The US Department of the Treasury and the UK’s Foreign, Commonwealth, and Development Office (FCDO) have jointly taken action to address a pig butchering operation in Cambodia.
The online affinity scams frequently utilize crypto to steal funds from their targets. Treasury’s Office of Foreign Assets Control (OFAC) and Financial Crimes Enforcement Network (FinCEN) worked with FCDO to apply sanctions on 46 targets within the Prince Group Transnational Criminal Organization (Prince Group TCO).
Among the Prince Group’s scam locations are those said to be under the umbrella of Jin Bei Group, a luxury hotel and casino company that also operates a series of compounds throughout Cambodia.
OFAC designated a network of 117 Prince Group-related businesses as criminal organizations.
The Prince Group is said to be led by Chen Zhi, a 38-year-old Chinese émigré who renounced his Chinese citizenship. Zhi apparently also operated in Palau, where they allegedly worked with known organized crime facilitators, leased an island, and set up resorts. The Prince Group is also said to be in cahoots with criminal groups in mainland China.
Additionally, FinCEN cut the Huion Group off from the U.S. financial system, stating that this Cambodian entity had laundered crypto stolen from these pig butchering scams.
The US government estimates that over $16 billion has been lost to these online scams in the “last several years.”
The sanctions were accompanied by a criminal indictment in the U.S. District Court for the Eastern District of New York against Chen Zhi.
Richard Graham, Director of KYC and Financial Crime at Moody’s, said these scam centers often involve bogus romance where targets are lured into a relationship online and then manipulated.
“The U.S. and UK sanctions are significant because they shift accountability to the owners of these scam centers, rather than the victims who are coerced into criminal activity by organized groups,” said Graham. “It’s critical for companies to mitigate reputational risk, prevent financial crime, and comply with regulatory requirements. This involves using tools that can trace ownership structure,s including shell companies, front organizations, sanctioned entities, and politically exposed persons.”
Pig Butchering is a confidence scam where perpetrators target unsuspecting individuals and, over time, create a relationship with their marks, which eventually may lead to the theft of money. Treasury shares that frequently, the actual scammers are victims themselves, as they are forced labor or have been subjected to human trafficking.