In furtherance of these schemes, Chen and a close network of Prince Group’s top executives used their political influence in multiple foreign countries to protect their criminal enterprise and paid bribes to public officials to avoid disruption by law enforcement. They subsequently laundered the proceeds of the fraudulent schemes through professional money laundering operations and through Prince Group’s own network of ostensibly legal business enterprises, including its online gambling and cryptocurrency mining operations.
At Chen’s direction, Prince Group associates used sophisticated cryptocurrency laundering techniques to obscure the source of fraudulent Prince Group profits, including “spraying” and “funneling” techniques in which large volumes of cryptocurrency were repeatedly disaggregated across scores of virtual currency addresses and then re-consolidated into fewer addresses to obscure the source of the funds. Some of these criminal proceeds were ultimately held in wallets at cryptocurrency exchanges or exchanged for traditional currency and stored in traditional bank accounts. Other criminal proceeds included the Defendant Cryptocurrency, which was stored in unhosted cryptocurrency wallets whose private keys the defendant personally held. Chen maintained diagrams recording the process by which some of the Defendant Cryptocurrency was laundered. Chen boasted to others of Prince Group’s mining businesses that “the profit is considerable because there is no cost” — that is, unlike legitimate enterprises, the operating capital for the cryptocurrency mining businesses comprised money stolen from Prince Group’s many victims.
Chen and his co-conspirators subsequently used some of the criminal proceeds for luxury travel and entertainment and to make extravagant purchases such as watches, yachts, private jets, vacation homes, high-end collectables, and rare artwork, including a Picasso painting purchased through an auction house in New York City.
If convicted, Chen faces a maximum penalty of 40 years in prison.
In parallel with today’s actions by the Department of Justice, the Department of the Treasury today designated Prince Group as a transnational criminal organization and announced sanctions against Chen and multiple associated individuals and entities, for their roles in illicit activity (ofac.treasury.gov/recent-actions). The UK’s Foreign, Commonwealth and Development Office also announced sanctions (gov.uk/government/new).
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