Federal prosecutors have confiscated $15 billion in cryptocurrencies as part of an investment scheme referred to as “pig butchering.” Authorities claim this scheme has ties to forced labor camps in Cambodia.
The Justice Department noted that this case marks the largest forfeiture in its history.
An indictment was unsealed recently, charging Cheng Jie, a Chinese immigrant and founder of the Prince Group, a major conglomerate in Cambodia, with conspiracy to commit money laundering and wire fraud.
Currently, Mr. Chen is elusive.
In a related effort, the Ministry of Finance has imposed sanctions on numerous affiliates of the Prince Group, labeling them as criminal entities.
This crackdown is unfolding against a backdrop of increasing investment fraud, specifically “hog butchering,” a tactic where victims are gradually manipulated before being swindled, leading to significant financial losses for many Americans.
Prosecutors allege that Chen has links to one of Asia’s largest transnational crime organizations. It’s claimed that he and his associates utilized stolen funds to buy extravagant items, including a yacht, a private jet, and even a Picasso painting auctioned in New York.
Authorities report seizing 127,271 Bitcoins stored in the U.S., totaling about $15 billion at current values.
Christopher Reier, deputy director of the FBI’s New York office, mentioned this incident being among the largest hog slaughter schemes they have investigated, emphasizing the rampant nature of fraud and the FBI’s dedication to tackling substantial cases.
“It’s kind of like a pedestrian bridge,” Raia commented, suggesting that simply arresting individuals won’t solve the underlying issues. The FBI aims to address significant cases to “cut off the head of the snake.”
Mr. Raia noted that a money laundering network linked to the Prince Group was identified in Brooklyn in 2022, laying the groundwork for the group’s widespread illicit activities.
Since 2015, Cheng and accomplices are accused of operating at least ten forced labor camps in Cambodia, facilitating cryptocurrency investment schemes while laundering proceeds and allegedly bribing officials to avoid investigations.
The indictment describes the forced labor camps as fortified facilities that were transformed into phone farms or automated centers to execute these fraudulent schemes.
These locations reportedly housed 1,250 cell phones and managed 76,000 social media accounts.
Authorities allege the scheme involved reaching out to potential victims via messaging apps and social media, sometimes under the pretense of calling the wrong number.
Indictment claims show that employees were trained on how to build trust with victims, including using unremarkable profile pictures to appear more genuine.
Typically, this relationship would last a few weeks before the victim was lured into investing, subsequently transferring funds via virtual currencies. Additionally, it seems the scammers claimed emergencies to solicit money through romance scams.
Once victims sent money, the fraudsters claimed it was invested and provided fake profit reports to entice further investments. After completing the theft, all communication was severed.
In 2018, one of Chen’s associates bragged about the Prince Group earning over $30 million daily through scams.
Allegations suggest that physical violence was employed in the camps to control workers.
Authorities assert that Chen and his cohorts bribed officials in China and elsewhere to avoid scrutiny of their forced labor operations. It’s reported that Chen maintained a ledger detailing bribery and even purchased a $3 million yacht for a foreign official in 2019.
The $15 billion seizure vastly surpasses the previous record of $225 million taken by the Justice Department in June.
Officials are intensifying efforts to alert Americans that cryptocurrency scams can have devastating impacts on lives. There was a tragic case reported where an elderly man took his life after losing all his savings to scammers.
U.S. law enforcement indicates that a significant number of cryptocurrency scams are coming from Southeast Asia, with investigations revealing parts of these operations situated along the Myanmar-Thailand border.
As these investment schemes become more prevalent online, Raia encourages anyone worried they might be victims to reach out to the FBI. He cautions people to think carefully before sending money to someone they met online.
“This isn’t a wise choice—especially today, when social media often presents people in a misleading way,” he stated.
