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U.S. prosecutors have filed charges against Cambodia’s Prince Group for wire fraud and conspiracy to launder money, following the seizure of over $14 billion in Bitcoin, marking one of the most significant financial crackdowns in history.
Summary
- Charges have been brought against Cambodia’s Prince Group and its chairman, Chen Zhi, for wire fraud and money laundering.
- The group was implicated in a vast crypto scam that exploited trafficked workers.
- If convicted, Chen could face up to 40 years in prison.
Led by Chinese-Cambodian businessman Chen Zhi, Cambodia’s Prince Group is a conglomerate that ostensibly functions across various sectors, including property development, finance, and consumer services. However, the U.S. Department of Justice claims this was merely a front for an extensive criminal organization that took advantage of thousands of victims through crypto fraud, human trafficking, and laundering operations.
The DOJ has indicted Chen, who holds dual citizenship in Cambodia and the UK, accusing him of leading a sprawling transnational scheme to deceive investors and conceal illicit funds via a network of shell companies and fraudulent schemes across Southeast Asia.
Court documents reveal that Chen managed at least ten scam locations in Cambodia, where trafficked individuals were reportedly coerced into running “pig butchering” scams targeting global victims.
Cambodia has gained notoriety for hosting such scam operations, positioning it as a hotspot for criminal activity in Southeast Asia, alongside nations like Myanmar, Laos, the Philippines, Malaysia, and Vietnam that have experienced a rise in similar networks.
“Trafficked individuals were confined in prison-like conditions and compelled to execute online scams at an industrial scale, targeting thousands globally, including many in the United States,” stated Assistant Attorney General for National Security John A. Eisenberg.
Chen’s compounds reportedly contained “phone farms,” established by his accomplices who collected millions of mobile numbers to maximize outreach to potential victims. During the crackdown, authorities discovered two farms with 1,250 mobile phones managing approximately 76,000 social media accounts used to perpetrate scams.
Authorities also uncovered documents from the Prince Group that detailed strategies for gaining the trust of potential victims, including the use of realistic social media personas and maintaining consistent communication, as well as avoiding profile pictures of women that appeared “too attractive” to enhance the authenticity of the scams.
Prosecutors alleged that Chen and his collaborators utilized the illicit profits to fund an extravagant lifestyle featuring private jets, luxury real estate, and rare artworks, all while disguising the criminal origins of their wealth through complicated money laundering techniques, including online gambling and cryptocurrency mining.
Under Chen’s direction, members of Prince Group employed advanced cryptocurrency laundering methods like “spraying” and “funneling.” Spraying involves quickly distributing stolen assets across numerous wallet addresses to complicate tracking, whereas funneling consolidates these funds through intermediate wallets and exchanges before converting them into stablecoins or fiat currency.
Investigators suspect that the group exploited cryptocurrency mixers, over-the-counter brokers, and offshore exchanges that enabled the proceeds to circulate undetected within the global financial system.
Authorities have seized approximately 127,271 Bitcoins from wallets linked to Chen and his associates, which are currently held under U.S. jurisdiction as the investigation progresses.
Chen faces a potential 40-year prison sentence if convicted, according to the Department of Justice, and remains at large. Authorities have not revealed his current location, but international efforts to apprehend him are reportedly underway.
Simultaneously, Prince Group has been designated a transnational criminal organization, and individuals affiliated with it have been sanctioned by the U.S.
Last year, the U.S. also sanctioned a different Cambodian business empire led by tycoon and senator Ly Yong Phat for orchestrating similar crypto scams that exploited trafficked workers.
