The United Nations Office on Drugs and Crime (UNODC) has expressed concern that Asian crime syndicates behind the multibillion-dollar cyberscam industry are expanding globally, including to South America and Africa.
The agency, in a report released on Monday, warns that despite regional crackdowns, the operations are becoming more global, more sophisticated, and harder to contain.
The report describes how transnational criminal networks originally based in countries like Cambodia, Laos, and Myanmar have evolved into large-scale operations.
According to the report, one of the key tactics of these crime networks is rapid diversification of their labor force, and they now recruit from over 50 countries, including Nigeria, Brazil, Sri Lanka, and Uzbekistan.
How they operate
The report shows that these syndicates have established vast compounds that house tens of thousands of workers, many of whom are victims of human trafficking, forced to carry out online scams targeting victims across the world.
“These operations have become a sophisticated global industry. It spreads like a cancer. Authorities treat it in one area, but the roots never disappear—they simply migrate,” said John Wojcik, a regional analyst for the UNODC.
UNODC estimates that hundreds of scam farms worldwide are now generating tens of billions of dollars in annual profits, making cyberfraud one of the fastest-growing forms of transnational crime.
The agency called on countries to work together and intensify efforts to disrupt the gangs’ financing.
“The regional cyberfraud industry… has outpaced other transnational crimes, given that it is easily scalable and able to reach millions of potential victims online, with no need to move or traffic illicit goods across borders,” said Wojcik.
The report noted that the United States alone reported more than $5.6 billion in losses to cryptocurrency scams in 2023, including more than $4 million in so-called pig-butchering scams or romance scams designed to extort money from often elderly and vulnerable people.
Expansion despite crackdown
In recent months, authorities from China, where many of the gangs originate, Thailand, and Myanmar have led a crackdown on scam operations in lawless areas of the Thai-Myanmar border, with Thailand cutting power, fuel, and internet supply to areas housing scam compounds.
But syndicates have adapted, shifting operations between “the most remote, vulnerable, and underprepared parts of Southeast Asia”, especially in Laos, Myanmar, and Cambodia, and beyond, exploiting jurisdictions with weak governance and high rates of corruption, the UNODC said.
- Raids in parts of Cambodia where the industry is most visible “led to significant expansion in more remote locations”, including the country’s western Koh Kong province, as well as areas bordering Thailand and Vietnam, the U.N. agency said.
- New sites also continue to be developed in Myanmar, it added, a country in the throes of an expanding conflict since the military seized power four years ago.
- Syndicates have expanded into South America, the U.N. agency said, seeking to enhance money laundering and underground banking partnerships with South American drug cartels.
They are increasingly establishing operations in Africa, including in Zambia, Angola, and Namibia, and Eastern Europe, including Georgia, the agency said.
Gangs have also rapidly diversified their workforce, recruiting people from dozens of nationalities, according to the agency, reflecting how the industry scams targets across the globe and has sought to evade anti-trafficking efforts.
What you should know
Just recently, a sting operation by Nigeria’s anti-graft agency, Economic and Financial Crimes Commission (EFCC), led to the arrest of 792 suspects for their alleged involvement in cryptocurrency investment fraud and romance scams.
Out of the 792, the agency disclosed that 148 of them were Chinese, who were also the recruiters, 40 of them were Filipinos, two Kharzartans, one Pakistani, and one Indonesian.
According to the EFCC, the foreign nationals were using a Lagos facility, which could be mistaken for a corporate headquarters of a financial establishment, to train their Nigerian accomplices on how to initiate romance and investment scams, and also used the identities of their Nigerian accomplices to perpetrate their criminal activities.
