Federal prosecutors have seized $15 billion in cryptocurrency linked to an alleged investment scam known as “pig butchering.” This scheme is said to have originated from forced labor camps in Cambodia, marking the largest forfeiture action in the history of the Justice Department.
The indictment unsealed on Tuesday charges Chen Zhi, a Chinese émigré and the founder of the Cambodia-based Prince Group, with conspiracy to commit money laundering and wire fraud. Chen, who holds multiple passports, remains at large. In conjunction with these charges, the Treasury Department has sanctioned numerous affiliates of the Prince Group, designating them as criminal organizations.
As investment scams like “pig butchering” continue to proliferate, American consumers have lost millions of dollars. The term refers to the method of fattening victims for exploitation before ultimately defrauding them. Prosecutors claim that under Chen’s leadership, the Prince Group became one of the largest transnational criminal organizations operating in Asia. Reports indicate the stolen funds were used to purchase extravagant assets, including yachts, private jets, and even a Picasso painting acquired through a New York auction house.
The seizure involved 127,271 bitcoins, currently valued at approximately $15 billion and now held in U.S. custody. Christopher Raia, assistant director in charge of the FBI’s New York field office, described the case as one of the largest pig butchering schemes the agency has investigated. Raia emphasized the importance of addressing the most significant cases to disrupt these criminal networks.
The FBI’s investigation into a money laundering operation based in Brooklyn in 2022 eventually led them to the extensive operations of the Prince Group. Allegedly, Chen and his associates have run at least ten forced labor camps throughout Cambodia since 2015, where individuals were compelled to participate in cryptocurrency investment schemes. It is claimed that they laundered proceeds from these activities while bribing government officials to elude law enforcement scrutiny.
Authorities describe the forced labor camps as heavily fortified facilities, employing automated call centers or “phone farms” that utilized 1,250 mobile phones to manage 76,000 social media accounts. Workers inside the camps were instructed to establish relationships with potential victims, often using false identities and photos that appeared more genuine. Many victims were contacted through messaging apps, with an approach that sometimes involved pretending to have dialed the wrong number.
Once rapport was built, victims were invited to invest money, often via virtual currencies, lured by false promises of returns. Allegations indicate that once funds were transferred, scammers would fabricate profits to entice further investments before cutting off all communication once they were fully defrauded. In 2018, the Prince Group reportedly earned over $30 million daily from these fraudulent schemes.
The camps reportedly used physical coercion to maintain control over the laborers. According to the indictment, Chen and his associates extended bribes to public officials in China and elsewhere to avoid investigations and raids on their operations. Detailed records of these bribes were allegedly kept by Chen, including a notable instance in 2019 when a $3 million yacht was purchased for a high-ranking official.
The $15 billion cryptocurrency seizure surpasses a previous record of $225 million announced by the Justice Department in June. Law enforcement officials are emphasizing the importance of raising awareness about the devastating impacts of crypto-investment scams. Reports have emerged about individuals, including an American man in his 80s, who tragically ended their lives after being swindled out of their life savings.
Southeast Asia has become a hub for these criminal networks, with reports indicating that many scams are orchestrated from large compounds along the Myanmar-Thailand border. In light of this growing threat, Raia urges anyone who suspects they may be a victim to reach out to the FBI and cautions against engaging in financial dealings with individuals met online, underscoring the risks associated with the anonymity of social media.
