The U.S. government has taken significant action against a Cambodian conglomerate accused of running a large-scale cryptocurrency fraud scheme, seizing over $14 billion in bitcoin and charging its founder with serious crimes. Chen Zhi, chairman of Prince Holding Group, along with unnamed co-conspirators, has been implicated in a scam that allegedly exploited forced labor to mislead potential investors, using the proceeds to fund lavish purchases such as yachts, private jets, and even a Picasso painting. The indictment, revealed on Tuesday, outlines charges of wire fraud conspiracy and money laundering against Chen, who is now facing severe penalties.
### Allegations of Exploitation and Financial Misconduct
In conjunction with the charges, U.S. and British authorities have imposed sanctions on Chen’s company, which is engaged in various sectors, including real estate and financial services. The U.S. Treasury Department has classified Prince Holding Group as a transnational criminal organization. Chen, 38, is accused of authorizing violence against workers, paying off foreign officials, and using other business ventures, such as online gambling and cryptocurrency mining, to launder the proceeds from these illegal activities. Assistant Attorney General John Eisenberg described Chen as the “mastermind behind a sprawling cyber-fraud empire,” while U.S. Attorney Joseph Nocella labeled it “one of the largest investment fraud operations in history.” Prosecutors claim that Chen boasted about the “pig butchering” scheme, which allegedly generated up to $30 million each day.
### Growing Concerns Over Southeast Asian Scams
Authorities note that last year alone, Americans were defrauded of at least $10 billion due to scams originating from Southeast Asia, representing a 66% increase from the previous year. The Treasury Department identified Prince Holding Group as a key player in this fraudulent landscape. Reports indicate that Chinese officials have been investigating the firm for cyber-related fraud and money laundering since 2020. As of Tuesday, Chen, who is originally from China and is also known as “Vincent,” remains at large. Should he be found guilty, he faces a potential prison sentence of up to 40 years. If permitted by the court, the U.S. may use the 127,271 bitcoins it has seized to compensate victims, although the coins’ value, currently around $113,000 each, is subject to change.
### Insights from Experts on the Impact of Sanctions
Jacob Daniel Sims, an expert on transnational crime and a visiting fellow at Harvard University’s Asia Center, commented on the role of Prince Holding Group in enabling global cyber scams, describing Chen as a “central pillar” of a criminal economy closely linked to Cambodia’s ruling regime. Chen has previously served as an adviser to Prime Minister Hun Manet and his father, former Prime Minister Hun Sen, earning the title “neak oknha,” akin to a lord in English nobility. Sims remarked that although the indictment and sanctions won’t immediately dismantle these networks, they significantly alter the risk landscape, prompting global financial institutions and investors to reconsider their dealings with Cambodian elites.
### Details of Forced Labor and Abuse in the Scheme
According to the indictment, Prince Holding Group operated at least ten facilities in Cambodia where workers, often migrants held against their will, were compelled to engage with thousands of potential victims through social media and messaging apps. The workers were led to believe they were offering lucrative investment opportunities, while prosecutors assert that it was merely a scam designed to siphon off funds. The stolen money was funneled into other business ventures and used for extravagant expenditures such as luxury vacations, high-end watches, and even rare artwork. One victim reportedly lost over $400,000 in cryptocurrency due to the scheme.
### Conditions of Labor Camps and Human Rights Violations
The facilities described in the indictment operated like forced labor camps, with dormitories enclosed by high walls and barbed wire, and automated call centers equipped with numerous mobile phones to manage fake social media accounts. One notable compound was linked with the Jinbei Casino Hotel, while another was dubbed “Golden Fortune.” The Treasury Department’s sanctions report indicated that laborers at these sites were kept in captivity, isolated, and sometimes subjected to beatings after being lured with promises of high-paying job opportunities. Graphic evidence included in the indictment featured images of individuals with severe injuries and evidence of torture. Chen was reportedly involved in authorizing at least one instance of violence against a worker he believed was causing issues, instructing that the individual should not be “beaten to death.” Eyewitness accounts from escaped workers painted a harrowing picture of abuse, with reports of individuals being beaten “until they are barely alive.”
### The Broader Context of Forced Labor in Southeast Asia
In 2023, the United Nations estimated that approximately 100,000 individuals were being exploited for online scams in Cambodia, alongside around 120,000 in Myanmar, with additional thousands in Thailand, Laos, and the Philippines. Sims noted that while these actions may not instantly eradicate the scam economy, they do significantly limit its resources and send a crucial warning to regimes like Cambodia’s: that relying on elite crime as a governance strategy can be perilous.
