Two alleged criminal masterminds built a London property empire and bought a Picasso, yachts and private jets after making billions from one of “the largest frauds in history”, it has been claimed.
Chinese-born Chen Zhi, head of a Cambodian-based multinational company, and Qiu Wei Ren, his alleged co-conspirator, are said to have been secretly operating romance scams and other swindles that defrauded billions of pounds from thousands of victims, including in the UK and the US.
US and UK investigators said Chen alone amassed a fortune of at least £11bn from “industrial scale” fraud, including a £12m mansion in north London, a £100m office block in the City and 17 flats in New Oxford Street and Nine Elms in south London.
The pair used some of the criminal proceeds for luxury travel and “extravagant” purchases such as watches, yachts, private jets, holiday homes and rare artwork, including a Picasso painting bought through an auction house in New York, according to the US Department of Justice.
There was a heavy police presence at a property owned by Chen in Avenue Road in St John’s Wood, north London yesterday
The allegations against the two men emerged on Tuesday when they were added to the UK sanctions list, with all of their assets in the UK and US frozen as part of an international crackdown on their empire.
Yvette Cooper, the Foreign Secretary, said: “The masterminds behind these horrific scam centres are ruining the lives of vulnerable people and buying up London homes to store their money.
“Together with our US allies, we are taking decisive action to combat the growing transnational threat posed by this network – upholding human rights, protecting British nationals and keeping dirty money off our streets.”
Joseph Nocella, the US attorney for the Eastern District of New York, said: “As alleged, the defendant directed one of the largest investment fraud operations in history, fueling an illicit industry that is reaching epidemic proportions.”
As chairman of Prince Group, a Cambodian-based company, Chen, 38, ostensibly focused on real estate development, financial and consumer services in 30 countries.
10 Fenchurch St, a commercial property in the City of London bought by Chen for £95m five years ago – Michael Foley/Alamy
But US prosecutors claim Prince Group was secretly trafficking hundreds of people and forcing them to work in compounds where they had to execute scams, including romance frauds, often under the threat of violence.
The compounds housed vast dormitories surrounded by high walls and barbed wire, and functioned as violent forced labour camps, which US prosecutors say Chen was directly involved in managing.
Chen kept documents on the “phone farms”, automated call centres that used millions of mobile phone numbers to facilitate their fraudulent schemes, it is alleged.
“The defendant [Chen] was directly involved in using violence against the individuals within the forced labour camps and possessed images of Prince Group’s violent methods, including photographs depicting beatings and other methods of torture,” claimed the US prosecutors.
“The defendant communicated directly with his subordinates about beating individuals who ‘caused trouble’ – in one case specifying that the victims should not be ‘beaten to death’.”
Chen and his associates are alleged to have used their political influence in multiple countries to protect their criminal enterprise and paid bribes to public officials to keep law enforcement at bay.
The prosecutors said Chen and his associates used sophisticated cryptocurrency laundering techniques to hide their criminal profits.
Victims targeted around world
Prince Group schemes are alleged to have targeted victims around the world with help from local networks working on its behalf.
The Foreign Office said the scams often involved building online relationships to convince targets to “invest” increasingly large sums of money into fraudulent cryptocurrency investment schemes.
The proceeds were then laundered using a sophisticated financial ecosystem that included seemingly legitimate front businesses and online gambling platforms.
The Foreign Office said the scam centres in Cambodia, Myanmar and across the region used fake job adverts to attract foreign nationals to disused casinos or purpose-built compounds, where they were forced to carry out online fraud under threat of torture.
Lord Hanson, the fraud minister, said the sanctions against Chen and his associates “prove our determination to stop those who profit from this activity, hold offenders accountable, and keep dirty money out of the UK”.
Chen, whose whereabouts are unknown, could face a maximum sentence of 40 years in jail.
