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China-supported cyber scam operations in Myanmar dismantled

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A massive web of cyber scam operations in the Kokang region of Myanmar thrived for over a decade under the protection and complicity of Chinese and Myanmar officials. However, in a significant shift, the Chinese government is dismantling these operations and bringing the criminals to justice, responding to international pressure, domestic outrage, and strategic realignments.

These criminal enterprises, led by the powerful Wei, Bai, and Liu families, benefited from financial and logistical support intertwined with legitimate economic ventures.

In a detailed investigation by The Washington Post, it was found that the Chinese government, recognising the potential of the Kokang region for illicit activities, developed close ties with the crime families.

The criminal networks relied on smuggling workers into Myanmar, where they were coerced into working in scam compounds. A similar industry is working in other nations, including Cambodia, where Indian workers were forced into the cyberscam industry.

The Chinese officials’ lax border controls and occasional complicity enabled the steady flow of trafficked individuals. These workers, trapped in the cycle of exploitation, were the backbone of the cyber scam operations, conducting fraudulent activities from within fortified compounds.

The Kokang region is home to more than 300 such compounds harbouring hundreds of thousands of people. The workers faced a harsh work environment where they were beaten and tortured if they didn’t meet the targets. Several people have reported being shot or stabbed with knives. These families often kept lions, tigers and bears in cages to scare people.

The Post’s investigation revealed more than a thousand criminal cases, mostly on low-ranking members of the gang. This is quite ironic as the high-ranking members worked with the Chinese officials.

The modus operandi of these scammers resembled that of any other scam and phishing operation. They were taught how to establish relationships with the elderly or engage in romance scams.

These cybercrime operations primarily targeted Chinese citizens, siphoning billions from ordinary people’s pensions and savings.

The high-ranking officials in Chinese border regions, such as Yunnan province, were found to have close ties with the Kokang families. These officials often turned a blind eye to illegal activities in exchange for kickbacks and other forms of compensation.

This symbiotic relationship allows the crime families to operate with impunity. Notably, Lu Zhihua, the former deputy mayor of Lincang City, met with members of the Wei family to discuss “investment opportunities.”

Such meetings underscored the blurred lines between legitimate economic ventures and criminal enterprises.

The scam operation involved hundreds of thousands of people targeting Chinese speakers.

Furthermore, the Chinese government’s massive Belt and Road Initiative (BRI), a modern-day Silk Road, provided an opportune cover for these operations. As part of the BRI, China invested heavily in infrastructure projects in the region, including roads, bridges, and business development. These projects ostensibly aimed at boosting ties but also facilitated the smooth flow of resources and personnel crucial for the cyber scam industry.

Despite the long-standing symbiosis, recent geopolitical, social, and economic factors have compelled the Chinese government to shift its stance and dismantle the cybercrime empire it once tacitly supported.

The government’s initial inaction drew criticism from its citizens, who demanded stronger measures to protect their interests. This mounting domestic pressure and international exposure made it politically expedient for Beijing to crack down on cybercrime networks.

Furthermore, China’s economic and geopolitical strategies have also contributed to its decision to dismantle cybercrime networks. While facilitating illicit activities, the Belt and Road Initiative remains a cornerstone of China’s foreign policy. However, the association of BRI with projects with criminal enterprises threatened to undermine its legitimacy and effectiveness.

China aims to realign its strategic projects with a more positive global image and secure future international collaborations by cracking down on cyber scam operations.

The Chinese media, which is an extension of the Chinese Communist Party (CCP), celebrated the arrest of the crime kingpins as a ‘death knell’ to the ongoing operations. All the evidence connecting the three crime families with the CCP officials was promptly removed from social media and the internet. However, some official press releases, project reports, and social media pages from the authorities of Kokang are more than enough to connect the dots.

The crime families were also deeply entrenched in other illicit trades, including real estate, hotels, casinos, gems, agriculture, cigarettes, pesticides, and others. They ventured into underground banking and money laundering.

As the crackdown continues, the Myanmar military junta is working with the Chinese government to repatriate foreigners back to China. However, this massive operation has shifted to other regions of Myanmar, and scammers are now targeting English-speaking countries, including the United States.

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Kumar Hemant

Kumar Hemant

Deputy Editor at Candid.Technology. Hemant writes at the intersection of tech and culture and has a keen interest in science, social issues and international relations. You can contact him here: kumarhemant@pm.me

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