What a Tangled Web they weave to practice to deceive – The Asian Fraud Epidemic

The Asian Crime Century briefing fourteen

The fraud epidemic continues in Asia with large numbers of reports of victims of online or telephone fraud, victims trafficked to South East Asian countries to work in fraud call centres, and arrests of gangs across the region as law enforcement agencies grapple with the huge problem.

According to Taiwanese company Gogolook, in 2020 text messaging accounted for 80% of frauds in Taiwan, Korea, Japan, and Malaysia. According to Gogolook, “Scam messages closely follow local current affairs. For instance, after [the] Taiwanese government decided to refund citizens for overtaxing, related scam messages emerged right away. Scammers in Thailand centered on the social network TikTok due to its rising popularity. In Hong Kong, scammers pretended to be public security officers from China.”

Cambodia and Myanmar have been centres of the operation of the frauds, as well as the destinations for Asians lured by advertising for high paying overseas jobs but then trafficked into human slavery. The lack of awareness of the risk amongst poorly educated young Asians is a key reason for the continued fraud epidemic.

The fraud epidemic in Asia is overwhelming for law enforcement agencies and they will not solve the problem. Anti-fraud technologies must be more widely utilised and promoted by governments in the region, which means that the anti-fraud technology industry sector is a growth area in the coming few years.

More on this subject in future Asian Crime Century bulletins.

China

A resident of Cardiff, in Wales, UK, received tax bills amounting to £500,000 for 11,000 Chinese companies fraudulently using his address to register for VAT (Value Added Tax). The Chinese companies, most selling products online through merchants such as Amazon, are suspected to be collecting VAT from their buyers but not paying it to the UK HMRC (Her Majesty’s Revenue Collection).

Indonesia

The Indonesian National Police criminal investigation unit recently arrested 55 Chinese nationals involved in an international online fraud syndicate operating in Indonesia. The arrests were all made in the Jakarta area, and the arrested persons are accused of committing online fraud against citizens in Mainland China, Thailand, and Singapore. The syndicate would contact victims and pretend to be law enforcement officers or sell fictitious electronic products, then launder the proceeds of the frauds through a bank account outside Indonesia.

Japan

The police in Japan are stepping up their efforts to combat regional fraud following the shocking ‘Luffy gang’ case. Last week the Tokyo police obtained arrest warrants for 19 Japanese men who are based in Cambodia for allegedly making scam calls to Japan. The Tokyo police are seeking extradition from Cambodia to return the suspects to Japan for trial. Information was provided to the Cambodian police in January by the Japanese Embassy in Phnom Penh that a criminal group was engaged in fraudulent activities there. A police search of the Sihanoukville hotel rooms of the suspects revealed a large number of mobile phones, manuals related to fraud, and documents with the names of victims. The suspects were then arrested by the Cambodian police. The suspects are believed to have been involved in making phone calls to Japanese residents to defraud them by claiming that they had debts.

South Korea

Police in Seoul arrested two suspects who had allegedly been manufacturing and supplying drinks spiked with drugs to high school students with the aim of extortion. One of the suspects had given the drinks to students in the Gangnam district after deceiving them into believing that they are helpful for concentration. The other suspect called parents of the students and tried to blackmail them for money, threatening that if they were not paid they would report the students to the police for taking drugs. The organiser of the fraud has not yet been arrested.

Malaysia

According to the annual fraud report from Gogolook, around 73% of mobile phone numbers in Malaysia were leaked or sold to scammers. In response to this problem, in Malaysia the Ministry of Communications and Digital has issued a directive to all telecommunications companies to block any URL link in short message service (SMS) to prevent further fraud cases.

Philippines

Six Philippines nationals who has been recruited by people traffickers were repatriated to their home country after escaping from their employer in Laos. The victims were recruited through social media job offers and were promised with high wages and bonuses working as online chat support representatives. They first travelled to Thailand, but were then taken to Laos and forced to work as “love scammers” targeting Asian victims to invest in fraudulent companies. The Filipino victims were “sold” three times from one company to another before they managed to contact the Philippine Embassy and seek assistance.

Singapore

The Singapore police are cracking down on fraud, with 400 people suspected to be involved in over one thousand cases with victims losing over SGD10 million assisting police with their enquiries. The frauds involve mainly investment scams, e-commerce scams, phishing scams, job scams, Internet love scams and the impersonation of government officials.

Taiwan

Last week the Keelung District Court sentenced three men to imprisonment of 20 to 25 years for defrauding jobseekers and working with an international criminal ring to launder more than NT$30 million (US$982,704). The three were found guilty of charges relating to publishing online advertisements posing as companies offering high paid jobs, for which they interviewed 66 people and gained access to their bank accounts. The men transferred the stolen funds to overseas money laundering groups.