People, suspected of being involved in online scams, gathering during a raid on a scam centre in Phnom Penh in October. -AFP
WASHINGTON: The US Justice Department announced the creation of a new "Scam Center Strike Force” to combat a surge in cryptocurrency‑investment fraud by transnational criminal organizations operating out of South-East Asia.
The interagency task force is designed to investigate, disrupt and prosecute the most egregious schemes, estimated to be defrauding Americans of nearly US$10 billion annually, it said in a statement on Wednesday (Nov 12).
Criminal networks are running the schemes from compounds in Cambodia, Laos and Myanmar, where fraudulent revenue can account for nearly half of local GDP in some areas.
Victims in the US are often tricked into transferring funds to fake cryptocurrency websites and applications hosted by US companies, only to have the money laundered abroad.
Both the US and China have pressured South-East Asian nations to crackdown on the operations, as citizens from the two countries have been targeted. Earlier this week, Thailand extradited at Beijing’s request a Chinese-born Cambodian accused of involvement in the scam operations.
US Attorney for the District of Columbia Jeanine Pirro leaned into the involvement of ethnic Chinese or citizens in the operations, many of whom were pushed out of mainland China amid Beijing’s own pressure on gambling and scams.
"This pandemic is certainly a generational wealth transfer from Main Street USA into the hands of Chinese organised crime, making it both a national security problem and a homeland security problem,” Pirro said.
The strike force will target US-based infrastructure that facilitates the scams, including internet service provider and social media accounts used by scammers, and will collaborate with American companies to sever access to the offshore scam centres.
The effort involves the US Attorney’s Office for the District of Columbia and the Justice Department’s Criminal Division along with the Federal Bureau of Investigation and the Secret Service.
The task force has already seized and forfeited more than $400 million in cryptocurrency and announced forfeiture proceedings for an additional $80 million to be returned to victims.
The chairman of Cambodian conglomerate Prince Group was charged last month by the US with running a "sprawling cyber fraud empire” that led to the seizure of Bitcoin worth about $15 billion in what prosecutors called the largest ever forfeiture action.
Separately, the Treasury Department’s Office of Foreign Assets Control designated Myanmar’s Democratic Karen Benevolent Army and four senior leaders for supporting scam centres targeting Americans.
Myanmar’s military government has detained thousands of foreign nationals this year in connection with online scams and announced plans to demolish more than 600 buildings linked to these operations.
Myanmar’s foreign affairs minister Than Swe said that in the two year period to November, some 67,982 foreign nationals from 52 countries who had illegally entered Myanmar through neighbouring countries were deported.
He said the gangs and armed groups have been getting internet, electricity, and financial services from neighbouring countries and urged greater cross-border cooperation to combat transnational crimes effectively, according to a government statement Thursday. - Bloomberg
