Fraud in Southeast Asia represents a growing regional security threat

Fraud centers operating from Myanmar, Cambodia and Laos accounted for US$39 billion (S$50.1 billion) in stolen funds by the end of 2023, according to a report released in May by the US Institute of Peace (USIP).

Law enforcement authorities in China and other countries are increasingly concerned about the impact of this transnational organized crime, which accounts for a significant portion of the GDP of some countries such as Laos and extends into areas actually controlled by armed groups.

While Myanmar, Cambodia and Laos are the epicenters of the criminal industry, this crime also operates from other locations.

In the Philippines, hundreds of people were rescued in March from a romance scam or “pig slaughter center” about 100 km north of Manila that posed as an online gambling company, authorities said. Police said they rescued 383 Filipinos, 202 Chinese and 73 other foreigners.

Employees of these fraud centers are often lured or trafficked there from low-employment countries such as India, Pakistan, Bangladesh, the Philippines and even African countries to essentially work as forced laborers. Some fraud centers host thousands.

Experts say sporadic raids, like those recently seen in Laos’ notorious Golden Triangle Special Economic Zone (GTSEZ), are often choreographed in advance so bosses can evade them.

For example, Zhao Wei, a Chinese organized crime boss operating in the GTSEZ, appears to remain unharmed.

The “Zhao Wei Transnational Criminal Organization” was sanctioned by the US Treasury Department’s Office of Foreign Assets Control (OFAC) in 2018.

“Based in Laos in the Golden Triangle Special Economic Zone… the Zhao Wei TCO exploits this region by engaging in drug trafficking, human trafficking, money laundering, bribery and wildlife trafficking, much of which is facilitated by the Kings Romans Casino.” within the GTSEZ,” says the US Treasury Department’s designation.

Fraud centers have targeted people in over 100 countries around the world, with the average victim losing more or less all of their assets, Mr. Jason Tower, country director of the Burma program at USIP, told the Asian Insider Podcast this week.

Losses ranged from $100,000 to $300,000 and sometimes as high as $50 million, Mr. Tower said.

“This is a massive transfer of wealth to malign actors in Southeast Asia – actors who undermine governance, corrupt actors … who also have close ties to militia groups,” he said. “There are people being targeted all over the world and countries are unable to protect their nationals from these scams.

“Secondly, these are forced labor camps. According to the United Nations, there are hundreds of thousands of people who, according to USIP’s own research, have been tricked or deceived or trafficked into these large fraud complexes,” he said.

“In order to lock people in the buildings, the buildings generally have to be securitized. Many of them are located on borders, often in places where there are very weak states or that really do not have strong or fragmented state sovereignty,” he added.

At Thailand’s borders, for example, fraud sites are very well guarded by the Myanmar military’s Border Guard Force, and in other places such as the GTSEZ in Laos, well-armed private security guards guard them, he noted.

Malaysia – as ASEAN’s next chair in 2025 – has an opportunity to show leadership here, he suggested, particularly as next year marks the 10th anniversary of the Kuala Lumpur Declaration to combat transnational crime.

“This is a sovereignty issue,” Mr. Tower told Asian Insider. “In places like Myanmar you see these criminal groups controlling large areas. And I don’t think most countries in the region will have much interest in it in the long term.”

Host: Nirmal Ghosh ([email protected])

Produced and edited by: Fa’izah Sani

Follow Nirmal Ghosh on X:

Read Nirmal Ghosh’s articles:

Sign up for the Asian Insider newsletter:

Follow Asian Insider on Fridays here:

Channel:

Apple Podcasts:

Spotify:

Feedback to: [email protected]

—

Follow other ST podcast channels:

All in One ST Podcasts Channel:

ST podcast website:

ST Podcasts YouTube:

—

Get The Straits Times app, which has its own podcast player section:

The App Store:

Google Play: