By Kara Scannell, CNN
(CNN) — Federal prosecutors seized $15 billion in cryptocurrency from an investment scheme known as “pig butchering” that they allege emanated from forced labor camps in Cambodia.
The Justice Department said it’s the largest forfeiture action in its history.
Prosecutors unsealed an indictment Tuesday charging Chen Zhi, a Chinese émigré who holds several passports and built the Cambodia-based Prince Group, one of that country’s largest conglomerates, charging him with money laundering conspiracy and wire fraud conspiracy.
Chen remains at large.
In a related action, the Treasury Department sanctioned dozens of affiliates of the Prince Group and designated them as criminal organizations.
The crackdown comes as investment scams known as “pig butchering,” named for the practice of fattening up prey before the slaughter, have been on the rise costing Americans millions of dollars.
Prosecutors allege Chen turned the Prince Group into one of the largest transnational criminal organizations in Asia. Authorities say Chen and others used the stolen money to buy yachts, private jets and a Picasso painting bought through a New York auction house.
Authorities said they seized 127,271 bitcoin, which is in US custody, that is currently valued at approximately $15 billion.
Christopher Raia, the assistant director in charge of the FBI’s New York field office, told CNN it’s one of the largest pig butchering schemes they’ve investigated. The scams are rampant, he said, and the FBI is focusing on the biggest cases to try to stop the harm.
“It’s kind of like jaywalking,” Raia said, adding authorities can’t arrest their way out of the problem. The FBI is focusing on the biggest cases, he said, to “cut off the head of the snake.”
Raia said the FBI was investigating a money laundering network in Brooklyn, New York, in 2022, which led them to the Prince Group’s widespread operation.
Not ‘too beautiful’
Chen and others allegedly operated at least 10 forced labor camps across Cambodia since 2015 to engage in cryptocurrency investment schemes. Authorities allege they laundered criminal proceeds through the business and paid bribes to government officials to stay ahead of criminal investigations.
According to the indictment, forced labor camps, surrounded by high walls and barbed wire, were turned into phone farms, or automated call centers, to carry out the cryptocurrency scheme and others.
Two facilities were staffed with 1,250 mobile phones that controlled 76,000 accounts on social media platforms, according to the indictment.
Authorities allege as part of the scheme people were contacted on messaging apps and social media, sometimes feigning to have the wrong number.
The workers were provided instructions on how to build rapport with future victims by “including a direction to use profile photos of women who were not ‘too beautiful’ so the accounts would appear genuine,” according to the indictment.
The relationship would usually continue for weeks until the victim was invited to participate in an investment and then transferred money through virtual currencies. At other times, the indictment alleges, the perpetrators claimed emergencies or sought money through romance scams.
Once the victim transferred the money, authorities allege, the scammers would claim the money was invested and show the victim fake profits to encourage them to invest further. Ultimately, once the money was stolen, according to the indictment, the perpetrators would cut off all contact.
In 2018, Prince Group was earning over $30 million a day from fraudulent schemes, the indictment alleges one of Chen’s co-conspirators boasted.
They allegedly used physical violence at the camps to keep the laborers in check.
Authorities allege Chen and his co-conspirators bribed public officials in China and elsewhere to stay ahead of investigations and raids on the forced labor compound. Chen kept ledgers of bribes, according to the indictment, and in 2019 a $3 million yacht was bought for a senior official of a foreign government.
The $15-billion crypto seizure far exceeds a $225-million seizure that the Justice Department announced in June and called a record then.
Law enforcement officials are trying to do more to warn Americans that crypto-investment scams can ruin their lives and those of their loved ones. CNN reported last year on one American man in his 80s who took his own life after losing all his savings to scammers.
A large volume of crypto scams are conducted by networks of scammers in Southeast Asia, according to US law enforcement. A CNN investigation has traced some of the schemes to large compounds along the Myanmar-Thailand border.
As these investment schemes proliferate online, Raia asks anyone who thinks they’re a victim to contact the FBI. He says people should be weary before parting with their money with anyone they meet online.
“It’s just not a good decision, especially in this day and age with social media and everybody on the Internet portraying themselves to be somebody they’re not,” he said.
CNN’s Sean Lyngaas contributed to this report.
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