This article was originally published on by . ProPublica Cezary Podkul Mr. Big had a problem. He needed to move what he called “fraud funds” back to China, but a crackdown was making that difficult. So in August, Mr. Big, who, needless to say, did not list his real name, posted an ad on a Telegram channel. He sought a “group of smuggling teams” to, as he put it, “complete the final conversion” of the stolen money by smuggling gold and precious stones from Myanmar into southern China, in exchange for a 10% cut. It’s unclear whether Mr. Big ultimately succeeded; his ad has since been deleted, and ProPublica was unable to reach him. But the online forum where he posted his ad says a lot about why Americans and people around the world have found themselves targeted by an unprecedented wave of fraud originating out of Southeast Asia, whose vast scale is now becoming apparent. In a single recent criminal investigation, Singapore police in money laundered from a to organized crime, including “scams and online gambling.” seized more than $2 billion syndicate with alleged ties The Telegram channel that featured Mr. Big’s plea for assistance was a Chinese-language forum offering access to “white capital” — money that has been laundered — “guaranteed” by a casino operator in Myanmar, , that purports to ensure that deals struck on the forum go through. Fully Light Group Fully Light also operates its own Telegram channels that advertise similar services. One such channel, with 117,000 participants, featured offers to swap cryptocurrency for “pure white” Chinese renminbi or “white capital” Singaporean dollars. (Telegram took down that channel after ProPublica inquired about it. Fully Light did not respond to requests for comment.) The presence of a casino in facilitating such deals is no coincidence. A growing number of gambling operations across Southeast Asia have become key pillars in a vast underground banking system serving organized criminal groups, according to new research by the United Nations Office on Drugs and Crime. The research has not been published, but the agency shared its findings with ProPublica. There are now over 340 physical casinos across Southeast Asia (as well as countless online ones), and many of them show accelerating levels of infiltration by organized crime, according to the UNODC. The casinos function as “a shadow banking system that allows people to move money quickly, seamlessly, jurisdiction-to-jurisdiction, with almost no restriction,” Jeremy Douglas, UNODC’s top official , told ProPublica in September. in Southeast Asia That has made money laundering “easier than ever before,” he said, and it’s been “fundamental to the expansion of the transnational criminal economy” in the region — especially cybercrime. , Southeast Asia has become a major hub for cryptocurrency investment scams that often start as innocent-sounding . As ProPublica reported in detail last year “wrong number”-type text messages The messages frequently originate from seedy casino towns in Cambodia, Laos and Myanmar, where criminal syndicates lure workers with the promise of lucrative jobs, only to force them to work as online scammers. UNODC’s map of known or suspected scam compounds shows a clear overlap with gambling hubs in Laos, Myanmar and Cambodia, where allegations of forced online scam labor have become so widespread that they recently prompted Interpol to issue a , which the international police agency said was occurring on “an industrial scale.” global warning about the problem Gambling has long attracted organized crime, but never more than in Myanmar, Cambodia, Laos and the Philippines, where loose regulations and endemic corruption allow casinos to operate with little oversight or responsibility to report suspicious transactions. Before the COVID-19 pandemic began, officials in those countries in an effort to attract foreign direct investment. wooed Chinese casino operators Criminal bosses, facing a crackdown in China , began investing in casinos and cutting deals to run their own special economic zones in Myanmar and elsewhere where they could operate unfettered. and sanctions imposed by the U.S. When the pandemic struck in 2020, travel restrictions emptied newly built casinos, hotels and offices of workers and visitors across the region. Criminal syndicates repurposed the facilities to house online fraud operations and turned to human smugglers to staff them up. (For example, when Philippine authorities raided several online gambling operators between May and August, they discovered more than 4,400 laborers, most of them .) human trafficking victims forced to perpetrate online fraud Online casinos can be easily used for money laundering: They often accept cryptocurrency deposits that can be converted to virtual chips and placed in bets or cashed out in currency, making them seem like proceeds of legitimate gambling. is becoming increasingly common in Southeast Asia. That method of money laundering Physical casinos have their own attractions for money laundering. They have become a draw for a parallel industry of junket operators, who organize gambling trips for high-rollers. Those junkets also attract organized criminal groups that need to move money across borders and do so using junkets’ gambling accounts, according to recent prosecutions by Chinese authorities. Last year, 36 individuals connected to Suncity Group, once one of the biggest junket operators in the world, were about $160 million in illegal cross-border payments and transactions. convicted in China of facilitating The company’s ex-CEO, Alvin Chau, is in jail for . running a criminal syndicate and other charges In northeast Myanmar, Fully Light Group has emerged as a “multi-billion-dollar business conglomerate and a key player” in casinos and illegal online gambling, according to , Myanmar country director for the United States Institute of Peace. research by Jason Tower “These are not normal casinos in any way,” Tower said, because they’re located in what he calls “criminal enclaves” that are more under the control of organized crime than any government authority. For instance, hundreds of criminal convictions by Chinese courts related to illegal casinos, fraud, kidnapping, drugs and weapons charges in the Kokang Special Administrative Zone, near Myanmar’s border with China, where Fully Light is based. Tower found In its review, UNODC found Kokang casinos — both those owned by Fully Light and by others — also played a major role in money laundering. They operate Telegram channels that openly advertise money laundering services, including some that link back to official Fully Light channels and offer the company’s guarantee to cross-border exchanges of cryptocurrencies. Some Fully Light-affiliated Telegram channels include solicitations to participate in what are known as money mule “motorcades” that move funds through multiple cryptocurrency wallets or bank accounts. Billions of dollars more are likely flowing into the region, thanks to online scams that show no signs of abating. Nick Smart of the cryptocurrency analytics firm Crystal Blockchain has been tracing the flows of crypto funds deposited into online platforms that are set up to look like investing sites in order to fleece victims. Following the money trail from just one such website, which he suspects to be linked to criminal organizations in Myanmar, led him to a wallet that also pooled funds from 14 other known crypto scams. The wallet received about $44 million in various cryptocurrencies between December and July, when it ceased activity. With thousands of such websites popping up every day, victims’ losses are easily “in the billions,” said Smart, the director of blockchain intelligence at Crystal. The global cybercrime spree has prompted countries across the region to take a bolder tack. In June, Thailand to two cyberfraud hot spots across its border with Myanmar (with ). More recently, six illegal cellular towers suspected of providing internet service to scam compounds in Myanmar. cut off electricity disappointing results Thai officials shut down Chinese authorities have also in dramatic operations that included a of hundreds of suspected cybercriminals across a border crossing from Myanmar to China’s southern Yunnan Province on Sept. 6. arrested thousands of their own citizens humiliating perp walk On Sept. 26, UNODC with China and the 10-member Association of Southeast Asian Nations to jointly and human trafficking linked with casinos and scams. An accompanying the agreement calls on the countries to “make anti-money laundering and wider anti-corruption efforts a higher priority.” unveiled an agreement combat organized crime action plan But the challenge is steep. Even as multiple countries crack down, Laos, one of the poorest nations in the region, is online gambling operators to set up shop within its borders and target foreigners. getting ready to allow And governments need to broaden their focus. Anti-money-laundering regulations often zero in on bank cash transfers of $10,000 or more. The UNODC’s Douglas said governments will need to turn their attention to casinos and other nontraditional financial players. “Everyone’s been focusing on transactions of $10,000 going through banks and flagging suspicious transactions,” Douglas said, “and these guys are moving millions around the corner through the casino, laughing at the system.” Photo by on Carl Raw Unsplash
