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Prison complexes in disputed territories are the center of global online fraud.
According to a study by the US Institute of Peace (USIP), annual revenues from organized fraud operations in Southeast Asia amount to about $64 billion. In Cambodia, Laos and Myanmar, fraudsters earn about $43.8 billion a year, which is about 40% of the combined GDP of the three countries.
Fraud involves the Pig Butchering method, where attackers contact a potential victim via instant messengers or dating apps, develop relationships with her, convince her to make investments on fake crypto exchanges, and then disappear along with the money of the gullible victim.
Geography of the problem and its expansion
It is noted that the problem has grown from regional to global in a very short time. Criminals are expanding their activities to countries in the Middle East and Africa, using the same methods. Moreover, the number of victims who do not speak Chinese has recently increased, which may be due to the increased attention of Chinese law enforcement agencies to this problem.
Last year, such scams resulted in losses of $3.5 billion in the United States, with Canadians losing about $413 million and Malaysians losing more than $750 million.
Human trafficking and forced labor
Thousands of people fall into the trap of fraudulent ads for high-paying jobs, after which they are forcibly detained in secure complexes and forced to engage in fraud under the threat of physical violence. Victims of forced labor come from more than 60 countries. In Myanmar, fraud centers are protected by the armed forces, in Cambodia-criminal structures use hotels and casinos that were emptied after the pandemic, and in Laos – specialized economic zones.
Researchers note that such complexes resemble prisons with high walls, bars on the windows, video surveillance and armed guards. Corruption is a key factor that allows organized crime to flourish.
It is noted that in Myanmar, fraudulent centers have become a key factor in the internal conflict. In some regions, fraudulent complexes are located in the zone of active hostilities between anti-government forces and the military. The proceeds of fraud help support the ruling elites and the military, which leads to increased protection of these centers.
Anti-fraud measures
The researchers recommend coordinated measures to combat fraud, such as imposing sanctions and travel bans on syndicate leaders, holding accountable countries that allow fraudulent complexes to exist, and considering punishing social networks that promote money laundering or advertise resources for fraud.
Earlier, China announced the beginning of cooperation with the authorities of Thailand and Laos to combat cybercrime gangs from Myanmar. Recently, they have often targeted Chinese citizens and organizations.
In addition, a newly built "fraud factory" on the Myanmar-Thailand border has earned almost $100 million in less than 2 years. Details about the activities of online criminals were revealed during a joint investigation of the Chainalysis service and the human rights organization International Justice Mission.
Recall that since the summer of 2023, China has been insistently demanding that the Myanmar authorities take tough measures against the numerous enclaves of cyber scammers operating in the border areas. The reason was a wave of fraud using the scheme of "pig butchering" (pig butchering), the victims of which were citizens of the People's Republic of China. The activities of criminal enclaves in Myanmar's border areas were based on the use of forced labor of people illegally brought there from neighboring countries.
A coalition of rebel groups in Myanmar recently successfully took control of the city of Laukkai, known as a major center of cyber fraud in the region, which affected countries, including those bordering Myanmar. The rebel coalition has clearly set out its goal — to root out organized fraudulent operations that were spread under the strict supervision of local law enforcement officers loyal to the ruling junta.
According to a study by the US Institute of Peace (USIP), annual revenues from organized fraud operations in Southeast Asia amount to about $64 billion. In Cambodia, Laos and Myanmar, fraudsters earn about $43.8 billion a year, which is about 40% of the combined GDP of the three countries.
Fraud involves the Pig Butchering method, where attackers contact a potential victim via instant messengers or dating apps, develop relationships with her, convince her to make investments on fake crypto exchanges, and then disappear along with the money of the gullible victim.
Geography of the problem and its expansion
It is noted that the problem has grown from regional to global in a very short time. Criminals are expanding their activities to countries in the Middle East and Africa, using the same methods. Moreover, the number of victims who do not speak Chinese has recently increased, which may be due to the increased attention of Chinese law enforcement agencies to this problem.
Last year, such scams resulted in losses of $3.5 billion in the United States, with Canadians losing about $413 million and Malaysians losing more than $750 million.
Human trafficking and forced labor
Thousands of people fall into the trap of fraudulent ads for high-paying jobs, after which they are forcibly detained in secure complexes and forced to engage in fraud under the threat of physical violence. Victims of forced labor come from more than 60 countries. In Myanmar, fraud centers are protected by the armed forces, in Cambodia-criminal structures use hotels and casinos that were emptied after the pandemic, and in Laos – specialized economic zones.
Researchers note that such complexes resemble prisons with high walls, bars on the windows, video surveillance and armed guards. Corruption is a key factor that allows organized crime to flourish.
It is noted that in Myanmar, fraudulent centers have become a key factor in the internal conflict. In some regions, fraudulent complexes are located in the zone of active hostilities between anti-government forces and the military. The proceeds of fraud help support the ruling elites and the military, which leads to increased protection of these centers.
Anti-fraud measures
The researchers recommend coordinated measures to combat fraud, such as imposing sanctions and travel bans on syndicate leaders, holding accountable countries that allow fraudulent complexes to exist, and considering punishing social networks that promote money laundering or advertise resources for fraud.
Earlier, China announced the beginning of cooperation with the authorities of Thailand and Laos to combat cybercrime gangs from Myanmar. Recently, they have often targeted Chinese citizens and organizations.
In addition, a newly built "fraud factory" on the Myanmar-Thailand border has earned almost $100 million in less than 2 years. Details about the activities of online criminals were revealed during a joint investigation of the Chainalysis service and the human rights organization International Justice Mission.
Recall that since the summer of 2023, China has been insistently demanding that the Myanmar authorities take tough measures against the numerous enclaves of cyber scammers operating in the border areas. The reason was a wave of fraud using the scheme of "pig butchering" (pig butchering), the victims of which were citizens of the People's Republic of China. The activities of criminal enclaves in Myanmar's border areas were based on the use of forced labor of people illegally brought there from neighboring countries.
A coalition of rebel groups in Myanmar recently successfully took control of the city of Laukkai, known as a major center of cyber fraud in the region, which affected countries, including those bordering Myanmar. The rebel coalition has clearly set out its goal — to root out organized fraudulent operations that were spread under the strict supervision of local law enforcement officers loyal to the ruling junta.
