Cambodian authorities announced Wednesday that a prominent businessman wanted by U.S. federal prosecutors on suspicion of running one of Asia’s largest transnational criminal networks has been arrested and extradited to China.
Cambodian Interior Ministry said in a statement that Cheng Zhi, 38, a Chinese-Cambodian national, was extradited on Tuesday after months of investigation by both countries. The ministry added that Cheng’s Cambodian citizenship has been revoked.
The ministry said the operation was carried out at the request of the Chinese government, but it was unclear what charges Mr. Chen was facing in China. He was arrested along with two other Chinese nationals.
Mr. Chen is the founder and chairman of Prince Group. Prince Group bills itself as one of Cambodia’s largest conglomerates, with investments in luxury real estate, banking services, hotels and large-scale construction developments.
But U.S. federal prosecutors allege that Mr. Chen’s business empire was fueled by forced labor and cryptocurrency scams that scammed victims around the world, at one point earning him and his associates $30 million a day.
In October, the US Treasury and the UK Foreign Office designated Prince Group and dozens of its affiliates as transnational criminal organizations and sanctioned them. Mr. Chen, along with several associates, was indicted in absentia in New York on charges of money laundering conspiracy and wire fraud conspiracy.
Prosecutors also seized $15 billion in cryptocurrencies from Mr. Chen following a years-long investigation, in what the Justice Department said was the largest forfeiture in history.
Since the indictment was announced, several other jurisdictions, including Singapore, Thailand, Hong Kong and Taiwan, have announced the seizure or freezing of hundreds of millions of dollars in assets linked to Chen.
CNN has reached out to a lawyer representing Prince Group for comment on Chen’s arrest. In a statement posted on its website, Prince Group has previously denied involvement in any illegal activity, calling the allegations “baseless” and “aimed at justifying the unlawful seizure of assets.”
China’s Foreign Ministry said “relevant Chinese authorities” would release information on the incident at a later date.
“China has actively cooperated with Cambodia and other countries to combat cross-border telecommunications and online fraud for a period of time, and has achieved great results,” ministry spokesperson Mao Ning said at a press conference on Thursday.
Cambodia has recently come under increased pressure to counter fraudulent networks operating within its borders. The Interior Ministry said in a statement that Chen’s arrest was “within the scope of cooperation to combat transnational crime.”
The United Nations Office on Drugs and Crime said that despite last year’s major crackdown, criminal networks operating fraud hubs were evolving on an unprecedented scale.
“The arrests reflect that sustained international pressure has finally reached a point where continued inaction is no longer sustainable for Phnom Penh,” said Jacob Sims, a visiting fellow at Harvard University’s Asia Center and an expert on transnational crime.
“This was in line with Beijing’s desire to keep politically sensitive cases out of the US and UK courts, while easing increased scrutiny from the West.”
Analysts say Chen’s extradition to China means it is “very unlikely” that he will be tried in the United States, at least in the short term. China does not have an extradition treaty with the United States, and the two countries are embroiled in deepening geopolitical and economic conflicts.
“This result effectively shields Mr. Chen from U.S. jurisdiction,” Sims said.
The global fraud industry is largely concentrated in Southeast Asia and is estimated to be worth between $50 billion and $70 billion. In 2023, it defrauded victims out of at least $10 billion in the United States alone.
This massive industry relies on hundreds of thousands of people who have been trafficked or lured to work in heavily guarded fraudulent facilities, where they are forced to commit investment and romance scams known as “pig butchering” that trick ordinary people out of their life savings.
U.S. prosecutors allege that since 2015, Chen and his colleagues operated at least 10 forced labor camps across Cambodia and engaged in a cryptocurrency investment scheme under threat of violence.
Authorities allege they laundered criminal proceeds through this business and bribed government officials to preempt criminal investigations and raids on their facilities.
U.S. and British authorities say Prince Group was affiliated with more than 100 shell companies and entities that allegedly funneled laundered cash to 12 countries and territories, from Singapore to St. Kitts and Nevis.
New York prosecutors say Chen and others used the stolen money to buy Picasso works, a private jet, real estate in an upscale London neighborhood and bribe government officials.
Analysts say Chen faces a number of unresolved legal issues in China, but the charges remain unclear and so far no extradition has been forced on him.
“What is clear, however, is that given the political sensitivities surrounding China’s business empire, its regional connections, and especially its reported relationships with various Chinese government officials, Beijing has a strong incentive to quietly handle this internally,” Sims said.
