US sanctions billion-dollar cyber scam networks in Myanmar and Cambodia

(Reuters) -The United States imposed sanctions on cyber scam operators in Myanmar and Cambodia on Tuesday, a booming industry the U.S. says stole tens of billions from Americans last year, according to a Treasury Department statement.

 

Criminal networks have trafficked hundreds of thousands of people into Southeast Asian scam compounds, especially along the Thai-Myanmar border, where they are forced into debt bondage and defrauding strangers online.

 

"Southeast Asia’s cyber scam industry not only threatens the well-being and financial security of Americans, but also subjects thousands of people to modern slavery," Under Secretary of the Treasury for Terrorism and Financial Intelligence John K. Hurley said in the statement.

 

The Myanmar junta’s spokesman did not immediately respond to Reuters’ requests for comment, and neither did a Cambodia government spokesman.

 

The scams include money laundering, illegal gambling and persuading victims to make fraudulent investments, and the operators tend to be people - usually foreigners - who have been trafficked and coerced into working in scam compounds.

 

Sanctioned entities included nine companies and individuals in Shwe Kokko, a town in Karen State on the Thai border. 

 

The U.S. sanctions aim to choke off funds to the criminal networks, which have flourished in regions controlled both by militias and Myanmar’s junta.

 

COERCION AND VIOLENCE

 

At Shwe Kokko, operators lured people from across the globe with deceptive offers, then confined, mistreated and coerced them into carrying out online fraud for criminal networks, the Treasury Department said.

 

The criminals often use debt bondage, violence, and the threat of forced prostitution as part of their coercion tactics, it said.

 

The department also sanctioned 10 entities in Cambodia, where centres run by Chinese criminal networks were focused on digital currency fraud.

 

 Some compounds in Cambodia resembled prisons, according to Amnesty International, which accused the country of ignoring the industry, allegations it denies.

 

Since a 2021 military coup, scam centres have expanded rapidly in Myanmar, spreading from militia-controlled areas into those under junta control, a report by the Australian Strategic Policy Institute said.

 

Shwe Kokko was established in 2017 by Hong Kong–registered Yatai International Holdings Group and the Karen National Army, an armed group allied with Myanmar’s military, according to the United States Institute of Peace. Yatai group is sanctioned and KNA has been previously sanctioned.

 

(Reporting by Shoon NaingEditing by Bernadette Baum)