The US government has already confiscated more than $14bn (£10.5bn) worth of bitcoin and charged the founder of a Cambodian business empire, the Prince Group, due to allegedly organizing a vast cryptocurrency scheme, including forced labor camps.
UK and Cambodian national Chen Zhi were charged with allegedly involving a wire-fraud conspiracy scheme and a money laundering scheme.
The US and the UK also conducted joint operations sanctioning the businesses of Chen.
The UK government claims to have frozen assets belonging to his network, 19 London properties, one of which is valued at almost £100m ($133m). Meanwhile, the BBC has approached the Prince Group seeking comment.
US prosecutors indicated that it was the biggest financial seizure of all time, and the largest ever bitcoin seizure, as about 127,271 bitcoins were under the US government.
The US Department of Justice (DOJ) stated that Chen, who still remains at large, has been accused of being the mastermind of a “sprawling cyber-fraud empire” that functions under his multi-national corporation, the Prince Group.
The official website of the Cambodian-based group reported that its businesses include property development, financial services, and consumer services.
The DOJ said that unwitting victims were approached online and persuaded that they should transfer cryptocurrency under false claims that the money would be invested and generate profits.
According to court documents obtained by the BBC, prosecutors’ accusations described the company, at the direction of Chen, constructing and running at least ten scam compounds across the Cambodian nation.
The prosecutors added that Chen was in charge of handling the compounds that were specifically designed to hit as many victims as possible.
The court documents dated 8 October claimed that his accomplices had allegedly acquired millions of mobile phone numbers and set up “hone farms” to perpetrate call center scams.
The documents indicated that two of these facilities had 1,250 mobile phones that managed approximately 76,000 social media accounts that contained scams.
The prosecutors alleged that Prince Group records contained tips on how to establish rapport with the victims, where the workers were advised not to use the profile picture of women who were “too beautiful” so that the accounts could seem more real.
John Eisenberg, the Assistant Attorney General in charge of the National Security Division, referred to the Prince Group as a “criminal enterprise built on human suffering”.
He reported that it had also trafficked workers, who were imprisoned in prison-like compounds and made to perpetuate scams over the internet, victimizing thousands of people around the world.
According to the DOJ, Chen and his associates spent the criminal proceeds on luxury travel and entertainment.
The Department also stated that they had a “extravagant” purchases like watches, private jets, and rare artwork, as well as a Picasso painting purchased from a New York City auction house.
If he is found convicted of the matter, he may likely face the maximum penalty of 40 years imprisonment.
The alleged activities of Chen and his accomplices in Britain involved the incorporation of businesses in the British Virgin Islands and investing in UK property.
The assets of his network also comprise a £100 million office block in central London, a £12 million mansion in North London, and seventeen flats in the city, which the UK foreign office was quoted as saying on Tuesday.
Having been sanctioned, a joint action with the US authorities, he is now locked out of the financial system of the UK.
The Prince Group is also blacklisted in the US and declared a criminal group.
UK Foreign Secretary Yvette Cooper stated that they were “ruining the lives of vulnerable people and buying up London homes to store their money.”
Cooper said: “Together with our US allies, we are taking decisive action to combat the growing transnational threat posed by this network – upholding human rights, protecting British nationals and keeping dirty money off our streets.”
The foreign office indicated that the casinos and compounds constructed by Chen and Prince Group as scam centers and laundered the money.
The foreign office has also sanctioned four businesses that were allegedly involved in the scams, and these are The Prince Group, Jin Bei Group, Golden Fortune Resorts World, and Byex Exchange.
These scammers work on an “industrial scale,” even in the UK, with tricks such as setting up false romantic relations to entrap victims to become scammed, said the Foreign Office.
Fraud Minister Lord Hanson reported that “Fraudsters prey on the most vulnerable by stealing life savings, ruining trust, and devastating lives. We will not tolerate this.”
