Chinese cyber crackdown: Slavery scams threaten security

Americans are among the most targeted for pig-butchering scams with anecdotal evidence suggesting more Australians are victims.

A member of the Mandalay People’s Defence Forces prepares to release a drone near the frontline in northern Shan State. Picture: AFP

Beijing’s crackdown on online scam factories on its border with Myanmar has pushed criminal syndicates back into Cambodia, Laos and to Myanmar’s Karen State on the Thai border with ­serious implications for regional security, a new report has found.

The US Institute for Peace on Tuesday warned the scam centres, powered by thousands of mostly young Asians scammed and trafficked into modern cyber slavery, were increasingly targeting US citizens and other Westerners as a result of China’s crackdown on the ­targeting of its own citizens.

Institute analyst and report co-author Jason Tower said anecdotal evidence suggested more Australians were also being targeted with sophisticated scams in which a combination of slave ­labour and artificial intelligence was used to fleece people of billions of dollars a year.

Mr Tower told The Australian that US citizens were now “among the most targeted populations in the world” by so-called pig butchering operations aimed at luring victims into fake crypto currency investment schemes through romance scams. China’s crackdown on scams targeting its own citizens was “generating incentive for operators to target non-Chinese victims”.

“Expect to see that trend continue with less focus on scamming Chinese and more of a focus on global populations,” he said.

The report calls for the US to lead a “multi-country effort” to combat a criminal industry that ballooned to industrial scale during the pandemic, and has flourished in Myanmar’s ungoverned chaos since the February 2021 coup.

It urges countries to follow the lead of Britain, which has imposed sanctions on nine people and five companies accused of trafficking people into Southeast Asian “scam farms”, and for ­Beijing to issue arrest warrants for known Chinese criminals ­involved in the trade.

While Chinese law enforcement recently demanded the ­arrest of a number of senior Myanmar figures implicated in the industry, the report noted Beijing seemed “less inclined to tackle scamming operations on borders other than its own”.

“Curiously, neither Chinese nor Thai law enforcement seem willing or able to challenge these operations, and the Karen armed groups protecting them remain openly defiant,” it said.

“As these criminal gangs increasingly turn to lucrative US victims, it is time for the United States to encourage Myanmar’s neighbours to form a multi-country task force that can tackle the Karen sanctuary and cut the interstate ties that connect the criminal networks.”

The UN estimates at least 220,000 trafficked workers are operating in scam centres in Myanmar and Cambodia alone, with traffickers increasingly widening their net to lure and traffic cyber slaves from African, South American and central and South Asian nations.

Many are tricked into the work with false promises of legitimate and lucrative jobs but once inside the scam compounds – many of which feature razor wire, barred windows and armed security – are unable to leave.

Thousands of people rescued from centres have given harrowing accounts of being tortured for failing to meet work quotas or for trying to escape.

Myanmar has long been the main base for organised criminal activity by Chinese-origin gangs in Southeast Asia, though recent rebel gains against a weakened junta combined with an aggressive Chinese law enforcement push had prompted a mass ­migration of scam compounds.

A multi-front offensive by ethnic armed groups backed by pro-democracy forces that began last October has routed the Myanmar military from key towns and border areas in northern Shan State with the presumed acquiescence of Beijing.

China has been pushing to close scam centres operating on its borders in Shan State, and in recent months has repatriated almost 45,000 people from the compounds, including major crime bosses who have provided authorities with “new intelligence on the Myanmar military’s profitable involvement with the centres”.