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A new Asia/Pacific Group on Money Laundering report says parts of the Southeast Asia cyber scam industry grew from gambling compounds that lost revenue —during the Covid-19 pandemic. Criminal groups then converted some casino and hotel sites into fraud centres staffed by human trafficking victims.
Good to Know
- Some scam hubs developed inside former illegal or unlicensed gambling compounds.
- Border regions and special economic zones remain common locations.
- One Philippine raid rescued around 900 workers and recovered about $1.8 million.
Covid Closures Changed Criminal Operations
Lockdowns and tighter border controls damaged gambling income across Southeast Asia from early 2020. According to the APG report Cyber Scam Hubs and Human Trafficking, organised crime groups responded by reusing some casino and hotel compounds.
“These casinos and hotels were repurposed into cyber scam hubs populated by human trafficking victims to conduct scams,” the APG said.
The report did not accuse licensed land-based casinos of involvement. It indicated that some converted sites may already have run illegal or unlicensed gambling operations.
Scam hubs now operate near borders involving Thailand, Myanmar, Lao PDR, Cambodia and China. APG also named locations in the Philippines, including Bamban, Cebu and the Clark Free Port Zone.
Workers came from India, Africa, South Asia and Southeast Asia. Operators often used shell companies and apparently legitimate businesses to hide control of the compounds.
Philippine Raids Exposed Scam Networks
Philippine authorities raided one 2.6-hectare site suspected of offshore gambling, human trafficking, fraud and money laundering. Officers rescued around 900 workers and later found PHP113 million, or about $1.8 million, inside safes.
Another case in Bamban involved romance and crypto investment scams. Trafficked workers persuaded victims to send money through fake relationships or promises of high returns.
Investigators used suspicious transaction reports, surveillance and digital forensic tools. Cooperation with Australian and Chinese authorities also helped trace funds and identify victims.
The Philippines ordered Philippine Offshore Gaming Operators to close by the end of 2024. APG said the ban quickly reduced cyber scam hub activity in the country.
Even so, criminal groups continue to spread operations across several sites. APG said 65 percent of members identified shell firms and complex corporate structures as major money laundering methods.
Mitsutoshi Kajikawa, APG co-chair and Japan Ministry of Finance deputy vice minister, said: “This report demonstrates the need to ensure that fraud committed through cyber scam hubs is appropriately prioritised in order to promote the mobilisation of AML [anti-money laundering] tools, international cooperation and asset recovery to combat fraud and associated money laundering.”
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