A number of Chinese criminal syndicates operating out of Myanmar and other Southeast Asian countries have been exploiting modern-day slaves to defraud thousands of Americans, resulting in a billion-dollar scam industry. This alarming revelation has come to light through the experiences of victims, investigators, and even the scammers themselves, a CNN report said.
These scams, known as “pig butchering,” involve building trust with victims through online relationships and then persuading them to invest in fake cryptocurrency platforms.
What is ‘Pig butchering’
- ‘Pig butchering’, derived from the Chinese term “sha zhu pan,” is a rapidly growing scam where victims are initially contacted through unsolicited messages. The name ‘pig butchering’ comes from the analogy of fattening a pig before slaughtering it. This scam is also known as the romance scam, as it often exploits people’s desire for love and companionship
- Scammers work to establish a connection with their targets, fostering a sense of trust. Once a relationship is built, the fraudsters persuade the victims to transfer large amounts of money to bogus investment platforms, under the guise of educating them on how to earn substantial profits through cryptocurrency or other asset trading.
- These platforms are deceptive, and the profits shown are fabricated. In the end, the scammers abruptly disappear, often absconding with millions in ill-gotten gains.
The setup: A friendship that cost a million
- As per the CNN report, CY, a 54-year-old from the San Francisco Bay Area, became an unwitting victim of a sophisticated scam. He was approached by ‘Jessica’, who posed as an old colleague. Their friendship, built over chats and shared experiences, led to Jessica introducing CY to cryptocurrency investment. The initial returns were staggering, but it was a setup. CY lost over a million dollars when he was suddenly locked out of his account, and Jessica vanished.
- According to a Reuters report, someone claiming to be a young woman called Emma reached out to the 71-year-old man from California. They developed a connection, during which she persuaded him to transfer cryptocurrency to a site that was allegedly a digital currency exchange. Throughout their conversations, “Emma” blended casual chatter and investment advice with pictures, including one she claimed to be of herself.
Global fraud epidemic
Victims are slowly lured into investing more money on fake platforms, only to be stripped of their funds. CNN’s investigation reveals the scale of this fraud, which has seen a dramatic increase in losses from $907 million in 2020 to $2.9 billion by November 2023. FBI special agent James Barnacle describes this as the “professionalization of fraud services,” with the scammers becoming increasingly sophisticated. He warned, “The bad guys are getting good, and they’re getting better.”The full extent of the financial damage remains unclear, as many victims, hindered by embarrassment, refrain from reporting these crimes to the authorities.
The hidden victims: Modern day ‘slaves’
- Many scammers are themselves victims of trafficking. Rakesh, an Indian national, was lured to Thailand with the promise of an IT job but ended up in Myanmar, forced to scam people under threat of death. He spent 11 months impersonating a Salt Lake City investor, “Klara Semonov,” to defraud victims, the CNN report said.
- Enticed by the prospect of professional employment in Thailand, thousands from around the globe find themselves trafficked to illicit centers in Myanmar. There, they are coerced into fraudulent activities, including the theft of millions in cryptocurrency.
- According to United Nations estimates, as many as 120,000 individuals may be confined in various facilities throughout Myanmar. Additionally, approximately 100,000 more are believed to be detained in Cambodia and other regions under conditions tantamount to contemporary slavery.
Crime zones: Exploiting economic policies
- Special economic zones in Southeast Asia, particularly in the Mekong region, have become breeding grounds for these criminal operations. The situation is exacerbated by the geopolitical landscape of Southeast Asia, particularly in regions like the Mekong, where special economic zones, often poorly regulated, have become hotbeds for organized crime. The ongoing civil war in Myanmar and the Covid pandemic have further facilitated the expansion of these scam operations.
- Jeremy Douglas from the UN Office on Drugs and Crime highlights the lack of regulation in these zones, making them attractive to organized crime syndicates.
- The Thai government has initiated campaigns to raise awareness and prevent scams, but the problem persists with hundreds still being trafficked weekly. Thai Justice Minister Tawee Sodsong plans to investigate the use of Thai telecommunications services in these operations and target corrupt officials aiding human trafficking.
The way out
- While some victims like Rakesh eventually escape, many remain trapped in these scam compounds. Mechelle Moore, founder of the NGO Global Alms, emphasized the enormity of the issue, saying, “It’s terrifying to think what the scale of this is like, and then how much we can’t do to help them.”
- On the other side of the world, victims like CY are still trying to rebuild their lives, burdened with debt and loss. CY reflected on the plight of those forced into scamming, saying, “The bigger victims are out there as slaves working for them. They don’t want to do this, but they don’t have a choice if they want to survive.”
(With inputs from agencies)
