Caught between the competing pressures of China and the United States, Thailand finds itself navigating an uneasy space between conflict and cooperation in its efforts to suppress scam networks along its borders with Cambodia and Myanmar.
Authorities in Beijing and Washington launched a series of tough moves over the past year to tackle cyber-enabled fraud, money laundering and underground banking in Southeast Asia.
Chinese scammers exploited the hunger for investment and flawed law enforcement, as well as the lawless environment in countries like Cambodia, Laos and Myanmar, to establish their illicit business. The victims of their crimes were not just Chinese but people from around the world.
In the US alone, authorities reported more than $5.6 billion in financial losses to cryptocurrency scams in 2023, with an estimated $4.4 billion attributed to so-called “pig butchering” schemes, most prevalent in Southeast Asia, according to a UN report released in April.
A pig butchering scheme, known in Chinese as shā zhū pán, is a long-term investment and romance scam where fraudsters build trust with victims over time before tricking them into investing in fake opportunities, typically involving cryptocurrency
Countries in East and Southeast Asia combined have lost up to an estimated US$37 billion during that same year, the report of the UN Office of Drug and Crime revealed.
China gets tough
In a demonstration of China’s intent to crack down on the scamsters, Beijing sent Public Security Assistant Minister Liu Zhongyi to the border areas again in the middle of December to follow up on the task of eliminating scam cities. Liu had kicked off his mission over a year ago.
He met with many senior security officials in Thailand, seeking more cooperation and actions to continue the crackdown on transnational crimes. Thousands of Chinese are not only involved as operators, investors and suspects but are also victims of scams.
China launched a trilateral cooperation with Thailand and Myanmar early this year, following the controversial case of Chinese celebrity Wang Xing, who was reportedly lured into a job in a scam city in Myanmar’s Myawaddy. He had crossed the border from Thailand’s Mae Sot in Tak province, in January.
The scam hubs started mushrooming near the Myanmar-Thailand border, particularly in Karen State, in around 2019. Since then they have become centers for cybercrimes, where trafficked individuals are forced into online fraud.
A complicated web of crimes
Key hotspots include Shwe Kokko, a hub for scams, money laundering, human trafficking and arms trading. Another major hub, KK Park in Myawaddy, mirrors Shwe Kokko’s role, notorious for forcing laborers into internet scams.
These operations are led by Chinese criminal groups with protection from local ethnic armed organizations and the Myanmar military’s ally, Border Guard Force, which remains a key enforcer for many scam centers.
The situation is complicated at this moment as the Myanmar military junta has intensified its offensive operation along the border to suppress criminal activities in the scam cities, including KK Park, which it believes is feeding the dissidents.
The suppression took place as the junta-led State Security and Peace Commission planned to call a general election on December 28, January 11 and January 25, widely seen as an attempt to legitimize its power grab.
During a meeting with Direk Bongkan, chief of the army’s neighboring coordination center, Liu praised the cooperation among Thailand, Myanmar and China in cracking down on criminal networks in the Myawaddy area. More than 6,600 Chinese suspects have been arrested and repatriated.
The Myanmar government has now established a special task force to address the problem and, together with the national police, has conducted on-site inspections of more than 400 buildings in KK Park, Liu was quoted as saying in the meeting.
The cooperation likely yielded a good result for Beijing, as more than 20,000 Chinese suspects and victims were repatriated to China since early this year.
She Zhijiang, founder of Shwe Kokko, was extradited from a Bangkok prison to China in November. Another key suspect, Yuan Ke Song, wanted in Beijing in connection with many corruption cases, was also in the process of extradition.
Negative side effects
Thailand’s “seal-stop-safe” measures to pressure the scammers come at cost, because of their consequences for border economic activities.
Beginning in February, the Thai authorities cut electricity and internet signals, and banned the export of fuel from five locations, including two points from Mae Sot district to Myanmar’s Myawaddy, where many scam cities were located.
Thailand’s fuel exports were hit the hardest. A total of 249 million liters of diesel, gasoline, naphtha, solvent, and liquid petroleum gas were exported last year. The Mae Sot Customs recorded no export of these products since February.
Thailand would lose 5.5 billion baht in income from fuel exports by the end of this year, according to the Tak Provincial Chamber of Commerce.
Most of the fuel is exported for consumption by ordinary people in Myanmar, not only for the scam cities, said Paniti Tangphati, advisor to the chamber of commerce. Thailand exported via Mae Sot on average nearly a million liters of fuel, notably diesel and gasoline, he said.
“According to our calculation, only 10 per cent of that amount generates power for the scam city around the same size as the notorious Shwe Kokko,” Paniti said.
Before the Myanmar military crackdown on the scam cities, the illicit business centers reportedly imported fuel from other sources for their electricity generators to supply power for their business operation.
Security sources indicated that some of the illicit online businesses relocated to Southern Shan State to seek protection from the United Wa State Army and the Shan State Progressive Party/Shan State Army.
War against scam army?
On the eastern side of the border, the Thai authorities, politicians from the government and opposition, framed the transnational crime and cyber fraud in the context of Thailand’s border conflict with Cambodia.
Thailand has had armed conflicts over the boundary disputes since late May, which erupted further into hostilities in late July and early December.
Thailand accused Cambodian leaders of involvement in the scam activities. Bangkok said the government in Phnom Penh was exploiting resources from scam centers, casinos and other cyber-related fraud to fuel its armed conflict with Thailand.
The Thai authorities issued arrest warrants for many Cambodian businessmen and politicians, including Kok An, Ly Yong Phat, Chen Zhi and Yim Leak, who are cronies of Cambodian leaders. Their assets worth more than 10 billion baht in Thailand were reportedly confiscated over the past months.
The move aligned with the sanctions imposed by Washington in October on 146 targets within the Prince Group Transnational Criminal Organization (Prince Group TCO), a Cambodia-based network led by Chen Zhi, a Cambodian national of Chinese origin.
Cambodian senator Ly Yong Phat was sanctioned by the US in September 2024, while Phnom Penh-based Huione Group has been accused by the US Treasury Department of moving money for criminal groups, including Chinese gangs that operate vast networks of scam compounds in Southeast Asia and North Korean crypto hackers.
Thailand ramps up operations
The Thai military operations, both ground and air strikes in December, targeted many scam centers situated in the Cambodian border provinces, including Oddar Meanchey, Banteay Meanchey and Pursat.
Winthai Suvaree, spokesperson for the Army, defended the military action, explaining that Thailand’s targets were military strongholds disguised as civilian structures that were used not only to command military operations but also served as hideouts for scam gangs.
“As a result, Thailand’s strikes inevitably affected those scam groups as well, significantly constraining and disrupting their operational bases,” he told reporters.
The 2nd Army Region, however, has made it clear that Thailand is not fighting Cambodia but confronting global crime. “This is not a border war; it is a war against the Scam Army.”
These transnational criminal networks pose a direct threat to the global financial system, cybersecurity and public safety across many countries. The impact of the Scam Army is not confined to any single region and extends to people, businesses and national security systems worldwide, the official Facebook page of the 2nd Army Region said.
“Thailand’s actions ranging from cutting logistical and operational lifelines, degrading the capacity for armed violence, to dismantling transnational criminal support structures are guided by clear principles aligned with international norms,” it said.
