Federal prosecutors have executed a monumental seizure of $15 billion in cryptocurrency linked to an elaborate investment scam known as “pig butchering,” which is said to have originated from forced labor camps in Cambodia. This operation marks the largest forfeiture action in the history of the U.S. Justice Department.
On Tuesday, authorities unveiled an indictment against Chen Zhi, a Chinese émigré and head of the Prince Group, one of Cambodia’s largest conglomerates, charging him with conspiracy related to money laundering and wire fraud. Currently, Chen is at large and remains a significant focus of the investigation.
In conjunction with these developments, the Treasury Department has imposed sanctions on numerous affiliates of the Prince Group, designating them as criminal organizations. This intensified crackdown is in response to the alarming rise of “pig butchering” scams, which have cost Americans millions as they lure victims into fraudulent cryptocurrency investments.
Prosecutors allege that under Chen’s direction, the Prince Group has evolved into one of Asia’s leading transnational criminal organizations. They claim that illicit funds generated from the scams have been funneled into extravagant purchases, including yachts, private jets, and even a Picasso painting through a New York auction house.
Law enforcement seized an astonishing 127,271 bitcoin, currently valued at around $15 billion, and emphasized this figure as groundbreaking in scale. Christopher Raia, assistant director of the FBI’s New York field office, highlighted the agency’s commitment to tackling these vast schemes, noting the challenge that comes with addressing such rampant criminal activity. He reiterated that the FBI’s strategy involves targeting the most significant cases to dismantle operations at their core.
The tactics employed by Chen and his co-conspirators included running at least ten forced labor camps since 2015, which were converted into automated call centers for cryptocurrency investment schemes. These facilities reportedly housed 1,250 mobile phones, managing a staggering 76,000 social media accounts. Workers were instructed on how to create genuine connections with potential victims while adhering to tactics that made interactions appear more authentic.
Victims were often enticed through messaging apps and social media, initially posing as innocuous contacts. Following weeks of interaction designed to build trust, victims would be invited to invest, leading to significant financial losses when scammers claimed profits that were never real. Notably, the indictment reveals that a former co-conspirator bragged of generating more than $30 million daily from fraudulent activities as early as 2018.
Additionally, there are serious allegations that physical violence was used to control laborers at these camps. The indictment details how Chen and his associates employed bribery tactics to evade law enforcement scrutiny, maintaining ledgers of payments made to officials in various countries. This included a multi-million dollar yacht purchased for a foreign government official.
The recent cryptocurrency seizure shatters the previous record held by a $225 million seizure announced by the Justice Department in June. In light of this crackdown, authorities are amplifying efforts to alert the public about the perils of cryptocurrency investment scams, which can devastate lives. One heartbreaking case involved an elderly American who tragically took his life after losing his entire savings to scammers.
Authorities emphasize that many of these scams are orchestrated from extensive networks in Southeast Asia, with some operations traced back to large compounds along the Myanmar-Thailand border. As online investment schemes continue to flourish, Raia urges potential victims to exercise caution and to report any suspicions to the FBI, stressing the importance of verifying the authenticity of online interactions before making financial decisions.