Accused scam boss Chen Zhi arrested in Cambodia, extradited to China - Phnom Penh

Chen Zhi, indicted by the US for fraud and money laundering, was arrested in Cambodia and extradited to China. Photo / 123rf

Chinese-born tycoon Chen Zhi, who was indicted by the United States on fraud and money-laundering charges for running a multibillion-dollar cyberscam network from Cambodia, has been arrested there and extradited to China, Phnom Penh has said.

Chen allegedly directed operations of forced labour compounds across Cambodia, where trafficked workers were held in prison-like facilities surrounded by high walls and barbed wire, according to US prosecutors.

Since the US indictment and sanctions by Washington and London in October, authorities in Europe, the United States and Asia have targeted Chen’s firm, Prince Holding Group, with a frenzy of asset confiscations.

Chen founded Prince Group, a multinational conglomerate that authorities say served as a front for “one of Asia’s largest transnational criminal organisations”, according to the US Justice Department.

Cambodian authorities “have arrested three Chinese nationals, namely Chen Zhi, Xu Ji Liang, and Shao Ji Hui and extradited [them] to the People’s Republic of China,” Cambodia’s interior ministry said on Wednesday.

The operation was carried out on Tuesday “within the scope of co-operation in combating transnational crime” and according to a request from Chinese authorities “following several months of joint investigative co-operation”, it said.

Chen’s Cambodian nationality was “revoked by a Royal Decree” in December, the interior ministry added.

Chinese authorities did not immediately comment late Wednesday on Chen’s arrest and extradition.

US authorities in October unsealed an indictment against Chen, a businessman accused of presiding over compounds in Cambodia where trafficked workers carried out cryptocurrency fraud schemes that have netted billions of dollars.

He faces up to 40 years in prison if convicted in the United States on wire fraud and money laundering conspiracy charges involving approximately 127,271 bitcoin seized by Washington, worth more than US$11 billion ($19b) at current prices.

Prince Group has denied the allegations.

According to the US charges, scam workers were forced – under threat of violence – to execute so-called “pig butchering” scams, cryptocurrency investment schemes that build trust with victims over time before stealing their funds.

The schemes target victims worldwide, causing billions in losses.

Scam centres across Cambodia, Myanmar and the region use fake job ads to attract foreign nationals – many of them Chinese – to purpose-built compounds, where they are forced to carry out online fraud.

Since around 2015, Prince Group has operated across more than 30 countries under the guise of legitimate real estate, financial services and consumer businesses, US prosecutors said.

Chen and top executives allegedly used political influence and bribed officials in multiple countries to protect their illicit operations.

In Cambodia, Chen has served as an adviser to Prime Minister Hun Manet and his father, former leader Hun Sen.

The Southeast Asian nation hosts dozens of scam centres with tens of thousands of people perpetrating online scams – some willingly and others trafficked – in the multibillion-dollar industry, experts say.

- Agence France-Presse