Cambodia arrests suspected fraud mastermind and extradites to China

Cambodia says it has extradited to China a billionaire businessman accused of orchestrating a massive cryptocurrency scam in which trafficked workers were lured to forced labor camps to defraud victims around the world.

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

In October last year, the United States charged the 37-year-old with cyber fraud in Cambodia, saying he stole billions of dollars in cryptocurrency. Britain also sanctioned his global business empire Prince Group.

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

The National Bank of Cambodia said on Thursday it had been placed into liquidation and banned from providing new banking services, but customers could still withdraw money and repay loans.

Last year, U.S. authorities Bitcoin worth around $15bn (£11bn) seized The case, allegedly belonging to Chen, was described by FBI Director Kash Patel as “one of the largest financial fraud busts in history.”

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

Chen Zhi’s whereabouts have been unknown 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, namely Chen Zhi, Xu Jiliang and Shao Jihui, and extradited them to the People’s Republic of China”. The Interior Ministry statement did not disclose where Chen Zhi was detained.

His Cambodian citizenship was revoked by royal decree last month, the statement added. The mysterious tycoon renounced his Chinese citizenship in 2014 and became a Cambodian citizen.

The United Nations estimates that hundreds of thousands of people are trafficked into Southeast Asia, with many lured to Cambodia by the promise of legal work and then forced to commit online fraud.

People are forced to be held in scam farms and defraud strangers online under threat of punishment or torture. Many of those trapped are Chinese and are among those targeted in China.

Chinese authorities have been quietly investigating the Prince Group since at least 2020. The company has been accused in multiple court cases of running cyber fraud schemes.

The Beijing Municipal Public Security Bureau set up a task force to investigate the Prince Group, calling it a “large-scale multinational online gambling group based in Cambodia.”

Cambodia’s ruling elite has had close ties with Mr. Chan for years. Since the U.S. and U.K. sanctioned the prince group, the government has said little other than urging U.S. and U.K. authorities to ensure there is sufficient evidence for their accusations.

It is estimated that the fraud industry may account for about half of Cambodia’s entire economy.

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

He said it was shocking that Prince Group was able to establish a “global footprint” without setting off alarm bells, given the serious criminal charges it currently faces.

Additional reporting by Southeast Asia reporter Jonathan Head