Alleged cybercrime kingpin arrested and extradited from Cambodia to China

By Helen Regan, CNN

(CNN) — A prominent tycoon wanted by United States federal prosecutors for allegedly running one of Asia’s largest transnational criminal networks has been arrested and extradited to China, Cambodian authorities and Chinese state media said.

Chen Zhi, 38, a national of China and Cambodia, was extradited on Tuesday after a months-long investigation by the two countries, Cambodia’s Interior Ministry said in a statement a day later. Chen’s Cambodian citizenship had been revoked, the ministry added.

The operation was conducted at the request of the Chinese government, the ministry said, though it is unclear what charges Chen faces in China. He was arrested alongside two other Chinese nationals.

Chen is the founder and chairman of Prince Group, which bills itself as one of Cambodia’s biggest conglomerates, with investments in luxury real estate, banking services, hotels, and major construction developments.

But US federal prosecutors say his business empire was fueled by forced labor and cryptocurrency scams that conned victims the world over and at one point were allegedly earning Chen and his associates $30 million every day.

In October, the US Treasury Department and UK Foreign Office sanctioned Prince Group and dozens of its affiliates, designating them transnational criminal organizations. Chen was charged in absentia in New York with money laundering conspiracy and wire fraud conspiracy, along with several associates.

Prosecutors also seized $15 billion in cryptocurrency from Chen following a years-long investigation, in what the Justice Department said was the largest forfeiture action in its history.

Since the indictment was announced, several other jurisdictions including Singapore, Thailand, Hong Kong and Taiwan announced seizures or freezes of hundreds of millions of dollars in assets linked to Chen.

CNN has reached out to lawyers representing Prince Group for comment on Chen’s arrest. Prince Group has previously denied engaging in unlawful activity, calling the allegations “baseless” and “aimed at justifying the unlawful seizure of assets,” according to a statement published on its website.

Chinese state media CCTV released footage Thursday of a handcuffed and hooded Chen being escorted from an airplane by Chinese security forces following his extradition.

“At present, Chen Zhi has been placed under compulsory criminal measures in accordance with the law, and the related cases are under further investigation,” the Ministry of Public Security said in a statement. It described Chen as “the ringleader of a major cross-border online gambling and fraud criminal syndicate.”

Chinese authorities will also issue wanted notices “for the first group of key members of the Chen Zhi criminal syndicate and will resolutely apprehend all fugitives and bring them to justice,” a ministry official said.

Cambodia has recently come under more pressure to act against the scam networks operating within its borders. In its statement, the interior ministry said Chen’s arrest was “within the scope of cooperation in combating transnational crime.”

The United Nations Office of Drugs and Crime has said the criminal networks that run the scam hubs are evolving at an unprecedented scale, despite highly publicized crackdowns last year.

“This arrest reflects sustained international pressure finally reaching a point where continued inaction became untenable for Phnom Penh,” said Jacob Sims, visiting fellow at Harvard University’s Asia Center and a transnational crime expert.

“It defused escalating Western scrutiny while aligning with Beijing’s likely preference to keep a politically sensitive case out of US and UK courts.”

What does arrest mean for US charges?

Analysts say Chen’s extradition to China will mean it is “highly unlikely” he will face justice in the US, at least in the short term. China does not have an extradition treaty with the US and the two countries are embroiled in a deepening geopolitical and economic rivalry.

“This outcome effectively shields Chen from US jurisdiction,” said Sims.

The global scam industry, much of it centered in Southeast Asia, is estimated to be worth between $50 billion and $70 billion. In 2023 it conned victims in the United States alone out of at least $10 billion dollars.

The massive industry relies on hundreds of thousands of people who have been trafficked or lured to work in heavily guarded scam compounds, where they are forced to carry out investment or romance scams known as “pig butchering,” to con ordinary people out of their life savings.

US prosecutors allege Chen and others operated at least 10 forced labor camps across Cambodia since 2015 to engage in cryptocurrency investment schemes under the threat of violence.

Authorities allege they laundered criminal proceeds through the business and bribed government officials to stay ahead of criminal investigations and raids on the compounds.

Prince Group, American and British authorities allege, was the umbrella for more than 100 shell companies and entities allegedly used to funnel laundered cash across 12 countries and territories from Singapore to St Kitts and Nevis.

Chen and others used the stolen money to buy Picasso artwork, private jets and properties in upscale neighborhoods of London, as well as supplying bribes to public officials, according to prosecutors in New York.

Analysts say Chen faces a number of outstanding legal issues in China, though the charges remain opaque and have not compelled his extradition until now.

“What is clear, however, is that Beijing has strong incentives to handle this quietly and internally, given the political sensitivities surrounding his business empire, its regional ties, and in particular, a number of reported ties to various Chinese government officials,” Sims said.

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