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Federal authorities have seized about $15 billion worth of Bitcoin in an alleged fraud and money laundering scheme that used human trafficked workers in Southeast Asia to defraud victims in the United States and around the world, prosecutors announced on October 14.
In an indictment unsealed on October 14, federal prosecutors accused Chen “Vincent” Gee, 37, of running an “industrial-scale” cryptocurrency fraud involving forced labor facilities across Cambodia. Prosecutors alleged that workers were held against their will in these facilities and forced to participate in a cryptocurrency investment fraud scheme known as the “pig butchering” scam.
Mr. Gee, who is said to be the founder and chairman of Prince Holding Group, is charged with wire fraud conspiracy and money laundering conspiracy. Prosecutors alleged that Gee secretly grew the Cambodian-based multinational conglomerate Prince Group into “one of Asia’s largest transnational criminal organizations.”
According to prosecutors, the U.S. Treasury Department has designated the Prince Group as a transnational criminal organization and, along with Britain, has sanctioned the group and its affiliates.
Prosecutors said the U.S. Department of Justice has seized approximately 127,271 bitcoins ($15 billion, according to the Justice Department) in traceable funds from the crime. They are now seeking court approval to permanently store the bitcoins, in what prosecutors are calling the “largest ever forfeiture case” in Justice Department history.
“As alleged, the defendant was the mastermind of a massive cyber fraud empire operating under the Prince Group umbrella, a criminal enterprise built on human suffering,” Assistant Attorney General John Eisenberg of the National Security Agency said in a statement. “Trafficked workers are locked up in prison-like facilities and forced to run online frauds on an industrial scale, preying on thousands of people around the world, including many here in the United States.”
Prosecutors said Gee remains at large and is believed to be in Cambodia. If convicted, he faces up to 40 years in prison.
Hundreds of workers were trafficked and forced into labor camps
According to the indictment, Shi has been the founder and chairman of Prince Group since around 2015. Prince Group, which operates dozens of entities in more than 30 countries, is “ostensibly focused on real estate development, financial services, and consumer services.”
However, prosecutors said that under Mr. Gee’s direction, Prince Group “operated a fraudulent facility that carried out fraudulent cryptocurrency investment schemes throughout Cambodia and made huge profits.”
Prosecutors alleged that Prince Group trafficked hundreds of workers. Prosecutors say workers were lured at the facility with fake job ads and forced to commit online fraud under torture and threats of violence.
Prosecutors said the compound consisted of “vast dormitories surrounded by high walls and barbed wire” and functioned as a violent forced labor camp. Prosecutors accused Zhi of having direct control over the premises, keeping records such as ledgers tracking profits and what plans were being carried out in each room.
Prosecutors said the scheme involved luring victims into fake romantic relationships and then having them invest large sums of money in fraudulent cryptocurrency platforms.
“Scam perpetrators often took the time to build relationships with their victims and gain their trust before stealing funds,” prosecutors said, adding that victims around the world were targeted with the help of local networks acting on behalf of the Prince Group.
Prosecutors say one network operated out of Brooklyn, New York, and facilitated the laundering of millions of dollars from more than 250 victims across the United States on behalf of the Prince Group.
Prince Holding Group founder used fraudulent funds for lavish lifestyle
Prosecutors said Gee and his associates used some of the funds from the scheme for luxury travel and entertainment. They also used the proceeds to purchase watches, yachts, private jets, vacation homes, luxury collectibles, and rare art such as a Picasso painting purchased through a New York City auction house.
Prosecutors said Gee and other Prince Group executives are also accused of using their political influence in several countries “to protect their criminal enterprises” and paying bribes to public officials to avoid disruption from law enforcement.
Prosecutors alleged that Zhi and his associates laundered money through online gambling and cryptocurrency mining companies. Prosecutors said the funds were previously stored in a cryptocurrency wallet owned by Zhi.
According to prosecutors, Prince Group employees are suspected of using “sophisticated virtual currency laundering techniques to conceal the source of ill-gotten gains” under Gee’s direction. These techniques include “spraying” and “funneling,” where large amounts of cryptocurrency are distributed across many cryptocurrency addresses and then reintegrated into fewer addresses.
Contributed by: Reuters
