The U.S. government has taken significant action against a cryptocurrency scam, seizing over $14 billion in Bitcoin and charging Chen Zhi, the founder of a Cambodian conglomerate, with serious allegations. Chen and his unnamed associates are accused of exploiting forced labor to deceive potential investors while using the illicit proceeds to acquire luxury items, including yachts, jets, and a Picasso painting. The indictment, made public on Tuesday, details charges of wire fraud conspiracy and money laundering conspiracy against Chen, who chairs the Prince Holding Group. Concurrently, U.S. and British officials have imposed sanctions on his company, which operates in the realms of real estate and financial services, labeling it a transnational criminal organization.
### Allegations of Brutality and Deception
At 38 years old, Chen is accused of endorsing violence against employees and providing bribes to foreign officials, utilizing his other ventures, such as online gambling and cryptocurrency mining, to launder the proceeds from his illegal activities. Assistant Attorney General John Eisenberg described Chen as the “mastermind behind a sprawling cyber-fraud empire,” while U.S. Attorney Joseph Nocella emphasized that this operation is among the largest investment frauds recorded in history. Prosecutors highlighted that at one point, Chen boasted about the scam, known as “pig butchering,” generating daily revenues of $30 million.
### A Surge in Scam Operations
Authorities report that last year, American citizens lost at least $10 billion due to scams originating from Southeast Asia, marking a 66% increase compared to 2022. The Treasury Department identified Prince Holding Group as a “dominant player” in this alarming trend. Since as early as 2020, Chinese authorities have been investigating the company for its involvement in cyber fraud and money laundering, as noted in court documents reviewed by the U.S. Institute of Peace. Although Chen, a Chinese national also referred to as “Vincent,” remains at large, if found guilty, he could face a maximum sentence of 40 years in prison. Should the court permit it, the U.S. could utilize the 127,271 Bitcoins it confiscated to compensate victims, with the current value of each coin hovering around $113,000, subject to market fluctuations.
### Insight from Experts
Messages have been sent seeking comments from Prince Holding Group spokesperson Gabriel Tan, whose company’s website asserts adherence to global business standards. Additionally, a request for comment from Cambodian government spokesperson Pen Bona went unanswered. Jacob Daniel Sims, an expert in transnational crime and a visiting fellow at Harvard University’s Asia Center, remarked that the Prince Holding Group plays a crucial role in facilitating global cyber-scams, asserting that Chen is a “central pillar” of the criminal economy intertwined with Cambodia’s ruling elite. Chen has previously acted as an adviser to Prime Minister Hun Manet and his father, former Prime Minister Hun Sen, receiving the title “neak oknha,” equivalent to a lord in English.
### Implications of the Indictment
Sims noted that while the indictment and sanctions do not dismantle these criminal networks overnight, they significantly alter the risk assessment for global banks, real estate firms, and investors considering interaction with Cambodia’s elite. Last year, sanctions were also levied against Ly Yong Phat, a prominent Cambodian businessman and a key figure in the ruling Cambodian People’s Party, due to allegations of forced labor, human trafficking, and online scams.
### The Dark Reality of Forced Labor
According to the charges against Chen, the Prince Holding Group constructed at least ten facilities in Cambodia where workers, often migrants held against their will, were coerced into contacting numerous victims via social media or online messaging. They were instructed to build relationships and persuade these victims to transfer cryptocurrency under the false pretense of lucrative investment opportunities. In truth, prosecutors argue, it was a massive fraud operation. The funds obtained were redirected into other businesses and shell companies associated with Prince Holding Group, financing luxurious travel, entertainment, high-end watches, vacation homes, rare artworks, and luxury gifts for executives’ spouses. One victim reportedly lost over $400,000 in cryptocurrency.
### Conditions in Forced Labor Camps
The facilities operated as forced labor camps, featuring dormitories enclosed by high walls and barbed wire, equipped with automated call centers where hundreds of mobile phones managed tens of thousands of fraudulent social media accounts. One of the compounds was linked to the Jinbei Casino Hotel, while another was referred to as “Golden Fortune.” The Treasury Department’s sanctions statement revealed that workers at these sites were held in captivity, isolated, and sometimes subjected to beatings after being lured with promises of high-paying job opportunities in customer service or tech support. Disturbing photographs included in Chen’s indictment displayed victims with severe injuries, including a man with a bloody gash on his face and others bound and beaten.
### The Broader Context of Human Trafficking
Chen allegedly approved at least one instance of violence against a worker deemed problematic, but advised against “beating him to death.” Reports emerged of workers escaping from Golden Fortune and being “beaten until they are barely alive,” according to the Treasury Department. In 2023, the United Nations estimated that around 100,000 individuals were forced to engage in online scams in Cambodia, along with at least 120,000 in Myanmar, and tens of thousands more in Thailand, Laos, and the Philippines. Sims concluded that while these actions will not terminate the scam economy instantly, they will reduce its resources and send a critical message to regimes like Cambodia’s that elite crime as a governing strategy carries significant risks.
