This story was originally published by ProPublica.
A growing number of casinos in Cambodia, Laos and Myanmar are engaging in large-scale money laundering, facilitating cyberfraud that is costing victims in America and abroad billions of dollars, according to new research by the United Nations.
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
seized more than $2 billion in money laundered from a
syndicate with alleged ties to organized crime, including “scams and online gambling.”
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,
Fully Light Group, that purports to ensure that deals struck on the forum go through. 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
in Southeast Asia, told ProPublica in September. 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.
As ProPublica reported in detail last year, Southeast Asia has become a major hub for cryptocurrency investment scams that often start as innocent-sounding
“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
global warning about the problem, which the international police agency said was occurring on “an industrial scale.”
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
wooed Chinese casino operators in an effort to attract foreign direct investment. Criminal bosses, facing a crackdown in China
and sanctions imposed by the U.S., began investing in casinos and cutting deals to run their own special economic zones in Myanmar and elsewhere where they could operate unfettered.
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.
That method of money laundering is becoming increasingly common in Southeast Asia.
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
convicted in China of facilitating about $160 million in illegal cross-border payments and transactions. The company’s ex-CEO, Alvin Chau, is in jail for
running a criminal syndicate and other charges.
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