Cambodia arrests fraud mastermind and extradits him to China

Cambodia says it has extradited a billionaire businessman to China for allegedly masterminding a massive cryptocurrency scam that lured trafficked workers into forced labor camps to defraud victims around the world.

Chen Zhi was one of three Chinese nationals arrested on January 6 following a joint investigation into transnational crimes that lasted several months, Cambodia said.

The United States indicted a 37-year-old man in Cambodia in October on charges of internet fraud that stole billions of dollars in cryptocurrency. Britain also sanctioned his global business empire, the Prince Group.

Cambodian authorities also suspended the operations of Prince Bank, a subsidiary of Prince Group.

The National Bank of Cambodia said on Thursday that customers can still withdraw money and repay loans, but the bank has been liquidated and banned from providing new banking services.

Last year, U.S. authorities seized about $15 billion worth of bitcoin believed to belong to Chen, in what FBI Director Kash Patel described as “one of the largest financial fraud busts in history.”

The BBC contacted Prince’s group at the time for comment. In the past, the Cambodia-based group has denied any involvement in fraud. Its website says its businesses include real estate development, finance and consumer services.

Chen Zhi’s whereabouts have been unclear since he was indicted by the United States on fraud and money laundering charges in October.

But on Wednesday, Cambodian authorities said they had “arrested three Chinese nationals, including Chen Zhi, Xu Ji Liang and Shao Ji Hui, and extradited them to the People’s Republic of China.” The Ministry of Interior’s statement did not say where Chen Zhi was being detained.

His Cambodian nationality was revoked by royal decree last month, he added. The mysterious tycoon renounced his Chinese citizenship to become a Cambodian citizen in 2014.

The United Nations estimates that hundreds of thousands of people have been trafficked to Southeast Asia, many to Cambodia, lured by the lure of legitimate jobs and then subjected to online fraud.

People are being held against their will in scam farms and made to trick strangers online with threats of punishment or torture. Many of those trapped are Chinese and have been targeted by China.

Chinese authorities have also been quietly investigating the Prince Group since at least 2020. The company has been accused of online fraud in several court cases.

The Beijing Municipal Public Security Bureau established a task force to investigate Prince Group, which it described as “a major multinational online gambling organization based in Cambodia.”

Cambodia’s ruling elite has maintained close ties with Chen Zhi for many years. The government has said little since the US and UK sanctioned Prince’s group, other than to urge US and UK authorities to ensure they have sufficient evidence for their claims.

According to some estimates, fraudulent businesses could account for about half of the entire Cambodian economy.

“I think what makes Chen Zhi really stand out is the scale of his work,” Jack Adamovic Davies, a journalist who investigated Chen Zhi, told the BBC last year.

He said it was shocking that Prince’s group had been able to build a ‘global footprint’ without raising alarms, given the serious criminal charges it was currently facing.

Additional reporting by Southeast Asia correspondent Jonathan Head