An ever-expanding array of underground services and the deft uptake of new technologies including artificial intelligence are fueling the continued growth of Southeast Asia’s cyber scam gangs and helping them stay a step ahead of law enforcement, the United Nations said in a new report released Monday.
The report said most of the estimated $18 billion to $37 billion lost to cyber scam syndicates last year across East and Southeast Asia were stolen by groups based in the countries of the lower Mekong River.
The U.N. calls these countries “a key testing ground” for cyberfraud groups with a growing global reach in the victims they scam out of their money and the workers they lure into prison-like compounds as forced labor to run their cons.
Last year, the U.N. estimated that more than 200,000 people were forced to work in “scam centers” in Myanmar and Cambodia alone.
“This is ground zero for the scamming industry in terms of innovation, in terms of the way that things develop,” Benedikt Hofmann, the U.N. Office on Drugs and Crime’s deputy representative for Southeast Asia and the Pacific, told VOA ahead of the report’s release.
The report details the ways in which the syndicates adopt cryptocurrencies and other new technologies to run their scams and integrate them with the region’s casinos to move their criminal profits around.
“All of this is coming together in basically what is a criminal service economy that’s grown around these scam centers and casinos in the Mekong region. And that’s really been at the core of the growth in this industry that we’ve been seeing,” Hofmann said.
Erin West, a deputy district attorney for Santa Clara County, California, agreed.
“Southeast Asia is absolutely the heart of the massive international threat that is coming from scamming worldwide right now,” she said.
As part of a task force of local law enforcement agencies focused on advanced tech crime, West has become a leading figure in the fight against cyber scammers.
The Mekong countries, she told VOA, are “where the organized crime syndicates have deliberately placed their compounds and their casino towers because … there are places where they know they can conduct this dirty business without much interference from government.”
Besides merely using cryptocurrencies to hide their money moves, the UNODC says the syndicates have a growing and increasingly sophisticated choice of “high-risk virtual asset service providers” — essentially cryptocurrency exchanges operating with little to no rules on reviewing, recording or reporting who is using them.
Perhaps the largest of the syndicates, the UNODC adds, is Huione Guarantee, an online marketplace run by the Huione Group, a sprawling Cambodian conglomerate with ties to the country’s ruling Hun family. Huione Pay, a subsidiary of the group providing a host of currency services, lists Hun To, a cousin of Prime Minister Hun Manet, as a director.
Chainalysis, a blockchain analytics firm, recently estimated that Huione Guarantee has processed more than $49 billion in cryptocurrency transactions since 2021. While much of it may be legal, Chainalysis and others have linked millions of dollars worth of transfers to known criminal syndicates including the Lazarus Group, a hacking collective the U.S. says is helping fund North Korea’s weapons program.
These analytics firms say many of the merchants using Huione Guarantee make thinly veiled offers of services ripe for criminal exploitation, from mule accounts to digital face altering programs and electric shackles for binding “runaway dogs,” a reference to scam center workers who try to escape.
Huione Group did not immediately reply to VOA’s request for comment on the allegations.
Another emerging threat is the scammers’ uptake of artificial intelligence to help write malware programs or generate increasingly convincing deepfakes for video calls.
“It makes things much more complicated for both the law enforcement side but especially the consumer side,” Hofmann said.
“If you receive a video call from someone who you think might be either some official or family member or someone, that’s so many more times more convincing than if you just receive it like a WhatsApp message or some other messenger message out of the blue,” he added.
West says she also has seen Southeast Asia’s scammers using more AI to help them do “exponentially” more with less.
“We’ve seen them using technology to be able to conduct multiple conversations at a time using AI, which limits the need for as many people,” she said.
“It’s scary to realize the access that they have to that kind of technology,” she added. “They’re consistently way ahead of us in a lot of their craft. They’re just very good at it, and things that we used to be able to exploit, we’re no longer able to exploit because they’ve adapted and gotten better, smarter, faster.”
In Southeast Asia, the UNODC report also describes what it calls a “breakdown” in cooperation among law enforcement agencies across some borders, another weak spot it says the cyberfraud syndicates are exploiting.
Despite some successful cases of cross-border cooperation, Hofmann said it remains piecemeal.
Colonel Jessada Burinsuchat, superintendent of the Cyber Crime Investigation Bureau of the Royal Thai Police, echoed that view at a forum on cyberfraud in Bangkok last week, organized by the UNODC.
“We have cooperation with all the neighboring countries, but it’s very little when comparing with Thai police [and] USA, China, Japan or Russia. I can say that around Thailand, maybe we have the very least cooperation. It’s not systematic; it’s very individual, and it’s very … inconsistent,” he said.
At the same event, Hofmann called out a particularly “weak link” in Myanmar, where non-state armed groups have for decades controlled autonomous and often crime-riddled enclaves along the country’s porous border with Thailand. Many of those groups have only grown stronger since Myanmar’s military seized control from the country’s elected government in 2021, setting off a civil war that shows no sign of letting up.
Given the trends, analysts and experts say the region’s cyberfraud epidemic is likely to worsen before it gets better.
“It’s very clear that an ecosystem has been created that fosters innovation,” said Hofmann, making it ever easier for the scammers to work and harder for law enforcement to fight.
“Based on that,” he added, “you can just see the scale of this continuing to expand going forward.”
