NEW YORK (AP) — The U.S. government has seized more than $14 billion in bitcoin and charged the founder of a Cambodian conglomerate in a massive cryptocurrency scam, accusing him and unnamed co-conspirators of exploiting forced labor to dupe would-be investors and using the proceeds to purchase yachts, jets and a Picasso painting.
In an indictment unsealed Tuesday, Brooklyn federal prosecutors charged Prince Holding Group chairman Chen Zhi with wire fraud conspiracy and money laundering conspiracy. At the same time, U.S. and British authorities imposed sanctions on Chen's company, which is involved in real estate development and financial services, and the Treasury Department declared it a transnational criminal organization.
Chen, 38, is accused of sanctioning violence against workers, authorizing bribes to foreign officials and using his other businesses, such as online gambling and cryptocurrency mining, to launder illicit profits.
Chen was the “mastermind behind a sprawling cyberfraud empire," Assistant Attorney General John Eisenberg said. U.S. Attorney Joseph Nocella called it “one of the largest investment fraud operations in history.”
At one point, prosecutors said, Chen bragged that the so-called “pig butchering” scam was pulling in $30 million a day.
Last year, Americans lost at least $10 billion to Southeast Asia-based scams, a 66% increase from 2023, the Treasury Department said, calling Prince Holding Group a “dominant player” in that space. Chinese authorities have been investigating the company for cyber scams and money laundering since as early as 2020, according to court records reviewed by the U.S. Institute of Peace.
Chen, a native of China who is also known as “Vincent,” remained at large as of Tuesday, prosecutors said. If convicted, he faces up to 40 years in prison. If a court allows, the U.S. could use the 127,271 bitcoins it seized to repay victims. The value of the coins — currently around $113,000 each — will continue to fluctuate in the meantime.
Messages seeking comment were left for Prince Holding Group spokesperson Gabriel Tan. The company’s website says it “adheres to global business standards.” A spokesperson for the Cambodian government, Pen Bona, did not immediately respond to a request for comment.
Jacob Daniel Sims, a transnational crime expert and visiting fellow at Harvard University’s Asia Center, said that Prince Holding Group is “an essential part of the scaffolding that makes global cyber-scamming possible," and Chen is a “central pillar” of the criminal economy intertwined with Cambodia’s ruling regime.
Chen has served as an adviser to Prime Minister Hun Manet and his father, former Prime Minister Hun Sen, and was honored with the title “neak oknha” — equivalent to an English lord.
“While the indictment and sanctions don’t instantly dismantle these networks, they fundamentally change the risk calculus,” Sims said. They make "every global bank, real estate firm and investor think twice before touching Cambodian elite money.”
Last year, the U.S. and U.K. imposed sanctions on Ly Yong Phat, one of Cambodia’s richest men and a leading member of the ruling Cambodian People’s Party, after he was implicated in allegations of forced labor, human trafficking and online scams.
According to Chen’s indictment, Prince Holding Group built at least 10 compounds in Cambodia where workers — often migrants held against their will — were forced to contact thousands of victims through social media or online messaging platforms, build rapport and entice them to transfer cryptocurrency with hopes of big investment returns.
In reality, prosecutors said, it was a swindle. The money, they said, was funneled into other Prince Holding Group businesses and shell companies and used to pay for things like luxury travel and entertainment, watches, vacation homes, rare artwork and even a Rolex watch for an executive’s spouse.
One victim was scammed out of more than $400,000 in cryptocurrency, prosecutors said.
The compounds functioned as forced labor camps, with dormitories surrounded by high walls and barbed wire fences, and automated call centers with hundreds of mobile phones lined up on racks controlling tens of thousands of fake social media profiles, prosecutors said. One compound was associated with Prince Holding Group's Jinbei Casino Hotel. Another was known as “Golden Fortune.”
According to the Treasury Department's sanctions statement, workers at the compounds were held captive, isolated and sometimes beaten after being lured with the promise of high-paying jobs in fields such as customer service or tech support.
Photographs included in Chen’s indictment showed a man with a bloody gash on his face, dozens of men on the ground with their hands bound, and a man with red lash marks on his chest and arms.
Chen personally approved of at least one beating, of a man believed to be causing trouble at a compound, but cautioned that he not be “beaten to death.” People reported seeing workers who escaped Golden Fortune being “beaten until they are barely alive," the Treasury Department said.
In 2023, the United Nations estimated around 100,000 people were being forced to carry out online scams in Cambodia, as well as at least 120,000 in Myanmar and tens of thousands in Thailand, Laos and the Philippines.
“These actions won’t end the scam economy overnight," Sims said. "But they shrink its oxygen supply and send a rare message to regimes like Cambodia’s that elite crime as a ruling strategy is a double-edged sword."
Brook reported from New Orleans.
FILE - This April 3, 2013, file photo shows bitcoin tokens in Sandy, Utah. (AP Photo/Rick Bowmer, File)
