Myanmar – The Asian Crime Centre

The Asian Crime Century briefing 53

(Source: UNODC, Casinos, cyber fraud and trafficking in persons for forced criminality in Southeast Asia, August 2023)

Online fraud, and related business lines such as people trafficking, slavery, illegal betting and gambling, continue as the major threat from organised crime groups in Asia in 2024. Although people in the People’s Republic of China (PRC) remains the main target for the organised crime groups engaged in online fraud, victims are all around Asia and the crime centre remains Myanmar.

The Chinese authorities have however taken a leading role in combatting online fraud and other organised crime based in Myanmar, not least because many of the criminal syndicates are operated by Chinese nationals. In addition, the criminal syndicates target Chinese nationals because of the sheer scale of this online market of victims.

China – The Mass Line Approach to Online Fraud

On 5 January, the Ministry of Public Security in the PRC announced that across the country 391,000 cases of telecom or online fraud had been “solved” in the first 11 months of 2023, with over 13 million at risk people engaged in face to face discussions to prevent them from becoming victims of fraud. The PRC authorities also reportedly intercepted 2.75 billion fraudulent calls and 2.28 billion fraudulent messages, dealt with 8.36 million fraudulent Internet domain names, and intercepted 328.8 billion yuan ($46 billion) of funds related to fraud cases, which the MPS suggested indicates success in the crackdown against the endemic fraud problem.

The PRC authorities have initiated multiple special operations against the organised crime groups operating online fraud, as well we related people trafficking, slavery, and online betting and gambling. According to the MPS, 79,000 suspects involved in illegal activities were detained during 2023, including 263 who were “paymasters” of the fraud gangs. PRC law enforcement officers have been sent to Cambodia, Indonesia, Laos, the Philippines, Thailand, and Vietnam to cooperate with local agencies, reportedly leading to the arrest of over 3,000 criminal suspects.

The approach to the fraud epidemic in the PRC is an example of the “mass line” approach taken by the Chinese Communist Party (CCP) to deal with major issues. The “mass line” involves educating, engaging and rallying the population in support of government policy, in this case against out of control online fraud. “Mass line” is essentially an all of society approach to dealing with social problems. The “mass line” education of the population includes slick movies such as ‘No More Bets’ (see Asian Crime Century briefing 34), which tells the story of a Chinese male computer programmer and a female model who are enticed by the promise of high-paying jobs but find themselves trapped in a fictional South East Asian city (alluded to as Myanmar) as prisoners of a ruthless gang and forced into online gambling fraud. 

It is unlikely that the all of society and the “mass line” efforts by the PRC authorities have successfully reduced online fraud permanently, and there is likely to be a temporary lull whilst the organised crime groups involved regroup to establish new operating hubs either elsewhere in Myanmar, other countries in Asia, or outside the region. Chinese organised crime syndicates have created an operating model for industrial scale criminality that can be replicated in many places around the world where there is limited rule of law, or indeed no law.

Myanmar – Be Enchanted (or Kidnapped)

Many of the online fraud, illegal betting, and human trafficking operating hubs have in recent years been located in Myanmar, which remains in the throes of a violent civil war that has left large areas of the country lawless. The Ministry of Public Security (MPS) in the People’s Republic of China (PRC) announced recently that 41,000 fraud suspects were handed over in 2023, facilitated by the Myanmar authorities. How the Myanmar authorities have combatted the organised crime enclaves within the country is a tricky question as the military government is at war with various rebel actions and is not in control of large areas of territory.

Assistance from the Myanmar military authorities to combat the organised crime affecting the PRC and the rest of Asia have come late, most likely because of the inability of the local authorities to combat the problem as well as unwillingness. The Myanmar government seems to have been forced into action by pressure from the PRC government, which is reacting to the domestic negative social impact of externally driven online fraud, illegal betting, and people trafficking (including large numbers of Chinese nationals tricked into traveling abroad in search of high paying jobs).

The conflict in Myanmar is also coming too close to the Chinese border for the PRC government to ignore. After the offensive across the northern Shan state starting in October by an alliance of ethnic groups against the Myanmar military there has been a direct impact on the PRC around the border with Yunnan Province.

On 3 January 2024, a stray artillery shell fired from Myanmar landed in Zhenkan County in Yunnan Province, injuring five people who were taken to hospital and damaging shops. The next day PRC Foreign Ministry spokesman Wang Wenbin stated that the PRC strongly objected to the incident, whilst the previous week the PRC embassy in Yangon (Rangoon) reminded all Chinese nationals in Laukkaing in Northern Myanmar to evacuate immediately due to the severe and complex situation in the Kokang self-administered zone and urged Chinese citizens to avoid travel to the region.

Whilst the PRC government may be able to influence the most senior Myanmar military leadership to remain an ally, it does not seem to be able to influence action within the country. It was reported in the past week (The Irrawaddy, 5 January) that the online fraud syndicates operating in the Kokang region near the border with the PRC have annual revenue of over 100 billion yuan ($14 billion) and are controlled by four families affiliated with the Myanmar military. The allegations were made by Peng Deren, commander of the rebel Myanmar National Democratic Alliance Army (MNDAA).

Peng claimed that four powerful families, namely Bai, Wei, and two Liu clans, were responsible for operating online fraud operations with up to 100,000 people working in Laukkai Town in Kokang before it was attacked by the MNDAA. The Myanmar military reportedly used helicopters to rescue leaders of the organised crime syndicates from Kokang when the area was attacked by the rebels.

In December 2023, the PRC authorities named Bai Suocheng, the founder of the Kokang region Border Guard Force, in an arrest warrant as the main suspect organising cybercrimes from the region. The 74 year old Bai is believed to be a supporter and ally of Myanmar military ruler Min Aung Hlaing. The PRC arrest warrant also named other senior Kokang officials including the Wei San (Border Guard Force commander) and Liu Zhengxiang (president of the ‘Fully Light Group, the biggest conglomerate in the region).

The MNDAA announced last year that its offensive from October was intended to maintain control of the region, protect civilians, eradicate military rule, and to combat the widespread online fraud and gambling that is rampant along the border with the PRC. The rebels may well succeed in closing down the fraud and online betting factories in the Kokang region, but if the most senior operators of those criminal syndicates (the Bai, Wei, and two Liu clans) have indeed fled with the assistance of the Myanmar military then it seems likely that they will simply re-establish their criminal operations elsewhere.

It is not only Chinese nationals who have been victims of the criminal syndicates and imprisoned in fraud factories in Myanmar. In the past several weeks around 500 Thai citizens have reportedly been rescued from fraud centres in Laukkai. In December 2023, 56 Sri Lankan nationals were identified as being held after being kidnapped in the Myawaddy area of Myanmar according to the Ministry of Foreign Affairs of Sri Lanka. Also in December it was reported that over 300 Malaysian human-trafficking victims remained trapped and were waiting to be transferred from Myanmar to the new operating base of the criminal syndicates near Tonpheung near Laos within the Golden Triangle. The United Nations has estimated in 2023 that as many as 120,000 people could be trapped in fraud compounds in Myanmar. In December 2023, the United Nations (UNODC) stated that Myanmar is now the largest source of opium in the world, with estimated production of over 1,000 tons last year.

* * *

Online fraud, online illegal betting and gambling, people trafficking, human slavery, drug cultivation and trafficking – Myanmar has it all. It seemed recently that the organised crime syndicates operating fraud factories in Myanmar are facing closure following the persistent law enforcement pressure from the PRC authorities as well as success by rebel forces in Kochang region.

Based on reports that the most senior leaders of the criminal operations escaped from the Kochang region it seems likely that the industrial scale criminal enterprises in Myanmar will continue elsewhere. There are other areas of Myanmar where the military regime can protect supportive criminal syndicates, and other parts of Asia where the law will turn a blind eye or there is no law. The online fraud epidemic is likely to continue in 2024.