An indictment has been unsealed in federal court in Brooklyn, New York, charging Cambodian national Chen Zhi, also known as Vincent, 37, the founder and chairman of Prince Holding Group (Prince Group), a multinational business conglomerate based in Cambodia, with wire fraud conspiracy and money laundering conspiracy for directing Prince Group’s operation of forced-labour scam compounds across Cambodia.
The indictment was unsealed on October 14.
Individuals held against their will in the compounds engaged in cryptocurrency investment fraud schemes, known as “pig butchering” scams, that stole billions of dollars from victims in the United States and around the world.
The defendant is at large.
The U.S. Attorney’s Office for the Eastern District of New York and the Justice Department’s National Security Division also filed on October 14 a civil forfeiture complaint against approximately 127,271 Bitcoin, currently worth approximately $15 billion, that are proceeds and instrumentalities of the defendant’s fraud and money laundering schemes, and were previously stored in unhosted cryptocurrency wallets whose private keys the defendant had in his possession.
Those funds (the defendant’s cryptocurrency) are presently in the custody of the U.S. government. The complaint is the largest forfeiture action in the history of the Department of Justice.
Attorney General Pamela Bondi and Deputy Attorney General Todd Blanche said, “By dismantling a criminal empire built on forced labour and deception, we are sending a clear message that the United States will use every tool at its disposal to defend victims, recover stolen assets, and bring to justice those who exploit the vulnerable for profit. We are grateful for the hard work of Director Patel and the men and women of the FBI.”
As alleged in the indictment and forfeiture complaint, since approximately 2015, the defendant has served as the founder and chairman of the Prince Group. This Cambodian corporate conglomerate operates dozens of business entities in more than 30 countries. Prince Group is ostensibly focused on real estate development, financial services, and consumer services.
However, in secret, the defendant and his top executives grew Prince Group into one of Asia’s largest transnational criminal organisations. Under the defendant’s direction, the Prince Group generated enormous profits by operating scam compounds across Cambodia that perpetrated fraudulent cryptocurrency investment schemes.
To perpetrate these schemes, malicious actors contacted unwitting victims through messaging or social media applications and convinced them to transfer cryptocurrency to specified accounts based on false promises that the funds would be invested and generate profits.
In reality, the funds were stolen from the victims and laundered for the benefit of the perpetrators. The scam perpetrators often built relationships with their victims over time, earning their trust before stealing their funds.
Prince Group’s schemes targeted victims worldwide, including in the United States, with assistance from local networks working on the Prince Group’s behalf. One such network operated in Brooklyn, New York, and facilitated the fraudulent transfer and laundering of millions of dollars on behalf of Prince Group from over 250 victims in New York and across the country.
Prince Group carried out these schemes by trafficking hundreds of workers and forcing them to work in compounds in Cambodia and execute the scams, often under the threat of violence. The compounds housed vast dormitories surrounded by high walls and barbed wire, and functioned as violent forced labour camps.
The defendant was directly involved in managing the scam compounds and maintained records associated with each one, including ledgers that tracked profits and identified which fraudulent schemes were run out of which rooms. The defendant also maintained documents describing and depicting “phone farms” at the compounds: automated call centres that used thousands of phones and millions of mobile telephone numbers to facilitate the various fraudulent schemes.
The defendant was directly involved in using violence against the individuals within the forced labour camps and possessed images of Prince Group’s violent methods, including photographs depicting beatings and other methods of torture. The defendant communicated directly with his subordinates about beating individuals who “caused trouble,” in one case specifying that the victims should not be “beaten to death.”
In furtherance of these schemes, the defendant and a close network of Prince Group’s top executives utilised their political influence in multiple foreign countries to protect their criminal enterprise, paying bribes to public officials to avoid disruption by law enforcement. They subsequently laundered the proceeds of the fraudulent schemes through professional money laundering operations and through Prince Group’s own network of ostensibly legal business enterprises, including its online gambling and cryptocurrency mining operations.
At the defendant’s direction, Prince Group associates used sophisticated cryptocurrency laundering techniques to obscure the source of fraudulent Prince Group profits, including “spraying” and “funnelling” techniques in which large volumes of cryptocurrency were repeatedly disaggregated across scores of virtual currency addresses and then re-consolidated into fewer addresses to obscure the source of the funds.
Some of these criminal proceeds were ultimately held in wallets at cryptocurrency exchanges or exchanged for traditional currency and stored in traditional bank accounts. Other criminal proceeds included the defendant’s cryptocurrency, which was stored in unhosted cryptocurrency wallets that the defendant personally controlled.
The defendant maintained diagrams recording the process by which some of the defendant’s cryptocurrency was laundered. The defendant boasted to others about Prince Group’s mining businesses, stating that “the profit is considerable because there is no cost” — that is, unlike legitimate enterprises, the operating capital for the cryptocurrency mining businesses consisted of money stolen from Prince Group’s numerous victims.
The defendant and his co-conspirators subsequently used some of the criminal proceeds for luxury travel and entertainment, as well as to make extravagant purchases, including watches, yachts, private jets, vacation homes, high-end collectables, and rare artwork, such as a Picasso painting purchased through an auction house in New York City.
If convicted, the defendant faces a maximum penalty of 40 years in prison.
Additionally, the Department of the Treasury designated the Prince Group as a transnational criminal organisation on October 14. It announced sanctions against the defendant and multiple associated individuals and entities for their roles in illicit activity. The United Kingdom’s Foreign, Commonwealth and Development Office also announced sanctions.
You can learn more about cryptocurrency investment fraud here.
