July 24, 2024

A mysterious message from a woman claiming to be an old colleague wasn’t a red flag for CY, a San Francisco Bay Area resident. Jessica, the supposed friend, seemed harmless, engaging CY with conversations about her affluent lifestyle in New York and providing consolation as he struggled with his dying father’s care.

Their friendship evolved into a partnership when Jessica introduced CY to cryptocurrency investments. Despite the suspiciously high returns on his investments, he poured in more money, led to believe he was accumulating hundreds of thousands of dollars. However, disaster struck when his investments vanished overnight, and Jessica became unreachable.

CY’s unfortunate ordeal mirrors the experiences of numerous Americans scammed by a financial fraud network operated by Chinese crime syndicates based in Myanmar and other Southeast Asian countries. The FBI and UN investigators believe that these crime groups leverage advancements in technology and the civil war in Myanmar to orchestrate multi-billion dollar scams that prey on innocent individuals.

This colossal fraud scheme, known as a “pig butchering” scam, operates on the principles of a traditional confidence fraud. Potential victims are seduced online, primarily by women impersonating scammers. The victims are then cajoled into investing heavily in a bogus platform. Initially, they are showered with impressive returns to entice further investments. However, when the victims are fully vested, the scammers vanish, taking all the invested money with them.

Connecting the dots of this global scam industry involved interacting with the victims, investigators, and the fraudsters themselves. FBI agent James Barnacle cautions that the globalization and professionalization of fraud services are leading to an increase in victims worldwide. As of November 2023, the financial losses linked to pig butchering scams stood at $2.9 billion, a significant increase from $907 million in 2020.

Indian national Rakesh was part of the scam network, duping individuals like CY out of thousands of dollars. However, Rakesh himself was a victim of a similar fraud that promised him lucrative job opportunities in Thailand. Thousands of desperate job seekers worldwide are imprisoned against their will in Myanmar and forced to take part in these fraudulent schemes. The UN estimates reveal that as many as 120,000 people might be held in such conditions, amounting to modern slavery.

Rakesh believed he was moving to Bangkok for an IT job but was instead driven to a Thai town near the Myanmar border. To his horror, he found himself trafficked into Myanmar, trapped in a compound named Gate 25. Inside the compound, his passport was seized, and he was coerced into signing a contract committing him to a career of scamming innocent people worldwide.

Although Rakesh initially resisted, dire circumstances forced him to accept. Rakesh was then given a falsified online identity and instructed on how to scam. He was expected to build trust and develop a relationship with his potential victims while impersonating an attractive blonde investor from Salt Lake City.




How does the “pig butchering” scam operate?

The ‘pig butchering’ scam is an elaborate confidence fraud orchestrated mostly online. Scammers posing as young women on the internet contact potential victims and build robust relationships with them. They then introduce these victims to cryptocurrency investment avenues, luring them into investing large sums on a bogus platform. The victims are initially provided with impressive returns to persuade further investments. Once the victims have invested heavily, the scammers disappear, taking away all the invested monies.


How widespread is this criminal activity?

This scam has ravaged tens of thousands of Americans and is continuously expanding worldwide. The FBI reported a dramatic surge in financial losses due to this scam, escalating from $907 million in 2020 to $2.9 billion in 2023 alone.


How are scammers recruited?

Modern-day slavery fuels this operation. Thousands of desperate job-seekers worldwide, such as Rakesh, are trafficked to criminal hubs in Myanmar and are held against their will. They are forced into signing contracts that require them to participate in these fraudulent schemes. These individuals are then given false online identities and trained to operate as professional scammers.

In this underground world where human trafficking and extortion are commonplace, people are lured in with promises of financial opportunities, only to find themselves trapped in a web of deceit.

Scammers in the picturesque town of Mae Sot, overlooking Myanmar’s Myawaddy region, lure individuals from India, China, and the Philippines under fales pretences. This farming area has changed its face due to the special economic zones and casino towns that harbor such shady activities.

These unregulated economic zones have become a hotspot for organized criminal gangs who indulge in money laundering, trafficking and most recently, online fraud. Special zones in the Mekong region seem to provide safe havens for these criminal organizations due to lack of strict law enforcement.

These scams surfaced under the disguise of the Covid pandemic and amidst the chaos of Myanmar’s civil war. The scammers exploit Thai telecommunication services to carry out their transnational scams.

Stories of victims like ‘CY’ paint a grim picture of these operations. Here, ‘Jessica’, a scammer pretending to be a friend, introduced him to the world of crypto trading. According to CY, he was persuaded by Jessica, who claimed to have made millions by leveraging insider information on gold trading. She guided him to download a trading app that looked legitimate but was a clone aimed at conning him out of his money.

Areas like the ‘Golden Triangle’, a border region between Myanmar, Laos, and Thailand, are notorious for their significant criminal activity. These pockets have flourished into breeding grounds for organized crime over the years. Myanmar, in particular, has become a profitable base for such scams in the wake of its civil unrest and a military coup in 2021.

While Thai authorities have initiated campaigns to raise awareness about such scams, they seem to be only scratching the surface. They are still struggling to prevent human trafficking and clamp down on scam centers exploiting their telecommunication services. According to Jeremy Douglas from the United Nations Office on Drugs and Crime, hundreds of people continue to be trafficked through Asia each week, feeding this nefarious business.

Other victims like Rakesh stay trapped in these compounds under dire conditions. Rakesh reveals his ordeal of torture and confinement, urging for help that seems to be tenuous at best. Despite his pleas, the official response was disheartening, suggesting that he resolve the issues by his own means.

Although authorities have made some headway, the scale of this disguised form of modern-day slavery is so extensive and widespread that the efforts seem like a drop in the ocean. From CY, struggling with his life after the scam in the San Francisco Bay Area, to Rakesh, looking forward to a dim ray of hope while confined in the scam center, the system continues to churn out more victims. This prompts to reflect upon the grim reality of human exploitation that continues unchecked, hidden in plain sight.

## FAQ
### What are these scam operations?
These operations are exploitative schemes where people are lured into a trap in the name of attractive financial opportunities or jobs. After being tricked, the individuals are held against their will and forced to participate in unethical activities, such as online scams.

### How do they operate?
These scams first take root in poorly regulated special economic zones, usually in border areas notorious for transnational crime. The scamsters exploit telecom services to execute transnational scams, using tactics like cloning legitimate trading apps to defraud unsuspecting victims. The victims, often tricked with promises of lucrative profits, find themselves trapped and powerless.

### What action is being taken?
Several authorities and organizations, including the Thai government, and the United Nations Office on Drugs and Crime, are striving to expose these operations and raise public awareness. However, the scale and nature of these underground operations make them challenging to curb effectively. Thus, efforts at this time often seem insufficient.