The US Treasury and the British government have been praised by crime investigators after moving this week to sanction a notorious company in Cambodia accused of running large-scale scam centres.
The US Department of Justice (DoJ) announced on Tuesday that it had filed its largest-ever forfeiture action to seize approximately $15 billion worth of bitcoin currently in US custody. Properties worth $172 million were also reportedly seized in Britain.
The DoJ said an indictment unsealed in a federal court in New York accused Chen Zhi, a 37-year-old Chinese-Cambodian tycoon who founded and chaired the Prince Group, of being involved in wire fraud, money laundering, and directing the group’s “operation of forced-labour scam compounds across Cambodia.”
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It said people were held against their will in the compounds engaged in cryptocurrency investment fraud schemes known as “pig butchering” scams and that they stole billions of dollars from victims in the United States and around the world.”
“The rapid rise of transnational fraud has cost American citizens billions of dollars, with life savings wiped out in minutes,” said Secretary of the Treasury Scott Bessent in a statement about the move.
Chen Zhi is yet to be arrested or comment on the latest actions, which saw the US impose sanctions on 146 entities and individuals linked to the Phnom Penh-based Prince Group.
US ramping up response
Ten other Cambodian casinos and suspected operators of scam hubs were sanctioned last month, and a bill (the Dismantle Foreign Scam Syndicates Act) was introduced in the US Congress to create an anti-scam taskforce, with the aim of targeting syndicates in Southeast Asia said to be holding 150,000 people from dozens of countries and stealing up to $19 billion a year – more than half of that from US citizens.
Early this month, Cambodia was labelled a ‘state sponsor’ of human trafficking by the US State Department, because of allegations senior officials had benefitted from the revenue reaped by the hundreds of scam centres now said to operate in the country.
Jacob Sims, a Harvard Fellow and analyst who launched a report on Southeast Asia’s scam hubs earlier this year, said the money ‘frozen’ in the latest seizures “could grow substantially” as more measures are taken and criminal groups find it harder to launder illicit profits and turn them into ‘respectable’ assets.
In the announcements on Tuesday, British and US officials said ‘scam centres’ operated by the multinational Prince Group used trafficked workers lured by fake job advertisements, then forced to defraud victims around the world, under threat of torture.
That included luring victims into fake romantic relationships before persuading them to invest large sums into fraudulent cryptocurrency platforms.
“The masterminds behind these horrific scam centres are ruining the lives of vulnerable people and buying up London homes to store their money,” British foreign minister Yvette Cooper said.
The US Treasury said it had taken what it described as the largest action ever in Southeast Asia, targeting 146 people within the Prince Group, which Britain also sanctioned.
Britain’s sanctions targeted six entities and six individuals, including Chen Zhi, who the US and UK accused of having overseen the construction of compounds used for online scams.
Chen, 37, was indicted on October 8 in a Brooklyn federal court on charges of wire fraud conspiracy and money laundering conspiracy, according to court papers made public on Tuesday.
US prosecutors said Chen and his associates ran forced-labour camps where people were held against their will to carry out cryptocurrency investment fraud schemes. They allegedly laundered the funds through online gambling and cryptocurrency mining companies.
Prosecutors said they had seized around 127,271 bitcoin – or $14.2 billion – in funds traceable from the crimes. They were now seeking court approval to take permanent custody of the bitcoin, in what they said was the largest forfeiture action in Department of Justice history.
Prince Group and Chen did not immediately respond to a request for comment.
- Jim Pollard with Reuters
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