The US government has confiscated over $14 billion (£10.5 billion) in bitcoin and has charged the founder of the Cambodian business conglomerate, the Prince Group, with allegedly orchestrating a vast cryptocurrency fraud that included forced labor camps. Chen Zhi faced charges on Tuesday in New York for purportedly participating in a wire-fraud conspiracy and a money laundering operation. Mr. Chen’s enterprises faced sanctions from both the US and the UK in a coordinated effort. The UK government has announced the freezing of assets linked to his network, which includes 19 properties in London, with one valued at nearly £100 million ($133 million). US prosecutors described it as one of the largest financial takedowns in history, marking the biggest seizure of bitcoin to date, with around 127,271 bitcoin currently held by the US government. Mr. Chen, still evading capture, is alleged to be the architect of a “sprawling cyber-fraud empire” functioning through his multinational enterprise, the Prince Group, according to the US Department of Justice.
The website of the Cambodia-based group outlines its ventures in property development, as well as financial and consumer services. However, the DOJ claims that it operates as one of Asia’s largest transnational criminal organizations. The DOJ reported that unsuspecting victims were approached online and persuaded to transfer cryptocurrency under the guise of false assurances that their funds would be invested and yield profits. According to court documents, prosecutors have claimed that the company, led by Mr. Chen, constructed and managed a minimum of ten fraudulent compounds across Cambodia. Prosecutors stated that Mr. Chen was accused of overseeing the compounds specifically engineered to target a wide array of victims. According to court documents dated 8 October, his accomplices allegedly procured millions of mobile phone numbers and established “phone farms” to carry out call centre scams. According to the documents, two of these facilities were found to possess 1,250 mobile phones that managed approximately 76,000 social media accounts used for scams. Prosecutors revealed that documents from Prince Group contained strategies for establishing rapport with victims, recommending that employees avoid using profile pictures of women deemed “too beautiful” to enhance the authenticity of the accounts. John A Eisenberg characterized the Prince Group as a “criminal enterprise built on human suffering”.
He stated that it also trafficked workers, who were confined in prison-like compounds and forced to carry out scams online, targeting thousands of victims worldwide. The DOJ reported that Mr. Chen and his accomplices purportedly funneled the criminal proceeds into lavish travel and entertainment. The department reported that they also made “extravagant” purchases such as watches, private jets, and rare artwork, including a Picasso painting acquired from a New York City auction house. If found guilty, Mr. Chen could be sentenced to a maximum of 40 years behind bars. In the UK, Mr. Chen and his associates are said to have set up companies in the British Virgin Islands and directed funds into real estate within the country. The UK foreign office reported on Tuesday that his network’s assets comprise a £100m office building located in central London, a £12m mansion in North London, and seventeen flats scattered throughout the city. Facing sanctions as a result of a coordinated effort with US authorities, he is now effectively barred from accessing the UK’s financial system. The Prince Group has faced sanctions in the US and has been designated as a criminal organisation. UK Foreign Secretary Yvette Cooper stated that they were “ruining the lives of vulnerable people and buying up London homes to store their money”. Cooper stated: “Together with our US allies, we are taking decisive action to combat the growing transnational threat posed by this network – upholding human rights, protecting British nationals and keeping dirty money off our streets.”
The foreign office reported that Mr. Chen and the Prince Group constructed casinos and compounds that served as scam centers, laundering the proceeds in the process. The foreign office has announced sanctions against four businesses associated with the alleged scams: The Prince Group, Jin Bei Group, Golden Fortune Resorts World, and Byex Exchange. Earlier this year, an Amnesty International report identified two scam centres purportedly operated by Jin Bei Group and Golden Fortune Resorts, highlighting issues of forced labour and torture within Cambodian scam centres. The foreign office reported that individuals employed in scam centres are frequently foreign nationals who are enticed by the allure of a legitimate job, only to be coerced into executing scams under the threat of torture. The foreign office reported that these scammers function on a “industrial scale,” including within the UK, employing tactics such as fake romantic relationships to entice victims into falling for their schemes. Fraud Minister Lord Hanson stated: “Fraudsters prey on the most vulnerable by stealing life savings, ruining trust, and devastating lives.” “We will not tolerate this.”