begins to play an audio warning on loop while displaying this Warning Page: 

Mouse clicking is disabled while an audio warning tells us our Facebook account is going to be deleted if we don't call the indicated number immediately.  I know that I can "Alt-F4" out of this message, but many users would not know how to do so. 

According to our friends at URLScan.io, they have received reports of the "Facebook Suspended" intermediate page in the scam delivery using 933 different URLs, most recently, today.  After a huge spike from November 2024 to January 2025, there has been a constant trickle of these nearly every day since ... often using Microsoft Azure nodes. 

URLScan.io statistics on this page.

Checking the Meta Ad Library, it is easy to see that a new round of these ads launched on October 29, 2025 (two days ago): 

The new ads redirect through a slightly different intermediary page (I have an incoming call from a pretty girl) and then tell me that "Microsoft Care has temporarily disabled your Internet connection" and that I need to call or my "Facebook and Internet accounts will be permanently disabled."

new intermediary page

new BSOD page as of 31OCT2025

Illicit Call Centers: Qualifying and "Recruiting"

When I placed my call to the scammers on October 17th, I have to admit to being a bit inspired by "Scammer Payback" as I had recently written about his work in breaking up a $65 Million Crime Ring.  I wrote about it in my post "Indian Call Center Scammers Partner with Chinese Money Launderers" on this blog. Following Pierogi's lead, I answered the scammers questions as if I were a retiree.  (Don't let the grey beard fool you, I'm not!) 

The first thing the scammers had me do was to power off my computer. (I was playing an MP3 of their scam audio so they believed I was still on their "lock screen.") 

They asked me "Is this your own computer? or a work computer?"  I answered "Work computer? Heavens no!  I haven't worked in years!" 

Then they asked me "Do you know what an IP address is?"  I answered "No, I've never heard of an IT address, but my grandson works in IT ... is this related to him?" 

They gave me a very poor explanation of what an IP address is and then asked who my Internet carrier was.  I lied and told them a carrier that doesn't even offer services in my area. They "put me on a brief hold" during which I could hear people talking in Hindi to one another.  Then they came back and said "Yes, I see that your IP address is under investigation by (imaginary carrier)!" 

Then they asked me where I banked (I lied again) and whether I had an investment account (I lied again.) After putting me on another hold, they came back and said that my bank account was also under investigation.  After a few minutes, they came back and said (in a very grave voice) that unfortunately, I was under suspicion for distributing "child pornography" (an obsolete and inappropriate term for Child Sexual Abuse Materials). Unfortunately, they had no choice but to turn this matter over to the FBI.  Please hold as they were going to transfer me to the FBI Agent then.

As I denied having any involvement in CSAM materials, the FBI Agent very sternly yelled at me and asked me for my ZIP Code. 

Unfortunately I had a meeting to attend about then, so I disengaged, but I know the rest of that script.  The ZIP Code is so that they can look up the address of the nearest Bitcoin ATM from my house. 

This is the BEGINNING of what happened to "the Ontario Couple" (only of course they were speaking to a Royal Canadian Mounted Police Agent, rather than an FBI Agent.)

We have assisted in several of these cases -- twice involving the elderly relatives of my own students -- who were convinced over the course of many phone calls over many days -- that they needed to withdraw their cash from the bank, and in one case, put the cash in an overnight delivery box and ship it to a CVS store in the Chicago area. 

Why would they do that?  Because the FBI, convinced of their innocence, had asked their permission to use their bank account for a "sting" against a Mexican Drug Cartel. The "FBI Agent" in one case made them take an imaginary oath, similar to the oath one would take when being sworn into military service, that as part of the FBI's Undercover Operation, they were not allowed to speak to anyone about their secret mission.  Doing so would result in them being arrested and charged with Obstruction of Justice.

So when the bank says "Why are you withdrawing this money?" and they reply "Because I've decided to invest in Gold Bars" they are not "ignoring the warning of the bank" they are "following their orders as a sworn undercover agent assisting the FBI in breaking up a drug cartel!"  In the Ontario couple's case, the psychological oppression and manipulation continued for FIVE MONTHS as they had their money slowly stolen by a TransNational Organized Crime group who has perfected the art of manipulation. 

And in that scenario, the Daily Mail and CTV want to broadcast that these fools gave their money away to criminals despite the bank's warning and they want YOU to believe that is what happened.  

Shame on them!

Illicit Call Centers: Crime-As-A-Service (via Facebook)

How do these types of crimes begin?  To understand, it is necessary to start taking apart the illicit call center Crime-as-a-Service model that operates via Facebook Groups.  We've been talking about these for nearly a decade now and they are more active now than ever before. 

Here's an example of a scammer boasting that he offers calls on a "Pay Per Call" model for a variety of fraud types.  Facebook, Blue Screen of Death, Amazon, and PayPal. His point in sharing the Call Duration is to indicate that his calls are "sticky." That is, they are likely to have a long enough conversation to "sink the hook."  Calls from 1308 seconds (21 minutes) to 4765 seconds (79 minutes!) are likely to have been believable enough that there is time to have taken the scam to a financially rewarding level. 

"Sounds" posted their advertisements in groups such as: 

• all about tech support
• Genuine Techsupport calls and blocking
• Tech support calls 
• PPC Expert for Tech Support 
  
• PPC Services for Tech Support
• Tech Support Genuine Calls Kolkata/Delhi
• Tech Support Calls Delhi/Noida/Chandigarh

Every piece of the criminal infrastructure needed to run these scams is available in this Crime-as-a-Service Facebook groups.  Whatever your Illicit Call Center needs, they can provide it.

Toll Free Numbers? 

Fake invoices sent via PayPal?

Cash Pickup services in USA and Canada?

Zelle accounts to use for money laundering?

And of course as we have already mentioned, the Chinese Money Laundering Organizations are now offering their services inside the Indian Call Center CaaS Facebook groups as well ... (+852 = Hong Kong)

"Kevin" is in the Facebook groups that are more dedicated to the money laundering side of these transnational organized crime operations.  Groups like: 

• Venmo,varo,paypal,zelle,cash 
• PayPal, Venmo And Cash App Verification - 11,400 members
• Paypal | Venmo | Zelle | G-Pay 24/7 Support - 2,100 members

That largest group has been "frozen by Admin" after we reported the popular "BuyAccounts" service that was offering to sell stolen bank accounts and advertiser accounts: 

"Norman Mike" was advertising an Indian telephone number despite attending the University of Johannesburg, living in London, and having an American flag as their cover image. 

https://www.facebook.com/norman.mike.7528/

I'll be sure to post an update on what happens when we suggest to Facebook that Norman Mike may be a fake account!

Illicit Call Centers:  STOP BLAMING THE VICTIM! 

In this Crime-as-a-Service Infrastructure, criminals like the Vietnamese programmers who place the Facebook ads work with Indian "Lead Generators" who promise to send "Facebook Pay Per Call" telephone calls from potential victims to Illicit call centers in India and Pakistan, who use Pakistani-provided Toll Free Numbers to make connection, and then use Chinese Money Laundering Organizations to pick up their cash, could we agree that perhaps things are a bit more complicated than our average Ontario pensioner is able to tackle by themselves? 

When the Illicit Call Center's scripts and practices qualify the victim as an elderly high wealth pensioner and they are "recruited by the FBI or RCMP" it is entirely insufficient for the bank to say "Sir, this may be a scam" and then boast to the media how they provided an adequate warning!

Our APWG eCrimes Paper on Tech Support Scam Facebook Groups

My colleague Raghavendra Cherupalli will be at APWG eCrime next month sharing a paper based on our research into the Facebook Groups where illicit Indian Call Centers share "Crime-as-a-Service" offerings with one another.

In our paper, "Classification of Cybercriminal Posts Using Large Language Models: A Comprehensive Study on Tech Support Scam Marketplaces," Raghavendra will be sharing how he and the team have categorized 380,000 posts from 90 of these groups to determine the nature and most prominent trends in these groups. Since our initial dataset was gathered, my colleagues at DarkTower have gathered nearly a million additional posts from hundreds of similar Facebook groups. (And yes, we've reported these groups to Meta, who has terminated a few dozen, but hundreds more reports were rejected as "not violating community standards.) We can't wait to get Raghavendra to run his analysis on the expanded dataset!

What type of groups and posts are we talking about? Here's a sampling:

"Buy Sell Popup Calls" says the 1700 member group was created "basically for both buyers and sellers to buy and sell the tech support pop up calls." The most recent post in that group, offering Facebook phishing kits, is by a user called "Hex Manual." We reported that post to Facebook, who responded that it does not violate Community Standards. (His post also includes a fake FTC phishing page.)

One of the posters in this group is Manoj Singh. His post advertises his email blasting services, where he sends emails imitating Geek Squad, PayPal, Norton, and Microsoft to cause calls going to the purchaser's illicit call center. 

Manoj is an admin of several groups and has posted his ads to at least 17 additional groups with 143,230 total members (as of 12OCT2025.)

Krati-Krati advertises that he can provide "Blue Screen of Death" calls filtered for people who are 50+ years old and pop-ups on IOS devices filtered for people who are 45+ years old.

Brijesh Mohan offers calls, but also provides Zelle, Google Pay, Apple Pay, Venmo, CashApp, and Canadian Interac accounts that can be used for money laundering quick payments from North American victims.

While these examples, and hundreds of thousands of similar ones, are easily obtainable, Raghavendra and his professors at the University of Tulsa, Tyler Moore, Yi Ting Chua, and Weiping Pei have developed some awesome tech for analyzing these messages in bulk. That is necessary to gain true understanding of these scams!

We'd be thrilled to have you attend his presentation!  With this year's conference in San Diego, it would be a great opportunity to attend an APWG eCrime Research event! Get your tickets and register here ==> https://apwg.org/events/ecrime2025