International Business Conglomerate Leader Indicted for $15 Billion Cryptocurrency Scheme

Strategic Insights -

Prosecutors in Brooklyn unsealed wire fraud and money laundering conspiracy charges against Chen Zhi, the head of Prince Holding Group, a global corporation with operations in 30 countries. The alleged scheme involved forced labor camps in Cambodia, where workers were beaten to encourage efficiency and compliance. Chen is believed to be in Cambodia and faces up to 40 years in prison if convicted. The indictment alleges that Prince Group targeted victims through social media applications, persuading them to send cryptocurrency under the guise of investment and profits.

Key Takeaways:

  • Chen Zhi, the head of Prince Holding Group, was indicted for his role in a $15 billion cryptocurrency scheme that involved forced labor camps in Cambodia.
  • The scheme involved beating workers to encourage efficiency and compliance, with Chen authorizing a worker's beating and warning his associate to avoid killing the person.
  • The operation had an arm in Brooklyn, where $18 million was transferred and laundered for Prince Group from 250 local victims and elsewhere in the US between May 2021 and August 2022.
  • Prosecutors said the scheme was sophisticated, using recordkeeping and automated call centers with thousands of phones, and targeted victims through social media applications.
  • Victims were duped into investing through psychological manipulation, with the scheme described as a "pig-butchering" crypto investment scam.
  • The U.S. government seized $15 billion in bitcoin allegedly related to the fraud, and prosecutors are seeking a forfeiture order to take possession of it.
  • Chen and his co-conspirators spent stolen funds on luxury expenses, including yachts, private jets, and a Picasso painting from an auction house in New York.
  • Thousands of workers were trafficked and forced to work in scam compounds, often under the threat of violence, with at least 10 compounds existing in Cambodia.
  • Facilities containing 1,250 mobile phones that ran 76,000 social media accounts helped fuel the illicit enterprise.

Statistics:

  • $15 billion: the alleged amount of cryptocurrency involved in the scheme.
  • $18 million: the amount of money transferred and laundered for Prince Group in Brooklyn from 250 local victims and elsewhere in the US between May 2021 and August 2022.
  • 30 countries: the number of countries where Prince Holding Group operates.
  • 1,250: the number of mobile phones found in facilities fueling the illicit enterprise.
  • 76,000: the number of social media accounts run by the mobile phones.
  • 10: the number of compounds in Cambodia where workers were held in dormitories and forced to work in scam compounds.
  • Up to 40 years: the possible prison sentence for Chen if convicted.

Sources:

  • U.S. Attorney's Office for the Eastern District of New York
  • Joseph Nocella Jr., U.S. Attorney in Brooklyn
  • Prosecutors in Brooklyn
  • Court documents
  • Google account of Chen Zhi