Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: This January, Chinese state media treated viewers to a gripping
Speaker 2: spectacle the arrest and public humiliation of a tycoon and
Speaker 2: suspected master criminal Chan Ju.
Speaker 1: If you watch the footage, you see that the gods
Speaker 1: in the swat Gea have changed him into the prison
Speaker 1: garb and they're placing the black bag over his head.
Speaker 1: His arms are in shackles.
Speaker 2: David Ramley is a Bloomberg investing reporter based in Singapore.
Speaker 2: He watched the footage of Chun's extradition from Cambodia. A
Speaker 2: team armed with automatic weapons leads Chun onto the plane, and.
Speaker 1: Then it's later when he comes off the plane, they
Speaker 1: take the bag off and his eyes are just staring
Speaker 1: at the ground and clearly he realizes this is a
Speaker 1: very different scenario to what he had expected.
Speaker 2: Chen allegedly ran a criminal network in Cambodia for more
Speaker 2: than a decade. His businesses were believed of used forced
Speaker 2: labor and were said to have defrauded people all over
Speaker 2: the world of billions of dollars. A lot of countries
Speaker 2: had their eyes on him, including the US's Federal Bureau
Speaker 2: of Investigation.
Speaker 1: Different governments have different accusations regarding Chen and his organization.
Speaker 1: Most of it revolves around money laundering. Some of the
Speaker 1: accusations say what he was laundering with proceeds of crime,
Speaker 1: and a lot of that crime relates to a mix
Speaker 1: of online gambling scam centers.
Speaker 2: Chun's arrest and extradition was a dramatic reversal of fortune.
Speaker 2: He had spent years living a billionaire's life in Singapore, London,
Speaker 2: Taipei and Hong Kong. He cruised with politicians on his
Speaker 2: super yacht and were chauffeured around in luxury cars. So
Speaker 2: what change that led to this abrupt and sudden downfall.
Speaker 1: I think it was a mix of various factors. On
Speaker 1: the one hand, you had rising pressure from the Americans.
Speaker 1: They clearly sanctioned it, huge number and a huge array
Speaker 1: of his organization. Chinese authorities also had been ramping up pressure,
Speaker 1: and Cambodia basically had to act. All the things that
Speaker 1: Chen had used to maintain his support for so long
Speaker 1: within the Cambodian regime. All the things that had kept
Speaker 1: him operating now coalesced into unstoppable pressure.
Speaker 2: Welcome to the Big Take Asia from Bloomberg News I'm Wanha.
Speaker 2: Every week we take you inside some of the world's
Speaker 2: biggest and most powerful economies and the markets, tycoons, and
Speaker 2: businesses that drive this ever shifting region. Today in the
Speaker 2: show The Rise and Fall of Chen Chu, the tycoon
Speaker 2: who allegedly built an empire on scams, trafficking and political protection.
Speaker 2: How he suspected criminal network earning tens of millions of
Speaker 2: dollars a day suddenly crumbled and what led to a
Speaker 2: swift downfall. By any account, the Rise of Chinju was
Speaker 2: meteoric born in nineteen eighty seven in Fujin, a southern
Speaker 2: coastal province of China. He got a start in business
Speaker 2: running an internet cafe and gaming center.
Speaker 1: When he started in Fujin, to the best of our
Speaker 1: knowledge and according to his own family offices now deleted biography,
Speaker 1: he was just another kid worked with his father in
Speaker 1: the family business before eventually getting into internet cafes, and
Speaker 1: at a very young age I think circa twenty four
Speaker 1: he went off to Cambodia to seek a new fortune.
Speaker 2: In twenty fourteen, Chen appears to found a way to
Speaker 2: acquire Cambodian citizenship under foreign Investor program. Soon after, he
Speaker 2: founded Prince real estate.
Speaker 1: Well. At first his empire in Cambodia was probably relatively modest.
Speaker 1: He was doing property development, he was doing certain buildings,
Speaker 1: business parks, et cetera. But quickly he managed to flip
Speaker 1: these into much larger enterprises. There was a downturn around
Speaker 1: the early time that he was there, and a lot
Speaker 1: of Chinese entrepreneurs and investors actually left Cambodia because they
Speaker 1: found it a little bit too risky. He doubled down,
Speaker 1: and in doing so he really established himself as a
Speaker 1: key player.
Speaker 2: Prince real Estate quickly became a household name across Cambodia.
Speaker 2: As Chen's wealth grew, it expanded into a full blown conglomerate.
Speaker 1: He started building casinos, he scited building hotels, restaurants, He
Speaker 1: even got into a wide variety of services. By the
Speaker 1: end of his time, he had Prince Bank, which actually
Speaker 1: had about a billion dollars in deposits from various clients.
Speaker 2: And then at some point he's alleged to ventured into
Speaker 2: a lot of illicit operations as well.
Speaker 1: Right, so, a lot of the accusations from both the
Speaker 1: NGOs as well as from researchers, journalists, the US agencies
Speaker 1: such as the FBI Center on the dual use aspect
Speaker 1: of his empire, and inside of those office buildings were
Speaker 1: his operations, allegedly for running scams targeting citizens all over
Speaker 1: the world out of billions and billions of dollars. That
Speaker 1: money would often be funneled into the purchase of crypto
Speaker 1: mining equipment, and then the crypto mining equipment was harvesting
Speaker 1: huge amounts of crypto which was then ostensibly clean, and
Speaker 1: that's one of the key ways that he allegedly launded money.
Speaker 2: During those years, Prince Group built business campuses and poured
Speaker 2: money into transforming a Cambodian port city called Seannoukville into
Speaker 2: a gambling hotspot with numerous casinos and hotels. Investigators alleged
Speaker 2: some of these sites became notorious scam hubs. One of
Speaker 2: them was a place called Mingo Park.
Speaker 1: Once upon a time, it was a farm of mangoes,
Speaker 1: and then they turned it into a processing center for mangoes,
Speaker 1: and then they basically built over it a series of
Speaker 1: office buildings. There are many facilities filled with thousands of
Speaker 1: workers who are actively scammed people all over the world,
Speaker 1: according to various indictments and accusations.
Speaker 2: The allegations against Chen say, workers from across the world
Speaker 2: worked in shifts around the clock in these complexes to
Speaker 2: scam overseas victims out of money. The scheme is known
Speaker 2: as pig butchering. That's a reference to fattening pigs before slaughter.
Speaker 1: These range the gamut from your average love interest scam,
Speaker 1: where somebody claims to be a potential wife or a
Speaker 1: potential husband for someone who's perhaps a little bit lonely,
Speaker 1: to the classic Nigerian prince scam, where someone claims that
Speaker 1: they have a huge fortune awaiting you if only you
Speaker 1: jump through a series of hoops. And in other cases
Speaker 1: there are investment scams where they claim to be very
Speaker 1: successful in investment brokers who take your money and can
Speaker 1: triple or could ruple your funds if you use their
Speaker 1: platform to do so. And in all of these cases
Speaker 1: allegedly it's simply a way of extracting money from people's
Speaker 1: bank accounts.
Speaker 2: And David, what was life like for these workers, many
Speaker 2: of whom, as as you said, were likely trafficked. What
Speaker 2: kind of conditions were they living and working under.
Speaker 1: Well, it's not quite black and white. It's actually quite fascinating.
Speaker 1: Many of the workers really were paid They were salaried
Speaker 1: employees who knew what they were doing, but many others
Speaker 1: were not. They had come under false pretenses. Some had
Speaker 1: thought they were working normal it jobs. They were brought in,
Speaker 1: they were taken to the room, and if they performed well,
Speaker 1: they actually got paid. Sometimes they got bonuses. In other cases,
Speaker 1: if they did not perform well, if they constantly or
Speaker 1: even occasionally made mistakes, they were often punished. And the
Speaker 1: indictment details some of these alleged punishments, beatings being meted out,
Speaker 1: people being hunted down.
Speaker 2: And how lucrative david were these scam centers well.
Speaker 1: According to the indictment, one of the key lieutenants boasted
Speaker 1: in text messages that the operation was generating in excess
Speaker 1: of thirty US million dollars per day. That's only in
Speaker 1: twenty eighteen.
Speaker 2: And obviously you can't build a business empower like Chens
Speaker 2: of this scale without connections. How well connected politically was
Speaker 2: he in Cambodia.
Speaker 1: Chen was incredibly well connected to the highest levels of
Speaker 1: politics and power in Cambodia. There are a variety of
Speaker 1: ways to illustrate this, but I'll give you one. Twenty
Speaker 1: twenty two, on a state visit to Cuba. Chen's right
Speaker 1: there in videos that you can look up right now
Speaker 1: on former Prime Minister Hunsen's personal official, verified Facebook page.
Speaker 2: Chen used his growing wealth to build political influence and
Speaker 2: styled himself as a philanthropist. He donated trucks to Cambodia's
Speaker 2: National Police, handed out scholarships, and gave about two million
Speaker 2: dollars to the Cambodian Red Cross, which is overseen by
Speaker 2: Boon Rannie, the wife of longtime leader Hunsen. And when
Speaker 2: Chun got wind of then Prime Minister Hunsen's fondness for
Speaker 2: luxury watches, he leveraged that too and set up a
Speaker 2: specialty watch making school.
Speaker 1: Prince Horology was the watch school that he set up
Speaker 1: and produced the watches that hun Sen handed out to
Speaker 1: world leaders during the Asian Meeting. If you go to
Speaker 1: the government collections of the US government, the Canadian government,
Speaker 1: and the Australian government, you will find risk watches with
Speaker 1: Prince Horology and his personal logo etched into the equipment. There.
Speaker 2: By twenty twenty, Chen had reached the absolute pinnacle of
Speaker 2: Cambodian society, and thanks to his high powered political connections,
Speaker 2: Chen and his businesses were shielded and they flourished for
Speaker 2: more than a decade.
Speaker 1: Well, according to people we've spoken to, it was definitely
Speaker 1: a fact that if you moved against Chen, it was
Speaker 1: seen as you moving against Cambodia. And you have to
Speaker 1: remember the geopolitics of the time. Everyone wanted Cambodia to
Speaker 1: be on its side in this new Cold War scenario,
Speaker 1: and none wanted to offend hun Sen, Hunmanette or the
Speaker 1: senior politicians of Cambodia protected.
Speaker 2: Chen allegedly built one of the biggest scam syndicates in
Speaker 2: the world. The combination of money from princes, legitimate and
Speaker 2: illicit businesses made Chen extremely rich, and he moved money
Speaker 2: offshore and began spending it.
Speaker 1: He led the life of a global billionaire in cities
Speaker 1: all over the planet. He had properties in Hong Kong,
Speaker 1: he had properties in Tokyo, he had properties in Singapore, London,
Speaker 1: you name it. He had a fifty four meter super yacht,
Speaker 1: and that was only one of several yachts that he
Speaker 1: owned or controlled. And on those yachts he would host
Speaker 1: highly elaborate parties. We're not talking normal parties that you
Speaker 1: and I might attend. We're talking parties with free flowing
Speaker 1: whiskey aged for many, many decades, costing thousands of dollars
Speaker 1: per dram Cuban cigars of every vintage you can imagine.
Speaker 2: I mean, the fact that there was so much money
Speaker 2: flowing from Prince Group did that raise any alarm at
Speaker 2: any of the banks.
Speaker 1: Certainly? What I found fascinating was that several banks actually
Speaker 1: filed suspicious transaction reports against him, and they filed that
Speaker 1: with various regulators, not just in Singapore, Bitalsho, in Taiwan, etc.
Speaker 1: The fact that they themselves found him triggering so many
Speaker 1: red flags that they shuttered his accounts shows that many
Speaker 1: banks knew something was up. But because there was no
Speaker 1: way for the banks to warn each other for quite
Speaker 1: fair privacy reasons, and because the state was not empowered
Speaker 1: in some ways to warn other banks when a separate
Speaker 1: bank can close someone's accounts, he was simply able to
Speaker 1: spin up new bank accounts at other institutions and continue
Speaker 1: transferring money all over the world.
Speaker 2: Chen could not be reached for comment. A spokesperson for
Speaker 2: the Prince Companies, who asked to be unnamed for safety reasons,
Speaker 2: denied the allegations from the US and UK against Chen,
Speaker 2: and said the US Department of Justices, legal filings contained inconsistencies, falsehoods,
Speaker 2: and egregious overreach. After the break, how international pressure from
Speaker 2: across the globe triggered Chen's sudden downfall. Countries have ways
Speaker 2: of recognizing those who've made exceptional contributions. In the US,
Speaker 2: the president gives out Presidential Medals of Freedom. In the UK,
Speaker 2: there's knighthoods. In Cambodia, one of the greatest honors that
Speaker 2: a civilian can receive is the title of nik ogna,
Speaker 2: equivalent to a lord, and in July twenty twenty, the
Speaker 2: King bestowed that title on Chen Ju. It was a
Speaker 2: remarkable achievement, but at the very point that Chen had
Speaker 2: reached these dizzying heights, events were in play to bring
Speaker 2: him down. Chen's alleged criminal enterprises benefited from the COVID
Speaker 2: nineteen penceandemic. People spent more time online and the pool
Speaker 2: of potential scam victims widened, and according to experts, Chen
Speaker 2: and the Prince Group were just one part of a
Speaker 2: broader network of scam operations across Cambodia and the region,
Speaker 2: but as a number of victims likely millions worldwide, from
Speaker 2: the US to China, began to grow, so did scrutiny.
Speaker 2: Law enforcement agencies had already caught a scent of what
Speaker 2: Chen was up to, and in twenty twenty Chinese authorities
Speaker 2: set up a task force to investigate the Prince group
Speaker 2: in Cambodia, but real international pressure didn't come until the
Speaker 2: end of last year.
Speaker 1: In October, the US and UK governments finally decided to
Speaker 1: take action against him, and comprehensive action, I should say.
Speaker 1: They sanctioned over one hundred different entities all over the world,
Speaker 1: and many of these were controlling entities used to run
Speaker 1: companies in other parts of the world. It was a
Speaker 1: real shock to the system, especially for the Asian law
Speaker 1: enforcement organizations. They actually had not been made aware that
Speaker 1: these sanctions were about to hit, so it was only
Speaker 1: after the sanctions were announced that governments in Hong Kong, Singapore,
Speaker 1: Taiwan and elsewhere started to take some serious action and
Speaker 1: seized assets ranging from cause to jewelry to gold and property.
Speaker 2: US federal prosecutors also revealed that they had seized nearly
Speaker 2: one hundred and thirty thousand bitcoins Chun once controlled. That's
Speaker 2: a record hall then worth fifteen billion dollars. This week,
Speaker 2: lawyers for Chen filed emotion in a New York court
Speaker 2: to dismiss the US government seizure of a hall of
Speaker 2: bitcoin it's linked to him. The lawyers argued that many
Speaker 2: of the allegations against Chen are provably and obviously false,
Speaker 2: and that accusations he oversaw scam compounds were non specific
Speaker 2: statements and background commentary about conditions in Cambodia. They raised
Speaker 2: questions about the timeline if the cryptocurrency seizure, and said
Speaker 2: the bitcoin couldn't possibly have been the proceeds of fraud
Speaker 2: or money laundering. Last year, tensions between Thailand and Cambodia
Speaker 2: escalated to deadly violence along the border, and in the
Speaker 2: lead up to Thailand's elections, scam centers around the region
Speaker 2: became a hot button issue in the campaigns.
Speaker 1: The Thai government had turned it into a war on
Speaker 1: the scams. They had actually actively bombarded scam centers on
Speaker 1: the border with Thailand. They were illustrating to the international
Speaker 1: public the extent of the scam activity targeting citizens around
Speaker 1: the world.
Speaker 2: At this point, Chun's operations had become too big and
Speaker 2: his victims too numerous to ignore. President Trump himself even
Speaker 2: got involved, forcing Cambodia to crack down on scam centers
Speaker 2: that target Americans. He explicitly made it a part of
Speaker 2: a deal for lower tariffs.
Speaker 1: This was just a series of unfortunate for him events
Speaker 1: that came together. It's hard for him to predict that
Speaker 1: the Americans would suddenly do such a thing. It's hard
Speaker 1: for him to predict that the Ties would use scam
Speaker 1: activities as a key tent pole for justifying their invasion
Speaker 1: of Cambodian alleged territory.
Speaker 2: And while the Americans were honing in on Chen and
Speaker 2: his suspected scam centers, China was also making progress on
Speaker 2: its investigation. For weeks, some of Chen's staff were expecting
Speaker 2: Cambodia to reach a deal with China that would result
Speaker 2: in just a slap on the wrist for Chen. But
Speaker 2: the end when it came, was sudden. In a late
Speaker 2: night statement on January seventh, Cambodia announced that Chen and
Speaker 2: two others had been arrested and immediately extradited. Since his
Speaker 2: arrest and extradition, what do we know of the operations
Speaker 2: of Prince Group now with him out of the picture.
Speaker 1: Well, we understand that the operations of Prince Group are
Speaker 1: much depleted. Several organizations that were in full swinging operation
Speaker 1: before he was arrested, such as Prince Bank, Prince Real Estate,
Speaker 1: Prince Horology, the Watchmaking School, were all curtailed or shut down.
Speaker 2: Now, these kinds of scam centers which are prevalent in
Speaker 2: parts of Asia, they often depend on trafficed workers. Cambodia
Speaker 2: shut down a number of these centers. What happens to
Speaker 2: these workers now.
Speaker 1: Well, what's happened since Chen's arrest has been remarkable. We've
Speaker 1: seen a lot of scam centers throughout Cambodia emptying out
Speaker 1: streams of people from all over the world India, Indonesia, China,
Speaker 1: other parts, queueing out in front of their country's embassies,
Speaker 1: trying to get home, saying that they had escaped and
Speaker 1: wanting to get a ticket back to their place of birth.
Speaker 1: But what we've also heard is that a lot of
Speaker 1: centers are allegedly still in operation. They've simply quietened down.
Speaker 1: According to one of the senior minute we've spoken to,
Speaker 1: scam activity is down fifty percent in Cambodia. Now we
Speaker 1: don't know exactly what that refers to, is that the
Speaker 1: number of scammers in countries the number of scam operations
Speaker 1: or the revenue lost. But it shows that even by
Speaker 1: the Cambodian government's own admission, there's still a substantial amount
Speaker 1: of scam activity happening today right now.
Speaker 2: At the end of the day, David says, scamming is
Speaker 2: just too lucrative for criminals to resist, and these scammer
Speaker 2: networks are like hydras. You cut off one head, but
Speaker 2: others are ready to emerge and replace them.
Speaker 1: I think the main thing standing in the way of
Speaker 1: shutting down all of these scam centers is greed. The
Speaker 1: huge amount of money that they are able to generate
Speaker 1: is liable to create corruption in any market, let alone
Speaker 1: emerging markets in frontier markets. Basically, the only way this
Speaker 1: gets shut down is if you have clean government willing
Speaker 1: to take drastic action against some of the most senior
Speaker 1: members of your own country, both in business, politics, and
Speaker 1: perhaps other spheres of influence. And that's a hard task.
Speaker 1: I think one unanimous thing we've heard from every expert
Speaker 1: is that this is not the end of scams either
Speaker 1: in Southeast Asia of all the world. This industry will
Speaker 1: continue and they will continue to be victims. Now how
Speaker 1: successful those efforts are in shutting down these centers that
Speaker 1: remains to be seen and coordinated action can make a
Speaker 1: real impact on that.
Speaker 2: This is The Big Take Asia from Bloomberg News. I'm
Speaker 2: wanh To get more from The Big Take and unlimited
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