Organized criminal groups from China operating on the Thai-Myanmar border are threatening internet users worldwide with online scams and financial fraud, using trafficked “cyber slaves” to carry out their crimes, according to a by the congressionally established United States Institute of Peace in Washington.
The groups have been pushed out of China by Chinese authorities and are now operating in bordering Southeast Asian countries such as Cambodia, Laos and Myanmar. Despite what is characterized by the report as a “global security threat,” little has been done to stop the growth of these criminal enclaves.
The online scams and fraud, which had been aimed at Chinese nationals, “are now targeting global audiences," USIP country director for Myanmar Jason Tower told VOA via Zoom.
Monday's USIP report titled, "A Criminal Cancer Spreads in Southeast Asia," states that the criminal organizations, which were once primarily involved in illegal online gambling, have now begun using a new form of fraud known as “pig butchering” or, in Chinese, “shazupan.”
These scams are referred to as “pig butchering,” Tower said, “because the aim is to fatten targets up before slaughtering them.” They are being “perpetrated on U.S. nationals, and people from across Europe, Japan, and many other countries around the world,” he added.
This type of scam originated in China, and involves building a deep, often romantic relationship with the victim online over time,” Tower explained.
“The scammer introduces some form of investment scheme, and continues tricking the victim by creating the impression that it is yielding large returns. Once the scammer has identified that the victim has committed all of his or her financial resources, the pig is slaughtered — I.e., the scammer disappears with the money, deeply harming the victim both financially and psychologically.”
In Myanmar, these scams are operated out of Shwe Kokko, a newly built town in Karen state, bordering Thailand, in what appears to be an autonomous development zone established over the past few years. According to the USIP report, there are “at least 17 distinct crime zones,” which “now provide an estimated 5 million square meters of criminal office space along a 31-mile stretch of the Moei River on the Myanmar border with Thailand alone."
The area is controlled by Chinese criminal investors in partnership with the Border Guard Force, or BGF, a Karen ethnic minority militia under Myanmar military control. “Not only Shwe Kokko … the whole area [is being] converted into a series of criminal enclaves,” Tower said.
The USIP report, co-authored by Priscilla Clapp and Jason Tower, describes how, after Chinese workers left the area and returned to Beijing during the COVID pandemic, criminal groups “lured jobseekers from around the world with attractive high-tech jobs,” before “trafficking them across borders into cyber slavery to work in financial schemes.”
“Many of these cyber slavery victims end up in Shwe Kokko,” Tower told VOA. They come from places like Thailand, Cambodia, Laos, Malaysia and Indonesia with the promise of well-paying jobs, but when they arrive, they find a much different situation.”
Shwe Kokko is a large illegal-gambling town on the Myanmar-Thai border initially developed by Yatai International Holdings, a group led by a “key Chinese criminal, She Zhijiang.” According to the USIP report, Zhijiang and other transnational criminals made alliances with the BGF, receiving “land and support” from the Myanmar junta-backed force. After Zhijiang’s arrest in 2022, the BGF had “control of a massive criminal empire, vastly increasing its wealth and power,” the report says.
“Initially, what this unholy alliance of the Border Guard Force and these Chinese criminal organizations were involved in doing was building cities to host illicit online gambling, and online fraud operations that targeted Chinese nationals largely back in China,” Tower said.
“There are over 30 countries’ nationals who've been trafficked into that area along the Moei River,” Tower told VOA.
The Singapore-based estimates that about 1,000 Malaysians are being forced to work in Shwe Kokko. The Indonesian Embassy in Yangon, with the help of locals, ransomed some Indonesians from the border town in May, according to the Indonesian Foreign Affairs Ministry.
Sources close to the Border Guard Force, who wish to remain anonymous for their own safety, told VOA that the 20 released Indonesian citizens paid a fee of about $8,500 each to the BGF for their release.
Eight Filipinos who were forced to work as cyber slaves were rescued in February, .