PHNOM PENH, Cambodia — Authorities in Cambodia have transferred a businessman to China where he faces allegations connected to an enormous international online fraud scheme worth billions of dollars, according to government officials.
Li Xiong, who holds dual Chinese-Cambodian citizenship and previously served as Huione Group’s chairman, was taken into custody in Cambodia by a combined law enforcement team after a months-long investigation, the Interior Ministry confirmed.
Chinese authorities suspect Li of participating in multiple criminal activities including running illegal gambling operations, conducting fraudulent schemes, operating unlawful businesses and hiding criminal proceeds, China’s official Xinhua news agency reported, referencing Beijing’s Ministry of Public Security.
Investigators believe Li held a senior position within a crime organization headed by Chen Zhi, who established the Prince Holding Group business and banking empire and stands accused of orchestrating the online fraud network. Chen was transferred to China in January. Both individuals lost their Cambodian citizenship before being sent to China. The companies they legitimately owned have rejected any allegations of criminal activity.
Federal prosecutors in the United States filed conspiracy charges against Chen in October, claiming he directed an international fraud network while using his other business ventures to clean the illegal profits. According to the U.S. criminal charges, Chen boasted of earning $30 million daily from the fraudulent schemes.
Online criminal activity has expanded rapidly across Southeast Asia in recent years, especially in Cambodia and Myanmar, with illegal operations generating enormous profits from victims across the globe, according to United Nations specialists and other experts.
The criminal enterprise is deeply connected to human trafficking, with foreign workers forced to operate romance and digital currency scams, frequently after being lured with fake employment opportunities and then compelled to work under slave-like conditions.
The U.S. Treasury Department has accused Huione Group of cleaning billions of dollars for international criminal groups, including North Korean computer hackers and Southeast Asian fraud networks. Treasury officials labeled Huione a “primary money-laundering concern,” limiting any ties to the U.S. financial system and barring American financial institutions from conducting business with the company.
Cambodia’s National Bank canceled the license of the organization’s digital payment division, Huione Pay, because of violations and its participation in an “illicit online marketplace” that enabled billions in criminal transactions.
Cambodian legislators approved new laws on Monday targeting online fraud operations with penalties up to life imprisonment after the government promised to eliminate such operations by April’s end.
