By Vaishali Basu Sharma
The handover of thousands of scamsters to Beijing by Myanmar’s military junta has brought into stark focus the multibillion-dollar fraud industry run by Chinese fugitives operating organized criminal syndicates across Southeast Asia.
On November 21, the Myanmar authorities handed over 31,000 telecom fraud suspects to China, including “financiers” and ring-leaders of crime syndicates that have cheated Chinese citizens of large sums of money.
Just days before this handover, the head of the cybercrime syndicate, Ming Xuechang, aka Myin Shaw Chang, committed suicide as Myanmar’s military junta tightened the noose around him, and China issued warrants for his arrest.
The crackdown on the Chinese criminal syndicates in Myanmar was necessitated because of the sinister proportions that they have reached.
Chinese crime syndicates use industrial-scale call center bases across Southeast Asia for telecoms and online fraud operations. From here, cybercrime hubs and drug and human trafficking operations are undertaken.
Myanmar has emerged as a critical pivot for criminal activities in this extensive network. Ming’s syndicate is one of the several that operate on locations in Myawaddy along the Moei River, Shwe Kokko, Kokang Self-Administered Zone in Shan State, and the Wa-administered city of Mong La on the Chinese border, among others in Myanmar.
These criminal syndicates engage in wide-ranging digital crime that involves romance investment scams, crypto fraud, money laundering, and illegal gambling. But there is a darker side to these criminal syndicates — the trafficking of people, primarily men, who are then coerced into online scam operations and endure inhumane treatment.
Taking advantage of the lack of decent work opportunities and the business shutdowns during the pandemic, Chinese criminal gangs offer attractive jobs to young people who are enticed and then coerced into targeting their compatriots with fake investments, fictional romances, or cash transfers to fake police officers and pyramid investment schemes.
On arrival, the migrant employee is typically received by the traffickers, who take possession of the passport along with their mobile phones. They are then taken to a gated compound, where the scams operate, and heavily armed security guards watch them.
After rendering these victims’ detention incommunicado,’ they are held in a situation of debt bondage, forcing them to perpetuate so-called “pig-butchering,” where they cultivate fake romantic relationships or friendships to defraud online users of significant amounts of money.
The death of 23-year-old teacher Goi Zhen Feng last year, who departed from Malaysia in January for Bangkok to meet an online “girlfriend” but never returned, provides just a glimpse of how this spine-chilling operation works.
In May, his body was recovered from the Thai town of Mae Sot, bordering Myanmar. Although the exact details of how he was killed remain elusive, there is little doubt that he was a victim of Chinese-run scam operations.
According to the Office of the United Nations High Commissioner for Human Rights, the “victims have come from across the ASEAN region (from Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Viet Nam), China (including Hong Kong, Taiwan), as well as countries in South Asia (Bangladesh, India, Nepal, Pakistan), East Africa (Ethiopia, Kenya, Tanzania), Egypt, Turkey and also Brazil.”
To get an idea of the scale of these operations, available data indicates that around 120,000 people are working in the scam rooms of Myanmar and some similarly at least 100,000 in Cambodia. However, similar scam zones are also operating in Thailand and the Philippines.
Reports suggest that scam centers generate billions of dollars across Southeast Asia. Scammers operating in one unnamed Southeast Asian country are estimated to be generating between US$7.5 billion and US$12.5 billion, or half the value of that country’s gross domestic product.
These cyber scams, which run from exclusive zones in China’s southern borders, mainly from Myanmar and Cambodia, are dually dangerous because criminal syndicates extract benefits from both trafficking people and through the use of the victims they traffic to exploit others.
UNODC Regional Representative to Southeast Asia and the Pacific, Jeremy Douglas, told Nikkei Asia, “Trafficking in persons connected to casinos and scam operations run by organized crime has mushroomed across Southeast Asia, particularly in the Mekong.”
For years, Chinese authorities have turned a blind eye to the problem despite being aware that ethnic Chinese fugitives were running these criminal syndicates. But as agencies in Southeast Asian countries become more aware, they are beginning to issue advisories for their citizens and pressuring China to act against the scam networks that are a menace in Asia.
Thai authorities warn its nationals to shun high-paying job offers in Myanmar, saying in a Facebook post, “You might be forced into prostitution, drugs, and debt bondage … they’ll take your passports and you won’t be able to return to Thailand … then they will sell you to another syndicate”.
Lately, though, Chinese law enforcement agencies have intensified cooperation with Southeast Asian counterparts to address the scourge of transnational crime, money laundering, illicit drug production, human trafficking, and cyber scams.
Zachary Abuza of the National War College, Washington, believes it’s a case of “kill the chicken to scare the monkeys.” Acting selectively, Beijing is taking action on syndicates that are preying primarily on Chinese nationals and, at the same time, garnering diplomatic praise.
The transnational organized crime activities of ethnic Chinese-run groups constitute a severe threat to societies, especially in Southeast Asia, where they have a firm grip, causing alarm among law enforcement officials in host countries.
Earlier this month, Singapore busted what it describes as “one of the world’s biggest money-laundering cases.” It seized more than US$2 billion in luxury properties, cars, gold bars, and cash to counter a considerable surge in money laundering also linked to organized crime by ethnic-Chinese gangs.
- Vaishali Basu Sharma is an analyst of strategic and economic affairs. She has worked as a consultant with India’s National Security Council Secretariat (NSCS) for nearly a decade. She is presently associated with the New Delhi-based think tank Policy Perspectives Foundation.
- The author can be reached at postvaishali (at) gmail (dot) com.