The Displacement, Mobility, and Nimbleness of Chinese Organised Crime Groups
The Asian Crime Century briefing 70
Chinese organised crime groups operating fraud and illegal gambling compounds in South East Asia continue to be displaced by enforcement action but also remain sufficiently mobile and nimble to relocate to safe havens and resume criminal operations.
In the past several months there are reports of large numbers of Chinese nationals being repatriated from Myanmar to the People’s Republic of China, although it is not clear how many of those returned are criminals or victims of the human slavery that has characterised the industrial scale fraud operating in the region.
The repatriations are partly the result of determined enforcement action by the Chinese authorities as well as success on the battlefield by various rebel groups fighting against the military government in Myanmar. In January, forces of the Myanmar National Democratic Alliance Army (MNDAA) captured the Kokang regional command from the Myanmar military, with large numbers of government forces surrendering. The Kokang Self-Administered Zone is just a few kilometres from the border with China, and has hence been a centre for Chinese criminal groups establishing a base in Myanmar for online fraud, online gambling, and related people trafficking.
According to the United States Institute of Peace (USIP), the sustained campaign by the Chinese authorities against organised crime groups operating “scam compounds” has forced many of the operations to be moved from the border with northern Shan State to Karen State (now known as Kayin State). Karen State borders Thailand, a large part of a 1,500 porous border between the two countries.
The complexity of the actors involved in the criminal centres that have shifted from northern Shan State to Karen State is highlighted by the USIP, which reports a number of Karen militia leaders who are protecting the Chinese groups that have relocated. A sanctuary for the criminal groups in Shan State has been replaced by a sanctuary in Karen State. With this move, the criminal groups involved have shown remarkable nimbleness in their ability to relocate when faced with threats to their operations.
This displacement and relocation of Chinese organised crime groups is not new, as reported in the Asian Crime Century in January 2023. In the first two decades of the 21st century, Chinese organised crime groups gravitated to the Philippines, where they operated online gambling with licenses in the Cagayan Economic Zone Authority, the Aurora Pacific Economic Zone & Freeport Authority, and the Authority of the Freeport Area of Bataan. The criminal groups in the Freeport Zones also started operating casino gambling and online gambling as new revenue streams in the 1990s and 2000s, largely to cater to Chinese nationals who were eager to gamble. From 2016 onwards, Chinese organised crime groups were displaced from special economic zones in the Philippines by national gambling licensing under the Philippine Amusement and Gaming Corporation (PAGCOR) which created ‘Philippine Offshore Gaming Operators’ (POGOs), following President Duterte’s instruction that licensing be centralized.
From 2018 onwards, some (but not all) of the Chinese organised crime groups in the Philippines were displaced by pressure from the authorities to Cambodia (especially Sihanoukville) as well as Vietnam (to a lesser extent) to operate casinos, online gambling, and online fraud. In the recent high profile police case against a major money laundering syndicate in Singapore, one of the accused has been reported to have business links to a casino business in Cambodia and own property in that country as well as in Thailand. Chen Qingyuan is alleged by the Singapore Police to work for an organisation that operated an online casino in the Philippines targeting customers in China. The Singapore case highlights the highly varied transnational nature of the Chinese organised crime business lines and the related money laundering.
From 2022 onwards, Chinese organised crime groups were displaced from Cambodia to Myanmar to operate casinos, online gambling, and other criminal activities (people trafficking, online fraud, etc), following pressure by the Chinese government on Cambodian authorities to take action against Chinese criminal groups operating in the country.
Cambodia was a major centre for illegal online gambling and its parallel business line of online fraud, until the crackdown by the authorities. By the end of 2022, the Cambodian police reported that they had arrested over 600 people and closed 231 illegal gambling operations, which led to casino centre Sihanoukville facing a sudden downturn and over 200,000 Chinese workers returning to their home country. Myanmar became the next destination for Chinese organised crime groups to shift their operations.
The wheel has turned again in 2024 as pressure from the Chinese authorities has displaced Chinese organised crime groups within Myanmar. The country remains a haven for criminality because of the civil war, and borders with neighbouring countries are so porous that criminals can move between Cambodia, Laos, Myanmar and Thailand with multiple safe havens.
Corruption at all levels in governments in these countries has facilitated this criminal freedom of movement and Thailand has for many years been a centre for Chinese criminals to meet and organise. In Thailand corruption in the police is institutionalised. The Deputy National Police Chief, Surachate Hakparn (also known as “Big Joke”), surrendered to police investigators on 3 April to answer allegations of money laundering linked to illegal gambling networks. A warrant had been issued for Hakparn and he was later released on bail, pending possible charges linked to colluding in money laundering for the ‘BNK Master’ gambling network.
Thailand has long been a centre for the organisation of Chinese transnational organised crime groups operating in South East Asia, aided by an institutionally corrupt police force. Recent analysis has illustrated seven current and former senior police officers who have amassed huge personal wealth. Hakparn’s wife is reported to be a “near billionaire”, although his police salary was around US$2,000 per month. Other millionaire police generals are as follows:
· Generał Pacharawat Wongsuwan, also known as ‘Big Pod’, former Chief of the Royal Thai Police and now Deputy Prime Minister, personal assets of US$7.7 million.
· General Chakthip Chaijinda, also known as ‘Big Pae’, former Commissioner General of the Royal Thai Police, personal assets of US$26 million and his wife US$23 million.
· General Seripisut Temiyavet, also known as ‘Big Tu’, former Commissioner General of the Royal Thai Police, personal assets of US$3.5 million.
· General Somyot Poompanmuang, also known as ‘Big Odd’, former Commissioner General of the Royal Thai Police, personal assets of US$27 million.
· General Wirachai Songmetta, also known as ‘General Ten Billion’, former deputy commissioner of the Royal Thai Police, personal assets of US$940 million.
· General Visanu Prassarttong-Osoth, also known as ‘Big Hin’, personal assets of US$26.3 million.
The blatant corruption of senior police officers is shining a light on Thailand as another South East Asian state with endemic corruption. Police corruption has been growing from the bottom to the top of the organisation for years, and the country has become infamous for police requests (or demands) for bribes from tourists and expats.
Ethnic Chinese organised crime groups in Thailand also include Taiwanese triads, who have led the expansion of fraud across the region. In February, former gambling executive Kuo Che-min and alleged Heavenly Way triad member Lin Pin-wen, were on trial on charges of operating telecommunications fraud and laundering around US$86.6 million through casinos, and online gambling platforms. Kuo was arrested in Bangkok in 2023 and the Thai authorities have stated that he and his associates laundered over US$500 million in proceeds of crime. The syndicate was alleged to have had a close business partnership with Macau junket operator Suncity, whose former CEO Alvin Chau has been imprisoned after being convicted of huge online illegal gambling and money laundering.
Kuo and Lin are good examples of the influence of Taiwanese (ethnic Chinese) organised crime groups in the development of online fraud and related crime across Asia. The Taiwanese criminal syndicates were operating advance fee frauds in Mainland China, Hong Kong, the more economically parts of South East Asia, and Taiwan, as early as the 1990s. Their modus operandi was to mail promotion documents to victims advertising get rich quick schemes or access to “sure win” lottery ticket numbers, which surprisingly large numbers of people were fooled by. As Internet connectivity spread across Asia, the Taiwanese gained access to far more affluent consumers in many Asian countries and in turn educated Mainland Chinese criminals in how to operate online fraud and illegal gambling. The Taiwanese triads and criminals led the way in this business, and Mainland Chinese criminals followed.
The problem of how to combat this transnational organised crime problem remains unsolved. The Chinese authorities have conducted sustained enforcement action in collaboration with militias in Myanmar, but Chinese organised crime groups have simply been displaced. In the Philippines there was enforcement action during the administration of President Duterte, but ‘POGOs’ remain in the country operating online gambling (and reportedly some also online fraud). The authorities in Cambodia have conducted high profile closures of large numbers of Chinese operated casinos in their country, in particular in Sihanoukville, but many remain and the actions are suspected to be for show. The Thai police are institutionally corrupt, right up to the most senior levels. There is no shortage of locations in Asia for Chinese organised crime groups to base their operations, and they have shown themselves to be nimble and mobile when displaced by enforcement action.