The Department of Justice (DOJ) today announced a civil forfeiture action against Chen Zhi, the founder and chairman of the Prince Holding Group, for approximately $15 billion in Bitcoin, currently held in U.S. custody.
This seizure is the largest in the Department’s history. It is linked to a sprawling transnational criminal enterprise that allegedly operated forced-labor compounds in Cambodia to run massive cryptocurrency investment fraud schemes.
Mastermind of the Cyber-Fraud
According to the official announcement, Chen Zhi was the alleged “mastermind” behind a sophisticated cyber-fraud empire built on human suffering. The indictment states that since approximately 2015, the Prince Group has allegedly utilized its corporate structure to traffic hundreds of workers into forced-labor camps in Cambodia.
Individuals held against their will in these high-security compounds were allegedly forced to execute what are known as “pig butchering” cryptocurrency investment fraud scams.
These scams involved perpetrators building long-term, trusting relationships with victims, often through messaging or social media, before convincing them to transfer cryptocurrency into fraudulent investment accounts.
Ultimately, the victims’ funds were stolen, resulting in billions of dollars in losses from individuals in the United States and around the world. The workers in the compounds were forced to perpetrate the fraud, often under the threat of violence.
Cryptocurrency Forfeiture
The civil forfeiture complaint targets approximately 127,271 Bitcoin worth about $15 billion, which the DOJ has identified as the proceeds and instrumentalities of Chen Zhi’s fraudulent operations.
To get the source of the illicit profits, Prince Group associates allegedly used cryptocurrency laundering techniques, like “spraying” and “funneling” repeatedly moving large volumes of cryptocurrency across numerous virtual currency wallets.
“This indictment and historic forfeiture, the largest in Department history, reflect our commitment to using every tool at our disposal to ensure such crimes do not pay,” said a spokesperson for the U.S. Attorney’s Office for the Eastern District of New York.
In a parallel action, the Department of the Treasury designated the Prince Group as a transnational criminal organization and announced sanctions against Chen Zhi and several associated individuals and entities for their roles in the illicit activity.
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