In a significant crackdown on elaborate fraudulent schemes, federal prosecutors have announced the seizure of $15 billion linked to Chen Zhi, who is alleged to be the mastermind behind a forced-labor operation using imprisoned workers to con unsuspecting individuals into investing in counterfeit funds. This scheme, often referred to as “pig butchering,” manipulates victims by cultivating fake romantic relationships over extended periods before introducing fake investment opportunities.
Understanding ‘Pig Butchering’ Scams
These scams have gained notoriety for their deceptive tactics, which generally begin on social media platforms. Scammers create profiles that showcase attractive individuals who express romantic interest in their targets. This charade can last for months, allowing the scammers to build trust and slowly sway the victim towards discussions about investing in fraudulent financial schemes.
Forced Labor, Phone Farms, and Human Suffering
The ultimate goal of these conversations is to persuade victims to transfer large sums, often in bitcoin, to the scammers. Disturbingly, many of these scammers are themselves victims of human trafficking, held captive in compounds equipped with guards and barbed wire, where they are forced to engage in these illicit activities.
On Tuesday, an indictment was unveiled against Chen Zhi, the founder and chairman of a multinational business conglomerate operating out of Cambodia. The charges outline Zhi’s leadership in the forced-labor scheme, which has reportedly earned billions from its victims through the exploitation of both technology and human suffering.
As outlined in the legal documents filed in the US District Court for the Eastern District of New York, prosecutors noted that Zhi and his co-conspirators engineered these operations to maximize profits while ensuring they had extensive infrastructure to reach a broad audience. Notably, legal filings included revelations about how co-conspirators procured millions of mobile phone numbers and passwords from illicit online marketplaces and oversaw the construction of compounds specifically designed for their operations. For instance, in 2019, significant resources went into creating what was termed the Golden Fortune compound, which served as a base for their operations. Chen had even kept documentation detailing “phone farms,” which are automated call centers utilized in cryptocurrency fraud and other cybercrimes.
Credit: Justice Department
Chen Zhi is associated with the Prince Group, a Cambodian corporate conglomerate that claims to operate a range of legitimate business entities across more than 30 countries. However, investigations suggest that Zhi and key executives have secretly turned it into one of Asia’s major transnational criminal entities. As of now, Chen’s location remains unknown.
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Image Credit: arstechnica.com
