The United States government has seized more than $14 billion (£10.5bn) in bitcoin and charged the founder of a Cambodian business empire, the Prince Group, with allegedly masterminding a massive cryptocurrency scam, which involved forced labour camps.
UK and Cambodian national Chen Zhi was charged on Tuesday in New York for allegedly engaging in a wire-fraud conspiracy and money laundering scheme.
Chen’s businesses were also sanctioned by the US and the UK as part of a joint operation.
The UK government said it has frozen assets owned by his network, including 19 properties in London, one of which is worth nearly £100 million ($133m).
US prosecutors said it was one of the biggest financial takedowns in history and the largest ever seizure of bitcoin, with approximately 127,271 bitcoins being held by the US government.
Chen, who remains at large, is accused of being the mastermind behind a “sprawling cyber-fraud empire” operating under his multi-national company, the Prince Group, said the US Department of Justice (DOJ).
The Cambodia-based group’s website said its businesses include property development and financial and consumer services.
But the DOJ alleges that it runs one of Asia’s largest transnational criminal organisations.
Unwitting victims were contacted online and convinced to transfer cryptocurrency based on false promises that the funds would be invested and generate profits, the DOJ said.
Prosecutors alleged that the company, under Chen’s direction, built and operated at least 10 scam compounds throughout Cambodia, according to court documents seen by the BBC.
Chen was accused of managing the compounds that were specially designed to reach as many victims as possible, said prosecutors.
His accomplices allegedly procured millions of mobile phone numbers and set up “phone farms” to conduct call centre scams, according to the court documents, dated October 8.
Two of these facilities had 1,250 mobile phones that controlled around 76,000 social media accounts for scams, the documents said.
Prosecutors said Prince Group documents included tips on building rapport with victims, advising workers not to use profile photos of women who were “too beautiful” so that the accounts would look more genuine.
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Assistant Attorney General for National Security John Eisenberg described the Prince Group as a “criminal enterprise built on human suffering”.
It also trafficked workers, who were confined in prison-like compounds and forced to carry out scams online, targeting thousands of victims worldwide, he said.
Chen and his accomplices allegedly used the criminal proceeds for luxury travel and entertainment, said the DOJ.
They also made “extravagant” purchases, like wristwatches, private jets, and rare artworks, including a Picasso painting purchased from a New York City auction house, the department said.
If convicted, Chen faces a maximum penalty of 40 years in jail.
