The mysterious businessman who orchestrated US$14 billion fraud with ‘torture and extortion of workers’

The mysterious businessman who orchestrated $14 billion fraud with ‘torture and extortion of workers’ Prince Group/Getty Images At just 37 years old, Chen Zhi is accused of being “the mastermind behind a sprawling cyber fraud empire… a criminal enterprise built on human suffering.” With his sparse beard and childish features, he looks even younger. And, without a doubt, Chen Zhi became very rich, in a very short time. ✅ Follow g1’s international news channel on WhatsApp In mid-October, the United States Department of Justice accused Chen Zhi of running companies in Cambodia, responsible for fraud that stole billions of dollars in cryptocurrencies from victims around the world. The US Treasury Department confiscated around US$14 billion (around R$75.5 billion) in bitcoins that were linked to Chen Zhi. The agency also claims that this is the largest confiscation of cryptocurrencies ever carried out to date. Watch videos trending on g1 The Cambodian Prince Group, which he owns, describes Chen Zhi on its website as a “respected businessman and renowned philanthropist” whose “vision and leadership have transformed the Prince Group into a business leader in Cambodia that respects international standards.” The BBC has contacted the Prince Group, requesting comment on the matter. But what do we know about Chen Zhi, the mysterious figure accused of running a fraud empire? Surprising rise Raised in southeast China’s Fujian province, Chen Zhi started out with a small internet gaming company. Apparently, the venture had little success and he moved to Cambodia in late 2010 or 2011. There, he began working in the country’s booming real estate sector. His arrival coincided with the start of a speculative real estate boom in Cambodia. It was driven by the availability of large tracts of land expropriated by powerful figures with political connections and by an avalanche of Chinese capital inflows. Part of this capital was destined for the end point of the Belt and Road Initiative — Chinese President Xi Jinping’s New Silk Road, created to export Chinese-made infrastructure. There were also individual Chinese investors, seeking more affordable alternatives to China’s overheated property market. And the number of Chinese tourists visiting Cambodia also increased rapidly at that time. With all this, the skyline of the Cambodian capital, Phnom Penh, has changed drastically. Its distinctive cityscape of low-rise buildings and mustard-colored French colonial mansions has transformed into yet another Asian forest of steel and glass skyscrapers. The transformation of Sihanoukville, once a small and peaceful resort in the south of the country, was even more radical. In addition to Chinese tourists and real estate speculators, gamblers also started heading there, as gambling is illegal in China. New casinos, luxurious hotels and apartment blocks appeared. There was a lot of money to be made there. Still, Chen Zhi’s trajectory was surprising. In 2014, he became a naturalized Cambodian, renouncing his Chinese nationality. This decision allowed him to purchase land in his own name in Cambodia, but required a minimum investment or donation of US$250,000 (about R$1.35 million) to the country’s government. It was never known exactly where Chen Zhi’s money came from. When opening a bank account on the Isle of Man, in 2019, he mentioned an anonymous uncle who, according to him, had given US$2 million (about R$10.8 million) to him to found his first real estate company, in 2011. But he never proved this donation. The small town of Sihanoukville, on the south coast of Cambodia, transformed by Chinese investments Getty Images Chen Zhi founded the Prince Group in 2015, focused on real estate development. He was just 27 years old. In 2018, he obtained a license to operate a commercial bank and founded Banco Prince. That same year, he obtained a Cypriot passport, in exchange for a minimum investment of US$2.5 million (about R$13.5 million). With this, he gained easy access to the European Union. Later, Chen Zhi also acquired citizenship of Vanuatu, Oceania. He founded Cambodia’s third airline and in 2020 obtained the certificate to operate a fourth. The Prince Group’s real estate division built luxury shopping malls in Phnom Penh, five-star hotels in Sihanoukville and developed an ambitious project to build a US$16 billion “ecocity” there, called the “Bay of Lights”. In 2020, Chen Zhi received the highest title granted by the King of Cambodia, of Neak Oknha. The title requires a donation to the government of at least US$500,000 (around R$2.7 million). At that point, he had already been appointed official advisor to Cambodia’s Interior Minister, Sar Kheng, since 2017. He was also a business partner of his son, Sar Sokha, and an official advisor to the most powerful man in the country, Hun Sen — and, later, to his son, Hun Manet, who succeeded his father as prime minister in 2023. Chen Zhi was praised by the local press as a philanthropist. He has funded scholarships for low-income students and made sizable donations to help Cambodia cope with the Covid-19 pandemic. But he remained an enigmatic figure. Chen Zhi stayed out of the spotlight, making few public statements. Prince Bank branch in Cambodia’s capital, Phnom Penh AFP via Getty Images “Everyone I’ve spoken to, who has worked directly with him, or who has been in the same room with him, describes him as very kind, very calm, very measured,” says journalist Jack Adamovic Davies. He carried out a three-year investigation into Chen Zhi, which was published last year by US broadcaster Radio Free Asia. “I think he was smart not to become that kind of extravagant person who would be written about in sensationalist news,” he says. “Even those who no longer want to be associated with him remain impressed by his discreet charisma, his seriousness.” But where did so much wealth and power come from? ‘Long list of transnational crimes’ In 2019, the real estate bubble burst in Sihanoukville. The online betting business has attracted Chinese criminal organizations, which have fought violent turf wars among themselves, scaring away tourists. Under pressure from China, then Cambodian Prime Minister Hun Sen banned internet betting in August of that year. Around 450,000 Chinese left the city after the collapse of their main business. Many of the Prince Group’s residential blocks were left empty. But Chen Zhi continued to expand his business and spend freely. British authorities say that in 2019, he bought a £12 million mansion in north London and a £95 million office building in the city’s financial district. The United States claims that Chen Zhi and his associates purchased properties in New York, private jets, superyachts and a Picasso painting. According to Americans, Chen Zhi’s wealth comes from the most profitable business in Asia today: online fraud, accompanied by human trafficking and money laundering. The US and the UK imposed sanctions on 128 companies linked to Chen Zhi and the Prince Group, as well as 17 people of seven different nationalities, who allegedly helped run his internet scam empire. Assets linked to Chen Zhi in the US and UK have been frozen. The court filings contained images of ‘cellphone farms’ allegedly used to carry out online scams US District Court EDNY The sanctions announcement describes a complex network of shell companies and cryptocurrency wallets, which moved money to hide its origin. The document states that “the Transnational Criminal Organization Prince Group profits from a long list of transnational crimes, including sextortion (a type of fraud that consists of soliciting sexually explicit material, often from minors, for blackmail), money laundering, various frauds and extortions, corruption, illegal online gaming and the industrial-scale trafficking, torture and extortion of enslaved workers, to drive the operation of at least 10 fraud complexes in Cambodia.” ‘Empire of fraud’ China has also discreetly investigated the Prince Group, at least since 2020. Several lawsuits have been filed accusing the company of running internet fraud schemes. The Municipal Public Security Bureau of the Chinese capital, Beijing, created a working group “to investigate the Prince Group, a major international internet gambling organization based in Cambodia.” The US and UK allege that its activities were centered on businesses such as the Golden Fortune Science and Technology Park, a complex built by the Prince Group in Chrey Thom, near the border with Vietnam. The Prince Group has in the past denied any involvement in scams and stated that it no longer maintains links with Golden Fortune. But American and British investigations argue that there are still clear commercial links between them. Adamovic Davies interviewed several people who lived and worked near Golden Fortune for his investigation into Chen Zhi. They described brutal attacks, especially on Chinese, Vietnamese and Malaysians who tried to escape the complex, where they were forced to carry out online scams. “I believe the magnitude of their operations is what really sets Chen Zhi apart,” he says. Davies highlights that it is surprising that the Prince Group has managed to build a “global presence” without generating alarm, considering the serious criminal charges currently facing the group. “What should bother a lot of people is that Chen Zhi never managed to acquire all these assets, not in Singapore, not in London, not in the United States,” he explains. “Lawyers, accountants, real estate agents, bankers, everyone should have looked at this group and said, ‘Wait a moment, that doesn’t make sense.’ And they didn’t.” The Prince International Plaza building in Phnom Penh AFP via Getty Images Currently, after all the negative publicity generated by US and UK sanctions, companies have been quickly separating themselves from the Prince Group. The Central Bank of Cambodia had to issue a statement to concerned account holders, assuring them that they will be able to withdraw their funds from Prince Bank. And South Korean authorities froze US$64 million (about R$345 million) of its deposits in the country’s banks. The governments of Singapore and Thailand promise to conduct investigations into Prince Bank subsidiaries in their jurisdictions. Of the 18 people wanted by the US and the UK, three are Singapore citizens. The Cambodian government has made few statements other than calling on American and British authorities to ensure they have sufficient evidence for their accusations. But the Cambodian elite will find it difficult to distance themselves from Chen Zhi, after maintaining such close relations with him for so long. Cambodia was already facing increasing pressure due to its tolerance of fraudulent companies. There are those who estimate that they could represent around half of the country’s economy. And where is Chen Zhi in all this? There has been no news from him since the sanctions were announced in mid-October. 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