U.S. and U.K. Target Cybercriminal Networks, Seize $15 Billion

A coordinated operation between the United States and the United Kingdom has led to significant actions against two major cybercriminal networks operating in Southeast Asia. These networks were involved in human trafficking and financial fraud through schemes known as “pig butchering.” The U.S. authorities seized approximately $15 billion in bitcoin linked to the criminal activities of Chen Zhi, the leader of the Prince Group, which has been implicated in extensive scams causing billions in losses worldwide.

The actions included sanctions against the Prince Group and its associates. U.S. authorities have indicted Chen Zhi for his role in directing a criminal enterprise that exploited individuals through online scams and human trafficking. In addition, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has implemented strict measures against the Cambodia-based Huione Group, effectively severing its ties with the U.S. financial system due to its involvement in money laundering and cybercrime.

New Regulations for Financial Institutions

FinCEN’s new regulations, effective from November 17, 2023, impose special measures on Huione Group, which is categorized under the USA PATRIOT Act. These measures prohibit U.S. banks, mutual funds, and other financial institutions from maintaining accounts for Huione Group. Financial institutions are now required to implement enhanced due diligence processes to prevent any transactions involving the group.

Banks must notify account holders who may provide services to Huione Group that they are prohibited from doing so. Additionally, institutions are required to screen for transactions involving Huione Group and investigate any suspected violations. Failure to comply may result in civil and criminal penalties, as FinCEN emphasizes the serious nature of the group’s ongoing criminal activities.

Criminal Networks Uncovered

The coordinated enforcement actions reveal the extent of the criminal networks operating under Prince Group, which has been accused of running forced labor camps in Cambodia. According to the U.S. Attorney’s Office for the Eastern District of New York, Chen Zhi allegedly masterminded a complex operation that included at least ten forced-labor scam compounds. Victims were often lured with false job offers, only to find themselves trapped and coerced into executing fraudulent schemes.

The U.S. Department of Justice described the conditions in these compounds as dire, with high walls and barbed wire enclosing vast dormitories where victims were subjected to physical abuse and threats. These victims often became perpetrators of scams themselves, manipulated into developing relationships with potential investors and convincing them to transfer funds to fraudulent platforms.

Chen Zhi’s activities have caused significant financial damage, with one network alone facilitating the laundering of over $18 million from more than 250 victims in the U.S. The illicit profits were laundered through various means, including cryptocurrency operations and bribery of foreign officials.

The U.S. authorities have taken substantial steps against Chen Zhi, with an indictment that includes charges of wire fraud and money laundering conspiracy. In a historic move, approximately 127,271 bitcoin, valued at around $15 billion, have been seized as part of the largest forfeiture action in U.S. history.

The U.K. has also taken measures, freezing assets linked to the Prince Group, including a £12 million mansion in North London. These actions reflect a broader commitment by international authorities to combat human trafficking and cybercrime, aiming to dismantle operations that thrive on exploitation and deceit.

The implications of these coordinated actions extend beyond immediate financial penalties, as they highlight the need for vigilant compliance and increased scrutiny in financial transactions involving high-risk entities. The crackdown on these criminal networks underscores the global effort to combat human trafficking and cyber fraud, aiming to protect vulnerable individuals from exploitation.