US Sanctions Billion-Dollar Scam Networks in Myanmar, Cambodia

The US Treasury has imposed “multiple actions” including sanctions on about 20 companies and individuals to counter cyber scam operations in Myanmar and Cambodia that have targeted Americans and people in many other countries.

The move, announced in a statement by the department on Tuesday, is part of international efforts to rein in a booming industry reportedly involved in the theft of tens of billions of dollars from Americans last year.

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.

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“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 scams include money laundering, illegal gambling and persuading victims to make fraudulent investments, while the operators tend to be people – often Chinese or other 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, across the Moei River from the Thai town of Mae Sot.

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

A spokesman for the Myanmar junta did not immediately respond to Reuters’ requests for comment, and neither did a spokesman for the Cambodian government.

Chit Thu, left, gives a gift to Min Aung Hlaing, Myanmar’s Senior General, in this undated Justice for Myanmar image. Min Aung Hlaing is **wanted by the International Criminal Court** for the slaying of 6,700 Rohingya in 2017.

Violence and coercion at Shwe Kokko

In May Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on the Karen National Army, a militia aligned with the Burmese military formerly known as the Democratic Karen Buddhist Army or DKBA.

It also hit the Karen warlord who leads the group, Saw Chit Thu, and his two sons Saw Htoo Eh Moo and Saw Chit Chit, for their roles in facilitating cyber scams that harm US citizens via its human trafficking and cross-border smuggling.

A key target of the latest sanctions is Shwe Kokko, a major scam hub in Myawaddy Township, in Burma’s southeast Karen State on the border with Thailand. It was established in 2017 by Hong Kong–registered Yatai International Holdings Group and the Karen National Army, Chit Thu’s armed group, according to the United States Institute of Peace.

“Yatai New City is a prominent compound of scam centers in Shwe Kokko, created by She Zhijiang and Saw Chit Thu,” the statement said.

“In eight years, they transformed a small village on the Moei River into a resort city custom-built for gambling, drug trafficking, prostitution, and scams targeting people around the world, particularly Americans.

“Scam operators at Yatai New City reportedly have lured recruits from around the world under false pretenses, only to detain and physically abuse them, while forcing them to work for crime syndicates as online scammers. Escaped victims have reported being held captive until ransoms are paid by their families, beaten for failing to make quotas, and forced into commercial sex work.”

She Zhijiang, 43, is a former Chinese businessman wanted by Beijing, said to have run a criminal gang responsible for controversial mega projects and gaming ventures in Cambodia, Myanmar’s Karen state, plus a lottery venture in the Philippines. He was arrested by Thai authorities in 2022, but has refused to be extradited to China.

The Treasury said Saw Chit Thu had entrusted different aspects of the operations to subordinates as Tin Win and Saw Min Min Oo. “Tin Win and Saw Min Min Oo control property that hosts the scam centres, provide security for those facilitating illicit money flows, and personally run entities that control and support scam compounds in Karen State.”

A diagram of firms linked to scam operations in Shwe Kokko on the Thai-Myanmar border (US Treasury image).

Scam hubs in Sihanoukville

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

“Many of these centres were built as casinos by Chinese criminal actors but became hubs for virtual currency investment scams when that activity proved to be more profitable,” it said.

A key target is TC Capital Co Ltd, which it said owns a complex of buildings, including the Golden Sun Sky Casino and Hotel, “from which virtual currency scams and other illegal activities have been carried out, sometimes by victims of human trafficking.” The casino also helps to launder the proceeds of the criminal activity in adjacent buildings, it said.

TC Capital was founded by Dong Lecheng, who had invested in several local real estate developments linked to modern slavery and virtual currency scams, it alleged. “Before moving to Cambodia, Dong was convicted of money laundering in China in 2008 and has been investigated for bribery, as well as for operating illegal online gambling rings advertised to Chinese nationals.”

Some compounds in Cambodia resemble 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.