U.S. federal prosecutors seized cryptocurrency worth about $15 billion as part of an investigation into an investment scheme known as pig-butchering, or “pig feeding,” linked to forced labor in Cambodian camps.
The Department of Justice said it was the largest seizure in the department’s history.
Prosecutors charged Chen Zhi, a Chinese immigrant who holds multiple passports and built Prince Group – one of Cambodia’s largest conglomerates – with conspiracy to launder funds and conspiracy relating to interstate electronic transfers.
Chen remains at large.
As part of a related initiative, the Department of the Treasury sanctioned dozens of Prince Group affiliated entities and designated them as criminal organizations.
Crackdown on pig-butchering schemes and investigation details
The investigation comes amid a rise in pig-butchering scams that have cost U.S. citizens millions of dollars in losses.
Prosecutors say Chen transformed Prince Group into one of the largest cross-border criminal networks in Asia. According to the investigation, they used stolen funds to buy yachts, private jets, and even a Picasso painting through a New York auction house.
According to the investigation, 127,271 bitcoin were seized, held in the United States, and their current value is about $15 billion.
This is one of the largest pig-butchering schemes they have investigated.
– CNN
Christopher Raya, the FBI’s deputy director in New York, noted that this is among the largest disclosed schemes of this kind. He said there are many such cases, but the FBI focuses on the largest ones to stop the harm.
This is somewhat like crossing the road outside a crosswalk.
– CNN
The FBI focuses on the biggest cases to “cut off the head of the snake.”
– CNN
According to the investigation, between 2015 and 2019 Chen and his associates operated in at least ten forced-labor camps across Cambodia to promote crypto investment schemes. They allegedly laundered money through business platforms and bribed officials to avoid investigations.
The charges indicate that the camps, with high walls and barbed wire, became “fronts” for call centers with thousands of mobile devices that controlled hundreds of thousands of social media accounts.
According to the investigation, people were recruited via messaging apps and social networks, sometimes masking an incorrect number to initiate contact. Workers were trained to maintain trust with potential victims, including by using photos of women who were not “too beautiful” so that the accounts looked authentic.
Subsequently, the victim was invited to invest and transferred funds through virtual currencies. Sometimes the attackers staged emergencies or arranged romance scams to lure money.
After the funds were “transferred,” the scammers claimed it was an investment, showed fake profits, and continued to increase the investment. Ultimately, when the money disappeared, the perpetrators cut off all contact with the victim.
According to the indictment, in 2018 Prince Group earned more than $30 million per day through the fraudulent schemes, and one of Chen’s accomplices boasted about these figures.
It is also alleged that physical violence was used in the camps to maintain discipline among workers.
According to the investigation, Chen and his associates bribed officials in China and other countries to stay one step ahead of investigations and raids on forced camps. The indictment states that in 2019 a yacht worth $3 million was purchased for a high-ranking official of a foreign state.
It is also noted that the $15 billion seizure significantly exceeds the previous record of $225 million announced by the Department of Justice in June.
Officials urge citizens to be cautious about investing in cryptocurrency: such schemes can wreck the lives of people and their loved ones. CNN also reported that some fraud networks originate in Southeast Asia and have ties to major deals on the border between Myanmar and Thailand.
Raya urges people to contact the FBI if they have been taken advantage of or believe they are a victim, as warnings and vigilance are the most important steps in fighting crypto fraud. He emphasized: in the modern world of social networks and the Internet, solutions are not always found through arrests, because the problem must be cracked by the “head of the snake.”
The substantive work on the material was carried out with the participation of journalists from international editions, and the piece provides a detailed picture of how large-scale cryptocurrency-based financial schemes unfold abroad and what consequences they have for people and international security.