(Picture Source: The Philippine Star, 1 November 2023)
On the evening of Friday 27th October officers from multiple law enforcement agencies raided the Smart Web Technology Corporation office in Panay City, located in the south of Metro Manila. Inside the office building where the company is located, the officers found 731 foreign and Filipino nationals who were arrested, KTV rooms (karaoke), an “aquarium” viewing room for customers to choose girls (Chinese, Vietnamese, Korean, and Filipino) for sex, massage rooms, evidence of torture of some of the people imprisoned created there, as well as computers believed to have been used for online fraud. The torture room, shown in the picture above, had tasers, rattan sticks, baseball bats, airsoft guns and a wooden club, presumably used on those detained in the crime factory.
The company was operating with an ‘Internet Gaming Hub’ License issued to Companies called Freego Computer Gaming OPC and Xushen Technology Corp. These licenses used to be known as ‘POGOs’, issued in for ‘Philippines Online Gaming Operators’. The POGOs have become notorious for being run by transnational organised crime groups, many of them from the People’s Republic of China (PRC). Smart Web and the other related companies have been involved in sex trafficking, people trafficking for other activities, as well as online crypto investment and love scams, according to the Philippines authorities.
One of the Chinese victims found inside the complex said that he had been kidnapped and sold for around USD12,500 five months ago from another POGO, and another victim claimed to have been held at the complex for over a year and was made to work between 12 to 15 hours a day.
The criminal activities found in Panay City are not unusual in Asia and are part of the epidemic of transnational organised crime that has spread across the region. It is surprising to see such a blatant multi-business line crime factory in Manila as most have been presumed to be located in Myanmar and Cambodia where law enforcement is corrupt or non-existent. For such a blatant large criminal enterprise to be found in a licensed Internet Gaming Hub / POGO in Manila is a major wake up call to the Philippines authorities to take the issue more seriously and deal with the spread of organised crime driven by these illegal gambling enterprises.
The human and business nature of this regional organised crime problem has been best explained by James Porteous of the ARF Council in his excellent new report ‘How Organised Crime Operates Illegal Betting, Cyber Scams & Modern Slavery in Southeast Asia’. In the report, Mr. Porteous states that “Tens of thousands of people are being held in modern slavery conditions to work in organised illegal betting and cyber scam operations across Southeast Asia. These operations, which are run by individuals with long histories of involvement in illegal betting and organised crime across Asia, are estimated to make at least USD 40 to 100 billion a year in illicit profits from such activities.”
He goes on to detail how this huge criminal business involves modern slavery as “Some individuals are recruited on false job advertisements, have their passports removed and are kept in dormitories attached to fully contained casino compounds as forced labour to promote illegal betting websites and engage in industrial-scale cyber-fraud such as “pig butchering”, romance scams, and cryptocurrency Ponzi schemes. Workers are typically not permitted to leave without paying large ransoms to their captors, and can be sold and traded between organised crime groups. Fines for breaking rules or failing to hit monetary targets are added to victims’ ransoms.”
There is no better analysis and explanation of this huge Asia transnational organised crime problem than from Mr. Porteous in his report, which is a must read to understand how organised crime has flourished in the region. His report is timely, as just this week The Economist reported on the subject explaining that “This criminal tsunami has roots in illicit online gambling by Chinese punters, much of it organised in South-East Asia by ethnic-Chinese gangs. In recent years the gangsters have also moved into other illegal activities, especially online scams.”
It is now very clear what the criminal problem is - A diversification of Chinese organised crime groups across Asia coming as a consequence of the continued crackdowns on crime and corruption in the PRC. The spread of these criminal groups is also likely facilitated by the ‘Belt and Road Initiative’ as Chinese investment has flowed out of the country and disguised some of the criminals as legitimate business people. Now that we better understand the problem, more action such as that taken by the authorities in the Philippines needs to be taken in every country where these organised crime factories have become established, and also to cut off the flow of funds from their business.