Cyber Scamming as a New Destination for Human Trafficking Victims
The 2023 State Department Trafficking in Persons Report (TIP report) highlighted a new form of trafficking that has largely gone unnoticed outside victim support circles, but which has serious implications not only for ending the scourge of human trafficking but also for global efforts to combat corruption and cybercrime. The phenomenon of online romance, cryptocurrency, and other scams dates back decades, but the Covid-19 pandemic drove a pivot toward widespread use of human trafficking to perpetrate these crimes. Nongovernmental organizations in Southeast Asia estimate that there are tens of thousands of trafficking victims being forced to work as cyber scammers, in many cases locked in former casino complexes or vast office parks under armed guard.
Traffickers’ connections to corrupt officials have largely protected these operations from law enforcement scrutiny, while the proceeds from cyber scams, which are estimated to run into the billions of dollars, not only fuel organized crime and arms trafficking but also provide a major source of income for authoritarian leaders, including Myanmar’s military junta. Americans lost $2.7 billion to “pig-butchering” scams in 2022. These involve scammers developing an online relationship with their victim (“fattening them up”), drawing them into a cryptocurrency investment scam that initially appears to yield substantial returns, then ultimately cleaning out the account and disappearing when the scammer believes they have taken as much money as they can from the victim. Efforts to combat this growing phenomenon have focused on supporting victims who escape, and warning potential victims before they are recruited into the scams, but relevant governments and companies have not undertaken a coordinated strategy to address the growing cyber-scam industry and its increasing connection to human trafficking.
Q1: Why has the cyber-scam industry grown so rapidly in the last three years, and why are trafficking victims being used to perpetrate the scams?
A1: Before the Covid-19 pandemic, Southeast Asian vacation towns and special economic zones became host to a huge influx of Chinese nationals, including a few who took advantage of local corruption to grow large-scale criminal enterprises. Hotels and online and physical gambling operations thrived, but so did prostitution, violence, and cyber scams that targeted people inside China. Cyber scams—especially cryptocurrency scams—are traditionally hard to trace and help criminal bosses skirt sanctions by avoiding the formal international banking system.
The cyber-scam industry’s shift toward human trafficking began when Cambodia’s ban on online gambling in 2019 significantly limited casinos’ and hotels’ revenues and led to a decrease in real estate prices in Southeast Asian casino towns. In 2020, the Chinese government’s Covid-19 response forced many Chinese expats in Southeast Asia to return home and prevented its citizens from traveling abroad for work or vacation. With normal revenue streams stemmed, owners of hotels and casinos colluded with criminal groups to convert unused space into scamming compounds. The mass exit of individuals who had voluntarily participated in cyber scams led cyber criminals to begin to staff their operations with trafficked foreign nationals instead.
Q2: What is the scale of the problem, and how are victims recruited and trafficked?
A2: The Covid-19 pandemic fueled economic desperation that made people more susceptible to trafficking, and although it is difficult to know for certain how many people have been trafficked into scamming, the Office of the United Nations High Commissioner for Human Rights (OHCHR) estimated that upwards of 100,000 victims are being held in compounds in Sihanoukville City, Cambodia, alone. There are likely thousands more victims across Southeast Asia, as well as in the United Arab Emirates.
As with many forms of human trafficking, traffickers posing as job recruiters post fraudulent employment opportunities on Facebook, Telegram, and job sites. Unlike other traffickers, however, scam operations target educated victims with exploitable skills—like English or Chinese proficiency or a technological background—and promise attractive salaries for customer service jobs, IT, computer programming, and related industries. Scam operators usually pay for workers’ travel, but upon arrival, confiscate the victims’ passports and demand the victim pay back their “debt.” This coercion is often accompanied by physical and sexual abuse, restrictions on movement, and starvation. Some female victims are also made to serve as models in video chats with prospective scam victims or forced into sex work if unable to meet their scamming quotas.
Q3: What role does corruption play in the forced cyber-scam business?
A3: Pervasive corruption, both petty and at high levels of government, allows cyber scams to flourish. Poorly paid law enforcement officers and immigration officials are vulnerable to bribes from successful criminals, and some prosecutors and judges have allegedly accepted bribes in return for dismissals of charges. However, the scale of these operations and the size of the compounds contradicts the suggestion that this problem could be solved by attacking low-level corruption alone.
There is ample evidence that high-level government officials in the countries where these centers are operating indirectly or directly benefit from their continued operation. Some benefit from the economic growth generated by criminal leaders’ investments in legitimate businesses and real estate development, as well as their partnerships with the government in infrastructure projects and other ventures. Others have a more direct stake in the centers’ success. For example, Al Jazeera has reported on a scam compound in Cambodia that is indirectly owned by a governing party senator, and both ProPublica and Radio Free Asia have found ties between the families of influential politicians and scam compounds.
Though the Cambodian government responded to the 2022 TIP report documenting some of its failures to combat trafficking by establishing a working group on trafficking and carrying out raids on alleged scam compounds, this year the State Department concluded that the government ultimately failed to investigate, prosecute, or convict any government employees complicit in human trafficking, despite evidence of their involvement. Officials with ties to scammers have been accused of notifying them ahead of police raids or intervening in the judicial system on their behalf. Any serious efforts to close the forced scamming complexes need to address the underlying corruption that allows them to thrive.
In Myanmar, the connections between the scammers and the country’s military junta are even less subtle. The absence of rule of law along the Thailand-Myanmar border in Karen State has resulted in a series of enclaves where PRC-affiliated criminal groups cooperate with the Border Guard Forces (BGF), ethnic militias working with Myanmar’s national army. Crime syndicates partner with the BGF to build massive scam centers like those in Shwe Kokko, and the profits not only help prop up the junta but also enrich criminals involved in drug, human, and arms trafficking.
Q4 : How is this problem being addressed?
A4: Many of the traditional strategies to combat trafficking in persons are being deployed to prevent and punish those who recruit victims into cyber-scam operations. Additional steps under the Biden administration’s strategy on countering corruption and in alignment with global efforts to combat cybercrime could also be useful in addressing the root causes of this growing crime.
Prevention of fraudulent recruitment: Multiple countries, including the United States, have issued warnings to their citizens about the dangers of being lured abroad by misleading online job advertisements, particularly flagging job offers in the tech sector with suspiciously high pay. Because Taiwanese nationals are targeted for their Chinese-language skills, Taiwan has taken additional measures, like placing workers at airports to warn emigrants about fraud and launching a social media campaign to spread awareness.
These efforts, unfortunately, have limited reach. Social media companies could spread the message even further. The TIP report and NGOs have recommended that social media companies validate employers before allowing them to advertise jobs on their platforms and that they invest more resources into identifying and removing fraudulent job advertisements, informed by the knowledge and personal experiences of trafficking survivors. When Covid-19 misinformation was on the rise, social media companies like Meta responded by removing false claims and labeling all pandemic-related posts with links to reputable sources. Tech companies could follow a similar approach on job recruitment posts that link to tips on how to evaluate the legitimacy of a job posting and government advisories about new trafficking trends. Though web pages with this content already exist, users have to seek them out. Featuring them more prominently would equip job seekers with the facts they need to make informed decisions.
Protection of victims: Identifying those coerced into committing illegal acts is essential to ensuring compliance with the UN Office on Drugs and Crime’s (UNODC) non-punishment principle, which stipulates that trafficking victims should not be punished for crimes committed as a direct result of being trafficked. However, this principle often is not put into practice, and victims of forced scamming can be particularly difficult to identify because they do not fit the stereotypical victim profile. Forced scammers tend to be educated, multilingual, and possess advanced technical skills, and though pandemic-induced joblessness increased victims’ vulnerability to fraudulent recruitment, few come from situations of extreme poverty. Victims are quite diverse in other respects and represent more than 20 countries, though most are Asian males between 18 and 30 years of age. To address this, victim destination, origin, and transit countries all need to ensure that law enforcement undergoes training to learn to appropriately recognize and respond to trafficking victims. Additionally, the Humanity Research Consultancy recommends that embassies in destination countries follow up with local authorities when they receive information that one of their nationals is being trafficked or held in prison on immigration fines. At present, NGOs report that some embassies, including China’s, have been insufficiently responsive to victim complaints and fail to engage with local law enforcement on their nationals’ behalf. The United States and NGOs can assist by raising these issues with relevant national governments and by providing training to law enforcement on trafficking and the non-punishment principle.
Shutting down scammers: Preventing cyber scams and breaking up the criminal enterprises that profit off them will reduce demand for trafficked workers. While technology companies such as Match Group and Meta have already taken steps to raise awareness and remove suspicious posts, efforts so far have been insufficient to eliminate the scale of these online scams. Americans’ reported losses to scams facilitated by social media platforms grew from $42 million in 2017 to $1.2 billion in 2022.
Cyber scammers also exploit lax financial technology regulations to create cryptocurrency and investment platforms without oversight, which they then use to launder money acquired by fraud. App stores, such as Apple’s App Store and the Google Play Store, can help prevent cyber scams by requiring harsher scrutiny of apps seeking approval to be displayed. Banks seeking to protect their customers could also introduce stricter policies with regard to depositing fiat money (non-crypto currency) in novel cryptocurrency platforms and flag attempted transactions to suspicious applications. Finally, because cryptocurrency platforms allow users to remain anonymous, they are extremely popular with those looking to launder money, including scammers, and any efforts to end online scams will need to address the challenge of better regulating cryptocurrency platforms.
Combating corruption: The U.S. government could consider the possibility of withholding non-humanitarian foreign aid until Cambodian authorities begin prosecuting government officials that are complicit in human trafficking. While President Biden has utilized this power to sanction seven Tier 3 countries for FY 2023, including Myanmar, he has not extended that policy to Cambodia because providing a waiver was determined to be “in the national interest of the United States.” The president should reconsider this determination, as Cambodia’s failure to prosecute government officials complicit in its scam centers not only facilitates scams that adversely affect American citizens but also undermines the Unites States’ commitment to eradicating human trafficking.
Governments should not only crack down on the parts of the networks located at home (as they have in Taiwan) but also coordinate with tech companies and financial institutions to better understand the flows of money, arms, and people. Ultimately, to shut down the scam centers, law enforcement agencies will need to combat domestic crime and corruption, collaborate across borders to identify transnational criminal networks, and preempt efforts to expand or relocate scamming operations by monitoring criminal leaders’ international relationships. Sustained, cross-sector collaboration will be necessary to develop policy solutions that are effective against the many facets of this complex new form of trafficking.
Lauren Burke is a program manager and research associate with the Human Rights Initiative at the Center for Strategic and International Studies in Washington, D.C. Liam Hamama is an intern with the Human Rights Initiative at CSIS. Marti Flacks is the Khosravi Chair for Principled Internationalism and the director of the Human Rights Initiative at CSIS.