The US Department of Justice has seized $15 billion worth of bitcoin from a man who allegedly ran an extensive investment fraud scam based in Cambodia.
The man, named as 37-year-old Chen Zhi, directed “one of the largest investment fraud operations in history,” said US Attorney Joseph Nocella.
In these scams, victims were contacted via social media and messaging applications and manipulated into transferring cryptocurrency into bank accounts controlled by the scammers.
The victims were promised that their funds would be invested and produce profits but, in reality, they were stolen and laundered by Zhi and his co-conspirators. Some of the funds were allegedly used for luxury travel, entertainment, and to make expensive purchases—including a Picasso painting.
In a press release, the US Attorney’s Office explained how individuals were held against their will in the compounds overseen by Zhi and forced to engage in cryptocurrency investment fraud schemes, also known as “pig butchering” scams, which stole billions of dollars from victims globally.
An indictment was unsealed in federal court in New York charging Zhi, with wire fraud conspiracy and money laundering conspiracy. If convicted of the charges, Zhi faces up to 40 years in prison.
Zhi is Founder and Chairman of Prince Group, a multinational organization that operates businesses in over 30 countries. These businesses ostensibly include real estate development, financial services, and consumer services firms. However, they also include 10 allegedly fraudulent compounds in Cambodia.
On Tuesday, the US Department of the Treasury and Office of Foreign Assets Control declared Prince Group to be a Transnational Criminal Organization (TCO), describing the organization as “a worldwide fraud and money laundering network fueled by illegal online gambling and human trafficking for forced labor.”
According to the Treasury, the Prince Group’s compounds engage in pig butchering scams, sextortion, torture, and investment fraud.
“Prince Group’s investment scams have caused billions of dollars in losses and untold misery to victims around the world, including here in New York, on the backs of individuals who have been trafficked and forced to work against their will,” Nocella added.
The trafficked workers forced to execute these scams were often threatened with violence, said the US Attorney’s Office.
“The compounds housed vast dormitories surrounded by high walls and barbed wire, and functioned as violent forced labor camps,” the Office said. “The defendant was directly involved in using violence against the individuals within the forced labor camps and possessed images of Prince Group’s violent methods, including photographs depicting beatings and other methods of torture.”
In parallel with the DOJ’s actions, the US Department of the Treasury and the UK’s Foreign, Commonwealth and Development Office have announced sanctions against Zhi and multiple associated individuals and entities for their alleged roles in the criminal activity.
