U.S. cracks down on China-linked cyber scam networks

The United States announced sanctions on Tuesday against operators of cyber scam hubs in Myanmar and Cambodia, targeting a fast-growing fraudulent scheme that the Treasury Department says stole “tens of billions” of dollars from Americans last year.

U.S. officials say crime gangs have trafficked hundreds of thousands of people into scam compounds in Southeast Asia, especially near the Thailand-Myanmar border. Lured by fake job ads, they’re trapped in debt and forced to run online scams. The people they target are pushed into bogus investments and other frauds.

“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,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence John K. Hurley.

Operations involve money laundering and illegal gambling

According to the Treasury, these operations do a bit of everything from laundering money and running illegal betting to coaxing people into bogus investment platforms.

The workers carrying out these operations are often foreigners who have been trafficked, abused, and compelled to keep the fraud going from inside guarded sites.

Among the targets are nine companies and individuals linked to Shwe Kokko, a frontier town in Karen State on Myanmar’s border with Thailand. Washington says the new measures are designed to cut off cash flows to networks that have thrived in territory controlled by militias and by the junta alike.

At Shwe Kokko, recruiters lured people from many countries with fake job offers, then trapped and abused them, the Treasury said. They were forced to run online scams under debt bondage, faced violence, and were threatened with forced prostitution.

U.S targeted Cambodia-based scams run by Chinese criminal networks

The United States also sanctioned 10 entities in Cambodia. U.S. officials say centers run there by Chinese criminal networks have specialized in digital-currency swindles. Amnesty International has described some Cambodian compounds as resembling prisons and accused the government of turning a blind eye, allegations that officials in Phnom Penh deny.

Fraud hubs have spread swiftly in Myanmar since the 2021 military coup, moving beyond areas long controlled by militias into places under direct junta authority, according to a report by the Australian Strategic Policy Institute.

Shwe Kokko itself was set up in 2017 by Hong Kong–registered Yatai International Holdings Group together with the Karen National Army, an armed group allied with Myanmar’s military, the United States Institute of Peace has noted. Yatai is already under sanctions, and the KNA has previously been sanctioned.

Weak response to China-linked fraud puts Americans at risk

In July, the U.S.-China Economic and Security Review Commission said America’s response to a multibillion-dollar fraud industry tied to Chinese criminal organizations is “fragmented and under-resourced,” raising the risk that schemes will increasingly target U.S. residents and scale quickly with new technology.

The commission said U.S. losses from China-linked fraud likely far exceeded $5 billion in 2024. It is an increase of about 40% from the prior year, with Americans becoming prime targets since the COVID-19 pandemic.

The commission described scams connected to transnational syndicates involved in drug trafficking and money laundering.

The groups reach Americans through text messages, social media, dating apps, and job sites. The report also said Beijing has used its own crackdown on scam centers to widen its law-enforcement footprint in Southeast Asia, potentially boosting China’s sway with regional governments and aiding intelligence work.

“These things are industrial-scale fraud factories that are using some of the most modern technology available, and their use of that technology is allowing them to scale these things very quickly. … I don’t even think American law enforcement has figured out how to get their heads around this yet,” said USCC commissioner Mike Kuiken.

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