PHILADELPHIA, PA — Xing Zheng, 35, of Queens, New York, was sentenced to 28 months in federal prison and three years of supervised release, according to an announcement by United States Attorney David Metcalf. The sentencing, handed down by United States District Court Judge Timothy J. Savage on April 1, comes after Zheng admitted his role in an extensive conspiracy to launder nearly $2.98 million in fraudulent proceeds. Among these illicit funds were over $426,000 derived from stolen Social Security retirement benefits and COVID-19 relief payments from workforce agencies across six states.
Zheng, who pleaded guilty to conspiracy to commit money laundering in December, was also ordered to pay $426,044 in restitution to the Social Security Administration (SSA) and affected state workforce agencies, as well as a forfeiture judgment of $745,000.
Laundering Millions from Fraudulent Schemes
The scheme Zheng participated in involved a co-conspirator operating under aliases such as “Christian Dasilva” and “Christian Hernandez.” Together they used stolen identities to file fraudulent claims for SSA Retirement Insurance Benefits (RIB) and Pandemic Unemployment Assistance (PUA) funds. The payments were deposited into bank accounts opened and controlled by the conspirators.
Another key player in the operation was Myrna Ortiz, 46, of Philadelphia, Pennsylvania, who was recruited by “Christian” through an online dating platform. Ortiz, who developed a relationship with her accomplice via digital communication, assisted in filing fraudulent claims targeting retirees eligible for Social Security benefits. Much of the scheme focused on high-income earners over the age of 62 who had not yet filed for Social Security. The fraud impacted at least 23 victims.
Ortiz further deepened her involvement by opening 10 bank accounts under “Christian’s” instructions, facilitating the deposit of fraudulent funds. She then withdrew the payments and converted them to gift cards, which she handed over to “Christian” by sharing their account details and PINs.
By May 2020, “Christian” involved Zheng in laundering the stolen proceeds. Using encrypted communication platforms, “Christian” directed Zheng to obtain and process debit cards and gift cards loaded with fraudulent funds. Zheng, in turn, converted these into cryptocurrency for “Christian” in exchange for a 25% commission. Over the course of the conspiracy, Zheng purchased approximately 1,565 debit and gift cards valued at $2.98 million.
Sentencing Holds Fraud Participants Accountable
During the proceedings, U.S. Attorney Metcalf highlighted Zheng’s critical role in enabling the larger conspiracy. “While Zheng did not personally participate in the fraud against the government, he knew that the money he was laundering was criminally derived,” said Metcalf. “Nonetheless, he was happy to participate, launder funds on a near-daily basis, and take his 25% cut, even as his crimes helped perpetuate the underlying fraud. My office will continue to target crooks who steal from the government — and those who enable them — dismantle their schemes, and bring them to justice.”
The scheme also came under scrutiny for its misuse of critical federal funds. Wayne A. Jacobs, Special Agent in Charge of the FBI Philadelphia Field Office, noted, “The millions of dollars fraudulently obtained in this case were intended to support struggling Americans during a time of unprecedented crisis—not to line the pockets of those driven by greed. The FBI remains committed to protecting the integrity of these vital relief programs.”
Other officials echoed these sentiments, emphasizing the impact of fraud on public trust and government resources. Colleen Lawlor, Special Agent in Charge at the SSA Office of Inspector General, stated, “This 28-month prison sentence holds Mr. Zheng accountable for stealing money from rightful beneficiaries who rely on these funds to survive.” A similar warning was issued by Special Agent in Charge Syreeta Scott of the Department of Labor’s Office of Inspector General, who reaffirmed her office’s commitment to combating abuse of unemployment insurance systems.
Ortiz’s Role and Penalty
Earlier this year, co-defendant Ortiz was sentenced for her involvement. Although her role in the conspiracy was substantial, her penalty was comparatively lighter. She received one day in prison, two years of supervised release, and was ordered to pay $688,049 in restitution. Nearly $96,500 of the laundered funds in Zheng’s possession were traceable to Ortiz’s fraudulent activities.
Investigative Efforts and Future Actions
The case was a collaboration among several investigative agencies, including the Social Security Administration Office of Inspector General, the FBI, and the Department of Labor Office of Inspector General. Through coordinated efforts, federal authorities disrupted the scheme and brought its participants to justice.
“This sentencing affirms the Office of Inspector General’s commitment to work with our federal and state law enforcement partners to protect the integrity of the unemployment insurance system from those who seek to exploit this critical benefit program,” stated Scott.
The prosecution of this case was led by Special Assistant United States Attorney Megan Curran. Judicial and investigative authorities hope the sentencing sends a strong message regarding the consequences of defrauding government programs, particularly during critical periods of public need.
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