The cities built on scamming us all

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1:14Jonathan Head:Have you ever received a call from a stranger regarding student loans you do not owe? An unpaid parking ticket for a car that you don't own. Well, I certainly have, and I've wondered where those calls come from. Today, we are going to take you there. Picture a compound in Southeast Asia, maybe Cambodia or Myanmar, surrounded by lush jungle. It looks fairly ordinary. Apartment complexes, streets, shops, all recently built, Some half-constructed. But look closer. And you'd see bars on the windows. Armed security standing guard. Generators humming. This whole place is hiding a dark secret. An entire industry of scams, human trafficking, corruption, and money laundering.

2:04Jonathan Head:And it's not the only place like this. From the BBC, I'm Asma Khalid in Washington, D.C. And today on The Global Story, an inside look at the highly lucrative scam factories of Southeast Asia and how they're making money by duping people around the world.

2:25Jonathan Head:Before we dive into today's episode, I just want to shout out one of our listeners who reached out to us named Hans. Hans wrote us a message suggesting that we make an episode about scam centers in Southeast Asia. In that message, Hans wrote us that an interesting perspective would be the views of the victims, both people who've lost their money in one of these scam operations, but also one of the people who've been trafficked to perform the work. And Hans asked, how are victims coping and how are the perpetrators brought to justice? And then wrote this line that has stuck with me, saying, I am writing this as a victim myself.

3:03Jonathan Head:Now, Hans, we had in fact already been planning to make an episode on this. We, in fact, had recorded this recently and were just waiting for the right moment to run it amidst all the craziness happening in the world. But then we heard from you and realized that there are probably loads of other listeners who would really benefit from hearing this story. So just a reminder that we do read those emails that you all sent. You can drop us a line at theglobalstory at bbc.com. And thank you in particular to Hans for reaching out. Jonathan, it's a pleasure to have you back on the show. For those who may not know who you are, could I just have you briefly introduce yourself?

3:40Yeah, I'm Jonathan Head. I'm the BBC Southeast Asia correspondent.

3:44Jonathan Head:Well, Jonathan, we have you on the show today because we want to talk about scam centers, a phenomenon that you've been following for years. And well, I think we are all familiar with scams. I will say I've certainly been on the receiving end of receiving a good amount of phone scams, voice text scams, we don't really know where they originate from. And we're going to explain throughout our conversation what exactly scam centers are. But first, Jonathan, my understanding is you are one of the few journalists who have actually visited a place which there is strong evidence to suggest is actually a scam city.

4:23Yeah, there's no question it is a scam city, although the people running it were denying that and they would never have let us in if they didn't think they could have got that point across. We went to a place called Shweikoku. Well, there are few places on earth stranger than this one. It is the most bizarre place. Yet I had invited us to see Shweikoku, as they call their city, to show they hoped a different side. The whole time I was there, I was kind of shaking my head as though I was in a dream. It's actually inside Myanmar, on the border with Thailand, in an area called Karen State. It's a very remote, war-torn area.

5:00It's been war-torn for decades. And as long as I've known Karen State, when you look across from the Thai side of the border, it is just jungle and mountains and sometimes gunfire and artillery. We are in the middle of a war zone in Myanmar, and yet the scale of the building, the ambition of this project is breathtaking. So to see this shimmering, almost like a mirage of a city that just appeared, and it really did, it was built in less than 10 years, sitting on the other side of the very narrow river that divides the two countries is extraordinary. Everywhere they've put up these huge billboards promising in three languages that forced labour and human trafficking are no longer permitted.

5:38There was, unexpectedly, a library and even a not entirely convincing branch of Starbucks, but we saw few customers.

5:53I mean, it was built by a Chinese syndicate.

5:56Jonathan Head:When you say syndicate, what do you mean exactly? Well, think of organized crime, because that's what it is. This is a bit like the mafia. OK, it's Chinese mafia. I mean, China is a massive country. It's always had on the southern coast of well-known organized crime. That's nothing new. But given the size of China and the fact that China enforces its laws very strictly indeed these days. It's quite hard to be an organized criminal there now. And in the last 10 years, we've seen huge numbers of Chinese wanting to make money through questionable methods coming into Southeast Asia. And the person who founded Shue Koku, this man called Shuzi Zhang, was one of these people.

6:34He started in the Philippines where gambling is legalized, moved to Cambodia where it really took off. And then he decided to build this city.

6:42Jonathan Head:When you say city, Jonathan, just to be clear, can you describe what you saw? It is a proper city. Shining tower blocks in the midst of this jungle and this war zone, high-rise hotels, casinos. You just don't see that anywhere else in that region. And there's no question that the only business model there by the time we saw it, which is just over a year ago, was through illegal business. There's nothing. It's very hard to get to. You have to cross the border illegally. We had to be smuggled across in a boat. And I think they genuinely thought that they could turn their scam city into something bigger.

7:15They had entertainment parks, amusement parks. They had a go-kart track. Although there was no access at all there to flights, tourists or anything like that. I mean, they talked to us and said, we want it to be like Las Vegas. And I said, but how's anyone even going to get here? So it was very unusual because actually there are dozens and dozens of what we call scam compounds in the same area on this other side of the river from Thailand. Most of them don't look like cities. Most of them look like industrial estates. They're much, much more low profile. The reason they put themselves there is on the Myanmar side, it's a complete lawless zone.

7:51There are competing armed groups, warlords who need to make money and are very happy to let people do whatever they want so long as they get paid. But Shue Koku was on a whole different scale. And I think the only reason they allowed us to go there was because the boss, Shue Zee Zhang, this young Chinese man, had actually been arrested in Thailand. And we realized when they brought us over there that they actually thought that perhaps Western media coverage might help to get them released. And we had to say to them, we really don't think it will, but that was their view.

8:21Jonathan Head:Did you go inside buildings? What did you see? And how was it clear to you that scamming is the primary business here? They actually wouldn't allow us to go into any of the buildings. But we already knew that scamming was going on there because we already had met people who'd come out of Shweikoku, as had many other groups who were rescuing people. There was no question was going on. And the other reason that we knew it was scams is you looked at the amount of power. And by the time we got there, the Thais had cut off power. They cut off telecoms. Telecoms is important. If you're going to do online scamming, you need good internet.

8:55So they're all using Elon Musk's Starlink service. They're Starlink satellite dishes littered across the roofs. This part of Myanmar is completely cut off from the rest of Myanmar. It's a complete war zone. Your only access is Thailand and the Thais have also cut it off too. So, you know, it's only illicit businesses that can work there. And we've spoken to enough people who'd done scamming inside Shweikoku to know that that was the main business there.

9:20Jonathan Head:Jonathan, it is an extraordinary scene to imagine. And I want to understand better how these centers actually work. What is a scam compound? It's very simply a place that provides the facilities you need to run organized online fraud on an industrial scale. A Chinese syndicate will make an arrangement where they're given protection, they get access to utilities, and they build their compounds. And they then rent out to other syndicates quite often to come in and run scams. And they run them ruthlessly to make money. And they make masses of money. We're talking tens of billions of dollars a year.

10:01Jonathan Head:Tens of billions of dollars. Wow. Jonathan, you've alluded to the fact that this is happening in Myanmar. And it seems like this opportunity to create a scam city is possible in Myanmar because it's particularly lawless, at least in that region of Myanmar that you visited. And I'd really like to get a better sense of the context here. Can you remind us what is happening in Southeast Asia that make it possible for criminal gangs to build these compounds, and in some cases, keep people hostage there to carry out these scams? I think Myanmar's a special case because it's collapsed into a civil war since the military seized power in 2021 in a very unpopular coup and provoked a popular uprising, which has become an armed uprising.

10:50So the country's at war. But Karen State, where these scams have been established, actually has been at war longer than that. It's desperately poor. It's got competing warlords. It's very easy for anyone who's got money to do deals with these warlords. But there are also extensive scam networks in Cambodia, which is notionally a properly governed country with a stable government. And there it's to do with collusion with the ruling elite in Cambodia. One party has run that country ever since the end of the Civil War in the 1990s as one strong man that dominates in a man called Hun Sen. But in practice, Cambodia also has tolerated huge amounts of scam activity.

11:32Jonathan Head:You mentioned that it's a lucrative business. How lucrative are we talking about? You had said tens of billions of dollars. Say, what percentage of the GDP of Myanmar are these scams? Is it possible to quantify it in that way? Well, people have tried. I mean, it's pretty difficult to quantify anything in Myanmar right now. It's so much chaos. But in Cambodia, which is a smaller economy than Myanmar, admittedly, some estimates put the scam economy at more than half of the entire national economy. These are informed estimates by good researchers. In Myanmar, it might be 20 or 30 percent of the economy.

12:04And Myanmar is enormous. That's huge. It makes it hard to stamp out because very powerful people are making huge amounts of money out of it.

12:12Jonathan Head:What sorts of scams are we talking about? They've become increasingly sophisticated. They've moved on from the classic, this is a great investment opportunity, you can't miss it, to targeting vulnerable people, people who are lonely, people who are elderly, and building a relationship and they have different teams and we've talked to people involved in it. They have the chatting team, they have the romance team that builds a romance. So usually somebody, often an attractive young woman, will build up over quite a number of weeks, a relationship on WhatsApp or other social media messaging apps with somebody, really sort of build a friendship and then start talking about the amazing amounts of money they're making.

12:53And then they'll pass them on to the next team who will be saying, look, this is an incredible opportunity. You know, what's-her-name has passed you on to us. It'll just keep on evolving. Some of the people we've spoken to said they use AI to make them into completely different people. And AI is so good now. You can have a big, dirty South Asian man who comes across as a very pretty Southeast Asian woman to whoever's on the receiving end of that. It's endlessly inventive, and they will keep on coming up with more and more ways. So, you know, what we think of as the most obvious scams, you know, a message telling you to click on a link, they understand that people are now wising up to that.

13:32Jonathan Head:Scams are undoubtedly a global phenomenon, but who are the primary targets of these scam compounds? Who are they trying to deceive? It's interesting looking at the people who work in the scam centres because that tells you a lot about the victims. They pick people who've got language skills. So you get a lot of East Africans who can speak English well. You get a lot of South Asians who can speak English well. A lot of Chinese, quite a few Indonesians. It's a big country with a large population. I haven't heard of anyone speaking any of the European languages in these scam centres, which is interesting that they don't seem to see that as a target.

14:07But it is the English-speaking world, the Chinese-speaking world, primarily that they're targeting.

14:21Jonathan Head:So I feel like we have a better sense of what's happening inside these scam compounds, but I'd like to get a better sense now of who is working in these compounds. Well, they come from all over the world, and it's striking that the business has grown particularly since the pandemic. That left huge numbers of people in Africa and Asia no longer able to get work, young people in particular, desperately looking for jobs. A lot of Ethiopians, a lot of South Asians, Bangladeshi, Pakistani men who might have gone to the Gulf, for example, and really struggled to get a job in somewhere like Dubai or Qatar.

14:58And these seemed like golden opportunities to them. And they see these offers.

15:04Jonathan Head:When you say offers, there's advertisements? Do these scams compounds advertise in newspapers? Or how do they find these people? Not in newspapers, but you'll get them on social media, on Facebook, a lot of Facebook pages, certainly on messaging apps. A lot of the people we've spoken to were hired after recommendations from people they thought were friends. And that's why they trusted them. And they'll usually say the job's in Thailand, which is an attractive place. Most people feel it's a good place to go. They will have tickets booked for them. They will arrive in Bangkok and then they get taken in a car.

15:39They don't know where they're going. Going into Myanmar, they won't even know when they've crossed the border because they'll go across an illicit route. By that stage, coercion usually starts. Their passports will have been taken away.

15:50Jonathan Head:And what job do they think they're getting? They always think it's going to be telephone work, you know, sales work, basic computer work. That's what they think they're going to be doing. And so they're coerced, you say, in many cases, across the Thai-Myanmar border. And then what happens? Well, then you are inside the scam compounds that have armed guards in Myanmar, especially because it's these armed insurgent groups who are actually enabling the scam centers by guarding them on the outside. And you will have guards on the inside, too, who enforce the routines and discipline. They run a very, very harsh ship.

16:30You don't step out of line. And they told us when they arrive, they're usually very exhausted. They're allowed to sleep that night. But they say the next morning you're going to have to work. And when they go in, they're usually presented with a contract that says you have to work for us for maybe 18 months or two years. And if they don't want to sign the contract, that's when they'll get beaten or given electric shocks and warned that things will get much worse if they don't. And they're also told they've got targets they've got to hit. How many hours are you going to have to work a day? You take your meals at specific times.

16:57You often work 15, 16 hours a day. It's a very, very harsh routine. There's the famous case of the Chinese actor, which sparked off a real crackdown under Chinese pressure at the beginning of last year because he came to Thailand thinking he was on a production shoot. You know, he was a bit short of work. Somebody said, there's a film shoot. We'd like you to take part in it. He had no idea that he'd be getting to Myanmar.

17:18Jonathan Head:So a Chinese actor ended up in one of these scam compounds. That was a particularly celebrated case because he was reasonably well-known. And once he disappeared and his friends had known what he was doing. People were wondering what happened. Well, and more than that, they kicked up a huge social media fuss. And the Chinese government was embarrassed because they'd already shut down the scam centers on the Myanmar-Chinese border very effectively. And they told their population, we've got it under control. And suddenly, a reasonably well-known actor finds himself caught on the Thai-Myanmar border.

17:47So it escalated the pressure to do something about the scams. His was an unusual case because he was well-known. Most of the people who go in, of course, are anonymous. They've got one or two family members. I mean, I still get the messages pretty much all the time. I've got a friend, I've got a relative who's trapped in this compound or that compound. They're being beaten, they can't get out. And it's much harder to get any action for those people because they're not well known. We met one young Bangladeshi man called Arian. And his was an interesting story because he'd escaped, but he'd come back to the border to try to get his friends out.

18:22And his case was interesting because he told me that he'd actually been rather good at scamming. and he described his feelings about it. He said, I was masquerading as a young woman, even though he was clearly a young man. Through AI.

18:35Jonathan Head:Through AI. They put a different image up on the screen for the people receiving his calls. They changed his voice. And he said the turning point for him came when he'd become very friendly with this older Middle Eastern man in the Gulf. And he got this man to part with huge amounts of his savings. But this man was so beguiled by him and by his promises of getting rich, that he told him he was going to sell his wife's jewelry to hand more money over. And this young Bangladeshi man said to me, at that point, I felt really bad. But he said, I couldn't tell him. I couldn't warn him because we're being supervised the whole time.

19:11I knew if I tried to warn him, I'd be beaten or worse. But he said, after that, I was determined to get away. And because he was a very good worker, he was asked to escort one of the workers they'd beaten up very badly to a hospital that was very, very close to the river that divides Thailand and Myanmar. And after he dropped this person off, he sneaked across the river and had a very hair-raising journey. But finally, he was rescued by Thai soldiers. And because he persuaded them he was a victim of trafficking, they processed him and he was allowed to leave. But he'd come back to Thailand because he said, I left friends in this place.