Xuehai Sun, a 38-year-old Flushing, New York, resident, pleaded guilty to conspiracy to commit wire fraud for his role in a transnational scheme that defrauded elderly victims in the U.S. and Canada, with known losses exceeding $5 million.
According to an official Department of Justice (DOJ) release on Thursday, Sun entered his plea before U.S. District Judge Mary S. McElroy in Rhode Island on September 30. Authorities have identified about 300 victims in at least 37 states, including Rhode Island.
Investigators also identified another $16 million in suspected fraud proceeds that were allegedly laundered through a related account, according to prosecutors. Sun is scheduled to be sentenced on January 6, 2027. Conspiracy to commit wire fraud carries a maximum sentence of 20 years in federal prison, although his sentence will depend on the federal sentencing guidelines and other statutory factors.
Victims were told their finances were compromised
The fraud began with pop-up messages sent to victims’ computers that falsely appeared to come from legitimate technology companies, according to court documents. The messages warned that the victims’ computers had been hacked, their bank accounts compromised, or that they were under investigation. Victims were instructed to contact a purported live agent for assistance.
Those calls were then transferred to other members of the scheme posing as representatives of financial institutions or government agencies, including the Federal Trade Commission and the Federal Reserve Bank. The callers allegedly persuaded victims that they needed to move their money and other valuables to protect them.
Crypto, cash, and gold were used to move funds
Victims were directed to transfer assets through several methods, including wire transfers and cryptocurrency. Others were instructed to withdraw cash or purchase gold bars and hand them over to people involved in the scheme.
The assets were purportedly being sent to government-controlled accounts or otherwise safeguarded. Prosecutors said the money and valuables instead went to members of the conspiracy.
At his plea hearing, Sun admitted that he employed couriers to collect cash and gold from victims whose information had been provided by other conspirators. He also admitted coordinating the couriers’ movements and discussing the collection, transportation, and distribution of the proceeds with other members of the operation. He acknowledged that he knew the cash and gold had been obtained through fraudulent statements made to victims.
Authorities identified hundreds of victims
The investigation has so far identified approximately 300 victims across at least 37 states. Known losses attributed to the conspiracy exceed $5 million, according to prosecutors.
Investigators have also identified an additional $16 million in suspected fraud proceeds that were allegedly laundered through a related account. The figure represents suspected proceeds under investigation and is separate from the more than $5 million in known losses. Sun was arrested in New York and initially appeared in federal court in the Eastern District of New York before being transferred to Rhode Island for prosecution.
HSI and IRS led investigation
Homeland Security Investigations’ Providence office and the IRS Criminal Investigation division investigated the case through the Rhode Island Homeland Security Task Force.
The Narragansett Police Department, East Providence Police Department, New York Police Department and Texas Department of Public Safety also assisted. HSI offices in New England, New York, Houston and Los Angeles provided additional support.
The U.S. Attorney’s Offices for the Eastern District of New York and the Southern District of Texas also assisted with the investigation. Assistant U.S. Attorney Denise M. Barton is prosecuting the case.
Other crypto-linked fraud cases
The case comes amid a series of recent investigations involving cryptocurrency and alleged fraud. In San Jose, police arrested two Dallas men after investigators linked them to an alleged September 5 attempted home invasion in which suspects posed as delivery workers. Police said they believe the men targeted people with substantial cryptocurrency holdings. Investigators identified Damian Vielma, 20, and Jeremiah Clybourn, 19, using license-plate data and said they found links to similar incidents in other areas, including Atherton.
Separately, the U.S. Treasury Department sanctioned a Gaza-based Hamas military wing member, two France-based individuals and two organizations over an alleged fundraising network that authorities said moved more than $2 million to Hamas between 2020 and 2026. Treasury said cryptocurrency wallets and money-service businesses were used to move part of the funds.
Ukraine’s National Police also said it dismantled a network of fake cryptocurrency investment platforms that allegedly stole assets from 62 victims in more than 20 countries. Investigators said the platforms displayed fictitious investment gains and blocked withdrawals before directing users to approve small test transactions. According to police, those approvals instead gave a wallet drainer access to the victims’ assets, which were then transferred to wallets controlled by the operators.
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