By: Toh Han Shih

More assets are expected to be seized in the wake of the largest forfeiture action in the history of the US Department of Justice, involving a “pig butchering” online scam allegedly operated by a Cambodian conglomerate, Prince Holding Group, and its founding chairman, Vincent Chen Zhi.

US prosecutors allege Chen and his co-conspirators bribed officials of various countries, including Chinese spies and police officials. So far, US authorities have seized US$15 billion of bitcoin in the case, which is linked to multiple jurisdictions, including Singapore, Hong Kong, and Taiwan.

The case constitutes a growing recognition of the nature of the cybercrime threat from Cambodia, which is reckoned to cost Americans up to US$10 billion annually and produces hundreds of thousands of human trafficking victims who are lured to compounds where they are forced into “pig butchering” scams against people across the world, particularly in the US, China, and the EU. Law enforcement officials term it the fastest-growing form of financial crime.

“More assets will be frozen. Western law enforcement will look at the main component, but also look at their connections,” Matthew Friedman, CEO of the Mekong Club, a Hong Kong-based nongovernmental organization which campaigns against human trafficking, told Asia Sentinel.

“What you will see is the Western law enforcement identifying the links of the Prince Holding Group and the determination of how these links will get unraveled. Then you will see the freezing of more assets.”

“You can be sure the US and UK governments are already looking at the vast network associated with the Prince Holding Group. Investigators of the US and UK won’t stop at the head of the snake. They will look at the entire network,” he added.

An indictment was unsealed on October 14 in a US court charging Chen with wire fraud and money laundering conspiracy for directing Prince Holding Group’s operation of forced-labor scam compounds across Cambodia, the US Justice Department announced on the same day.

The US Attorney’s Office for the Eastern District of New York and the US Justice Department’s National Security Division also filed on October 14 a civil forfeiture complaint against bitcoin currently worth approximately US$15 billion, which are proceeds of Chen’s fraud and money laundering, the US Justice Department revealed. The US$15 billion of bitcoin is in the custody of the US government, said the US Justice Department.

In connection with this case, the US Treasury has sanctioned 18 individuals and 128 companies, including those of Singapore, Hong Kong, Taiwan, and Cambodia, the US Treasury announced on October 14. The sanctioned individuals include three Singapore citizens and six Chinese citizens.

“We will be looking closely to see how this can be an example to other jurisdictions. In particular, Hong Kong, being a key hub for relevant financial transactions, would be able to glean from this experience well,” said Patricia Ho, the founder of Hong Kong Dignity Institute, which supports the vulnerable in Hong Kong, including victims of human trafficking, told Asia Sentinel. “Importantly, other jurisdictions will also have to take action to prevent the masterminds from simply shifting locations. We are fortunately seeing widespread action taking place in China as well, so I do have hope that collectively we will see some closures.”

Alongside the US government, the UK on October 14 sanctioned a network that operates illegal scam centers across Southeast Asia, the UK government announced on the same day. The leader of the network, Chen, and his web of enablers have incorporated their businesses in the British Virgin Islands and invested in London property, including a £12 million mansion, a £100 million office building, and 17 flats, the UK government disclosed.

The entities targeted by the UK include Chen, a UK citizen, the Prince Holding Group, Jin Bei Group (a leisure and entertainment business linked to the Prince Holding Group, whose properties include a hotel and casino in the Cambodian tourist hub of Sihanoukville, as well as multiple scam centers), Golden Fortune Resorts World (a company behind a scam compound on the outskirts of Phnom Penh, under the guise of a technology park), and Byex Exchange (a cryptocurrency platform).

US authorities are hunting for the 37-year-old Chen. Born in mainland China, he holds passports from China, Cambodia, Vanuatu, the UK, St. Lucia, and Cyprus, and resided in Cambodia, Singapore, Taiwan, and the UK, according to the US Justice Department. If convicted, Chen faces a maximum of 40 years in prison in the US.

“Pig-butchering” schemes (sha zhu pan in Mandarin) are online investment fraud schemes in which the culprits contact victims through social media and convince them to transfer funds to specified accounts based on false promises that the funds would be invested and generate profits. Such scams involve the perpetrators gaining the victims’ trust, earning them the nickname of “pig-butchering”.

The Prince Holding Group carried out these schemes by trafficking hundreds of workers and forcing them to work in compounds in Cambodia and execute the scams, often under the threat of violence, said the US Justice Department. Chen was directly involved in managing the scam compounds and maintained records associated with each one, the US Justice Department alleged.

Accusations of bribing Chinese spies and police

Chen and his co-conspirators used their political influence to protect their scam operations from law enforcement in multiple countries, including the Chinese Ministry of Public Security (”MPS”), China’s police agency, and the Ministry of State Security (”MSS”), a Chinese intelligence organ, alleged the complaint. Prince Holding Group executives bribed public officials for information in advance of law enforcement raids of Prince Holding Group scam compounds, the complaint alleged. “Chen also boasted to others of his arrangements with the MSS to be informed of law enforcement actions in exchange for bribe payments.”

Chen enlisted an unnamed co-conspirator to engage in corrupt bargaining with foreign law enforcement officials, alleged the complaint. This co-conspirator was a citizen of Cambodia and Cyprus and resided in Singapore and the US, according to the complaint.

In May 2023, this co-conspirator communicated with an MPS official who stated that he could get Prince Holding Group associates “off the hook” in return for which the co-conspirator offered to “take care of” the Chinese official’s son, alleged the complaint. In July 2023, the co-conspirator directed a Chinese law enforcement official to have Cambodian police extort businesses on behalf of Prince Holding Group, the complaint alleged.

Chen maintained ledgers of bribes to public officials, the complaint alleged. The ledger indicated, for example, that in 2019, the co-conspirator purchased a yacht for a senior official of an unnamed foreign government worth more than US$3 million, alleged the complaint. Chen also purchased luxury watches worth millions of US dollars for another senior foreign government official, who in 2020 helped Chen obtain a diplomatic passport that Chen used to travel to the US, the complaint alleged.

Chen was formerly an adviser to Hun Sen when the latter was the Cambodian Prime Minister, and is presently an advisor to the current Cambodian Prime Minister, Hun Sen’s son Hun Manet. The US Justice Department has not alleged Hun Sen or Hun Manet took bribes from Chen.

“There has been bribery in Cambodia of government officials in relation to the scam centers there. The answer is an absolute yes,” said Friedman without referring to Hun Sen or Hun Manet.

“It is not surprising that Chen Zhi and other Prince Holding Group top executives used their political influence in multiple foreign countries to protect their criminal enterprise and paid bribes to public officials to avoid disruption by law enforcement. The scam centers in Myanmar, Cambodia, and Laos have been working together,” Friedman added.

“What we have seen in criminal organizations is there is a lot more sharing of information, because these organizations are flush with cash. The Prince Holding Group has lots of crypto assets which need to be converted to fiat currency. They are looking for mechanisms to convert crypto to fiat as well as launder money, which is why scam centers in Myanmar, Cambodia, and Laos are collaborating,” Friedman explained.

Efforts to reach the Prince Holding Group were unsuccessful. The company’s media contact email and enquiry email were not functioning. On October 15, the website of the Prince Holding Group contained statements rebutting media articles which accused the company of impropriety. Those rebuttal statements were removed by the next day.

Toh Han Shih is a Singaporean writer in Hong Kong and a regular contributor to Asia Sentinel

Asia Sentinel

US $15 Billion Crackdown on Cambodian Scams