Washington and London this week announced their largest-ever financial crime crackdown, seizing over US$15 billion in bitcoin, issuing indictments, and imposing sanctions on the Chinese-born Cambodian businessman, and Prince Holding Group.
 |
|
Chen Zhi, founder and chairman of Prince Holding Group. Photo courtesy of Prince Holding Group |
The two governments claimed that Chen and his conglomerate operate a transnational “criminal empire” involving online investment scams targeting U.S. citizens and others worldwide.
In response, Cambodia’s Ministry of Interior stated that Prince Group “meets all legal requirements” to operate in the country, but Cambodia would cooperate with investigations if presented with clear evidence.
Citizenship controversy
Chen, 37, born in Fujian Province, China, holds dual Chinese and Cambodian citizenship, along with passports from Vanuatu and Cyprus, according to the international sanctions profile by the U.S. Treasury’s Office of Foreign Assets Control.
His citizenship, however, is controversial. Several reports in U.K. and U.S. media describe Chen as holding dual British-Cambodian citizenship, having renounced his Chinese citizenship after moving to Cambodia for business.
Chen began his career in the Chinese southeastern province of Fujian, with a modest Internet cafe. In 2011, he entered Cambodia’s real estate market and established a company in Phnom Penh.
Chen was granted Cambodian citizenship in 2014. A year later, Chen founded Prince Holding Group, which grew rapidly.
Cambodian Ministry of Interior spokesperson Touch Sokhak said on Wednesday that his citizenship approval was “fully compliant with the law.”
Prince Holding Group played a significant role in transforming the port city of Sihanoukville into a casino hub.
The conglomerate owns a network of apartments and hotels in the city, later expanding into condominiums, supermarkets, and shopping malls. It also holds licenses to operate in banking and finance.
Searches for Chen Zhi on Khmer Times yield numerous articles highlighting his positive contributions to community programs in Cambodia, particularly during the Covid-19 pandemic.
He established a charitable foundation and scholarship program in his name, in collaboration with the Ministry of Education, and has been repeatedly honored in the country’s prominent entrepreneur awards.
The Prince Group website describes Chen as as someone with vision and leadership who “transformed Prince Group into a leading business group in Cambodia that adheres to international standards.”
The empire’s shadow
Chen and his associates face charges of online fraud and money laundering, according to an indictment in a New York federal court.
U.S. prosecutors allege that Chen orchestrated the establishment of at least 10 “scam centers” in Cambodia.
Court documents indicate that Chen’s network used cryptocurrency as a cornerstone for global fraud and money laundering operations.
Subordinates under Chen reportedly contacted victims through messaging apps or social media, posing as investment experts or trusted acquaintances.
After building rapport, they persuaded victims to transfer cryptocurrency into high-return investment digital wallets.
In reality, the funds were misappropriated and funneled through numerous anonymous accounts to launder them for the organization’s benefit.
To sustain large-scale operations, Prince Holding Group allegedly engaged in human trafficking and forced labor within enclosed compounds in Cambodia.
These facilities, surrounded by high walls and barbed wire, housed workers under surveillance and coerced them into conducting online scams.
Chen is accused of “directly managing and keeping detailed records” of each compound, from profit ledgers to lists of scam tactics used in specific rooms.
Prosecutors also allege that Chen instructed subordinates to use violence against dissenters, with one message reportedly directing them to beat the victims but do not let them be “beaten to death,” according to the U.S. Department of Justice.
Chen’s groups purchased millions of phone numbers and set up “phone farms” with thousands of devices and social media accounts to execute scams.
Two facilities were found to contain 1,250 phones controlling approximately 76,000 accounts, according to the BBC.
Prosecutors said Prince Group documents included tips on building rapport with victims, advising workers not to use profile photos of women who were “too beautiful” so that the accounts would look more genuine.
After misappropriating funds, Chen’s associates employed sophisticated cryptocurrency money laundering techniques, splitting large sums across dozens of wallet addresses before consolidating them to erase traces.
Some criminal proceeds were held in cryptocurrency exchanges or converted to cash deposited in banks. The rest were stored in private wallets controlled by Chen.
Chen reportedly created diagrams detailing the money laundering process and boasted that Prince Holding Group’s cryptocurrency mining projects were highly profitable because they incurred no costs, as they relied on funds stolen from thousands of victims worldwide.
U.S. Assistant Attorney General for National Security John A. Eisenberg described the Prince Group as a “criminal enterprise built on human suffering”.
The conglomerate was involved in human trafficking, holding individuals in “prison-like” conditions, and forcing them to carry out in online scams, he added.
According to the U.S. Treasury, Chen established a network of over 100 shell companies across more than 30 countries to legitimize illicit profits.
Laundered funds were mixed with legitimate capital in Cambodia’s economy. Many transactions were conducted through companies registered in the British Virgin Islands, later invested in real estate and art in London and New York.
U.S. authorities describe Prince Group as a conglomerate operating both legally and criminally, serving as a major investor in infrastructure projects while acting as a hub for global-scale money laundering.
They suggest Chen used social sponsorships and scholarship programs to polish his image and conceal illicit funds.
“Prince Holding Group’s promotional and marketing materials conceal its laundry list of transnational crimes including the construction, operation, and management of scam compounds reliant on human trafficking and modern-day slavery where industrial scale cyberfraud operations target victims around the world, including U.S. citizens,” according to the U.S. Treasury.
Several international news outlets have published investigative reports on Chen, alleging he leveraged his influence to conceal an “underworld” within his business empire, though the conglomerate has consistently denied these reports as false.
In response to a series of 2024 reports accusing Chen of orchestrating a scam network in Cambodia, Prince Group spokesperson Gabriel Tan stated that the conglomerate’s leadership was “impersonated by criminal elements” and that some organizations misused the Prince brand.
As of Thursday, the conglomerate’s website has not issued any comments on the allegations from the U.S. and UK governments.
If convicted in a U.S. court, Chen could face a maximum sentence of 40 years in prison.
U.S. and U.K. documents do not specify Chen’s current whereabouts or mention prospects for his arrest or extradition.
The indictment from the Eastern New York federal prosecutor’s office notes that the defendant has not been apprehended.
