Follow the money: Where are the criminal ringleaders who profit from misery in the Asian fraud factories?
The Asian Crime Century briefing 105
There is a growing volume of news and research reports into the online scams, online illegal betting (and other gambling), and people trafficking involved in the fraud factories of Asia. The increased interest in the subject from news organisations may be due to the expansion of the target victims around the world to include people in the Americas and Europe.
Tens of thousands of people from around Asia have been trafficked into indentured labour in fraud factories in Cambodia, Myanmar and the Philippines, as well as hundreds of thousands of victims in the region deceived into paying fraudsters for fake services. Now that there are a growing number of victims in Europe and the US there is a more urgent clamour for action.
Enforcement action by various authorities against fraud compounds in multiple Asian countries has developed a good tempo, although this seems as yet to have had a limited impact on the online fraud epidemic. There continue to be reports of victims around the world losing money to online fraud, which in totality amounts to billions of dollars. However, we continue to have no clear understanding of the destination of the proceeds of these crimes or who are the criminal investors who are profiting from the globalised online fraud industry.
Chasing the dragon – Where is it?
Some explanations of the organisers and destination of the proceeds of online frauds have been ridiculously sensationalist. In January, an article in Time Magazine asked “Is China Really Powerless to Stop the ‘Scamdemic’? The Truth Is More Complex.” There are many factual errors in the article, but also some comments that have no insight into the politics of the region.
For instance, the article claimed that “The roots of the scamdemic lie in Southeast Asia’s illicit betting industry, which has long been run by Chinese “Triad” organized crime syndicates.” In fact, analysis conducted over many years by the Council on Anti-Illegal Betting & Related Crime (which the author chairs) has reported that the growth of illegal betting (and other gambling) is far wider and more complex than only Chinese criminal groups.
“Triads” is a term used far too widely to refer to Chinese criminals, most of whom have no Triad affiliation or even knowledge. In the People’s Republic of China (PRC) after 1949 Triads were largely eradicated by the communist authorities. Triads continued to thrive in Hong Kong and Macau Triads because of the inability of British and Portuguese colonial rule to eradicate them. In Taiwan Triads prospered after 1949 because some were utilised by the Kuomintang and they have also not been deemed as illegal organisations. The outcome has been that “Triads” largely originate from Hong Kong, Macau, and Taiwan, and not Mainland China. Despite this, many commentators wrongly label any Chinese organised crime group as “Triads”. Not all Chinese criminals are Triads, but generally all Triads are criminals.
Time Magazine also carried comments that “We’re talking about a generation’s worth of wealth being moved from the United States…It’s just way too much money to be allowed in the hands of a few kingpins. This smells like state involvement…it [is] hard to believe that they are allowing this kind of behaviour to continue by Chinese fugitives unless they are getting a cut.” Sadly these comments from the USA illustrate a deep lack of understanding of the geopolitics of Asia or the situation on the ground in the complex border areas around Cambodia, Myanmar, Thailand and the PRC.
Chinese criminals have operated outside of their home country in the lawless areas of South East Asia for centuries. Organised Chinese criminal groups developed after the retreat of Kuomintang Nationalist military forces from Yunnan Province into Shan State in Burma after the victory of Chinese communist in 1949. At least 15,000 Kuomintang soldiers continued to operate in Burma as a cohesive force from 1949 to the early 1960s, after which many elements of these forces became involved in drug trafficking from the ‘Golden Triangle’ of Burma, Laos and Thailand. There has for centuries been a significant ethnic Chinese population in South East Asia, in particular in Thailand where there are large numbers of ‘Chiu Chow’ people (from the area around Chaozhou in eastern Guangdong Province). The Chinese organised crime groups that have developed in the region in the latter part of the 20th century are beyond the reach of law enforcement agencies in the PRC.
The PRC is the only state in the region with the political influence and law enforcement resources to drive greater collaboration to combat organised crime controlled online fraud. In October 2023, a concerted attack was conducted by the ‘Brotherhood Alliance’ on the “four big families” that controlled areas of Kokang Self-Administrative Zone in Shan State, Myanmar, which borders Yunnan Province of the PRC. The “four big families” allegedly had around 100,000 people working for them and were operating online fraud centres. The online fraud operated by these families reportedly had revenue of US$14 billion per year, in addition to the proceeds from drug trafficking for over a decade.
The attack, “Operation 1027”, was supported by the PRC authorities, who took custody of many of those arrested. The operation was part of coordinated PRC enforcement action along the border, led by the Yunnan Provincial Public Security Department in collaboration with the military authorities in Myanmar. The PRC Ministry of Public Security claimed that in 2023 over 11,000 online fraud suspects were handed over to them by the Myanmar authorities, with 63 identified as “masterminds” and 1,531 who were already listed as wanted by the authorities. The thousands of people repatriated from Myanmar to the PRC undoubtedly included many victims, but given the lawless state of Myanmar the investigations to determine the role of each could realistically only be conducted after they were returned to the PRC.
Enforcement action in Myanmar and the return of suspects and victims to the PRC reportedly continued in 2024. In March, PRC and Myanmar authorities conducted a joint operation in the Muse region (in northern Shan State) with 800 fraud suspects arrested (most no doubt victims). In September, another 313 Chinese nationals were transferred from Myanmar (with another 557 Burmese nationals arrested). In November, the PRC authorities claimed that 763 Chinese nationals were detained and repatriated from Tangyan region (Shan State) and that all large-scale online fraud industrial parks in northern Myanmar bordering China had been dismantled.
Collaboration between the PRC and neighbouring countries has continued into 2025, and in January a meeting of police chiefs from Myanmar, the PRC and Thailand agreed to form a joint task force to combat online fraud operations on the border between their countries. Cooperation with authorities in Myanmar is complex as the country is in the throes of a civil war, and it is notable that the meeting involved police chiefs from Karen and Shan states who do not fully control their areas of responsibility.
The Myanmar military government has been forced out of much of Shan state, large parts of which are controlled by the varied militias including the Brotherhood Alliance, which involves the Myanmar National Democratic Alliance Army (ethnic Chinese from Kokang state), the Ta’ang National Liberation Army (the armed wing of the ethnic Palaung people) and the Arakan Army (which fights for the interests of the Rakhine people, whose homeland is located in western Myanmar and borders Bangladesh). Clearly an agreement brokered by the PRC government with the Myanmar central government and Thailand may have very limited success in this situation.
Flying dragons – Where are they?
The operations against fraud compounds in Shan state seem to have had an impact, but online fraud has not been stopped and there are indications that the organised crime groups involved simply move to alternative operating locations. The long border between Myanmar and Thailand provides ample opportunities for criminals to move around and find alternative operating locations. Successful enforcement against fraud compounds in Shan state in the north of Myanmar seems to have led to an increase in activity further south in Myawaddy and Shwekokko, both towns located right on the border with Thailand. Myawaddy reportedly may have as many as 300,000 people employed in 40 major compounds, which can operate as long as they have access to SIM cards, Starlink satellites, electricity and a supply of human resources (i.e. people trafficked or forced to work in the compounds). Most of this infrastructure comes from Thailand.
The Myawaddy region does not border the PRC, so the Ministry of Public Security is challenged to coordinate intelligence gathering and enforcement action. The operators are consequently reportedly moving their operations even further south from Myawaddy, supported by people and infrastructure from Thailand. Clearly the industrial scale fraud is not simply a product of the lawlessness in Myanmar, but is additionally a mixture of the expansion of Chinese organised crime groups into the South East Asia, leveraging the long historical Chinese links in Thailand as well as endemic corruption in the country.
The operators of online fraud compounds are not only Chinese, and there is clearly collaboration between ethnic Chinese with local power brokers. The Shwekokko Special Economic Zone is controlled by the Karen Border Guard Army. Shwekokko includes the Apollo and Yulong Bay commercial parks, as well as the Asia Pacific New City park, which is operated by Cambodian-Chinese businessman She Zhijiang (detained in Thailand since 2022). She Zhijiang operates Asia Pacific Holdings, a Hong Kong registered company.
Myawaddy county is governed by Colonel Saw Chit Thu (who is subject to EU and UK sanctions), a commander of the Karen Border Guard, and includes the Jinxin, Hengsheng and PPM commercial parks. Jinxin Holdings is reportedly operated by Xiong Shijia, a native of Fujian Province in the PRC, who claims to operate gambling business in Myanmar. A little further south from Myawaddy is the town of Lay Kay Kaw, where the KK Industrial Park, Huanya Industrial Park, and Taichang Industrial Park are all located. The area is reportedly controlled by Major Saw Tin Win, a subordinate of Colonel Saw Chit Chu in the Karen Border Guard. KK Park is a notorious fraud compound, with security reportedly provided by the Karen Border Guard.
Just south a little further is Dongmei Park, a commercial park which includes Wan Kuok Kui (aka ‘Broken Tooth’), a former leader of the Macau 14K triad faction. Wan Kuok Kui continues to generate news media interest because of his high profile triad history in Macau as well as reported links to PRC government agencies. However, Wan may not be an important player in the wide landscape of transnational Chinese organised crime and international online fraud as well as other criminal business lines. He is only one investor in a commercial fraud compound in Myanmar, of which there are obviously many.
The Karen Border Guard and the Karen National Army have essentially become criminal sponsors as they facilitate Chinese organised crime groups to utilise their commercial parks. The commercial parks have been increasingly well analysed in the past several years, with many accounts from escaped victims, and it is clear that these compounds are engaged in people trafficking, forcible detention, online fraud, online illegal betting, narcotics trafficking and gambling, and prostitution. Myawaddy and the region controlled by the Karen forces is over a thousand miles from the Chinese city of Kunming in Yunnan Province, which illustrates how the sponsorship of the fraud compounds in the area is not easily solved by the PRC authorities.
Some of the Burmese and Chinese criminals operating compounds have been identified, but there are investors who are not yet known who need to have some light shone on them. The huge money laundering case in Singapore in 2023 was an illustration of the problem - The dozen young ethnic Chinese convicted in Singapore were almost certainly not the ringleaders of this group and they were laundering funds from online gambling businesses based across South East Asia.
Who owns and operates these businesses? The investors who are beneficiaries of the massive organised crime operating from Myanmar must be identified to be pursued. There will be Cambodian, Chinese, Malaysian, Philippines and Thai business interests linked to the Myanmar fraud compounds, and the next step in the battle against the epidemic of online fraud should be to pursue these business people who are receiving the proceeds of crime. Those controlling fraud factories in Myanmar and elsewhere are Chinese and other Asian organised crime groups, not the PRC government. Conspiracy theories about the situation will not help combat this massive organised crime problem.