The online scam syndicates operating near the Chinese border in northern Shan State were taking in $14 billion a year and were run by four families protected by the Myanmar military, says the commander of an ethnic army fighting to take control of the region.
The revelation was made by Peng Deren, the leader of the Myanmar National Democratic Alliance Army (MNDAA), in a New Year’s message to supporters, and reported by The Irrawaddy, an independent news service in Myanmar.
Rebel groups collectively known as the Three Brotherhood Alliance this week gained control of Laukkai, the main town in Kokang region and the hub of the scam operations, following weeks of fierce fighting with junta troops, the alliance and the junta said. Hundreds of junta officers and troops are reported to have surrendered.
More than 500 Thais who had been working at the scam centres in Laukkai, also known as Laukkaing, have been rescued and repatriated in recent weeks during lulls in the fighting. Thai authorities say they have determined that 174 of them were victims of human trafficking.
Four “big families” ran hundreds of online scams that together had as many as 100,000 people working for them in Laukkai before it was attacked by the Brotherhood Alliance, The Irrawaddy quoted Peng as saying.
Most of the employees of the centres were Chinese or spoke the language as the scams were aimed mainly at Chinese people, who have been bilked out of billions of dollars.
Under pressure from Beijing to crack down on the operations, Myanmar authorities in recent months have stepped up arrests and deportations. Some 41,000 suspects were handed over to China last year, Chinese media said this week.
Crime kingpins rescued
But the Myanmar military used helicopters to rescue the leaders of the crime syndicates from the town when it was attacked, Peng said.
The MNDAA is one of three ethnic armies that comprise the Brotherhood Alliance. They launched Operation 1027 on Oct 27 last year to drive junta troops out of northern Shan State.
The four families who run the syndicates are protected by the junta, Peng said, referring to the Bai, Wei and two Liu clans.
Their patriarchs are Bai Suocheng, former chairman of the Kokang Special Autonomous Zone; Kokang Border Guard Force leader Wei San; Liu Guoxi, a former lawmaker from the military-backed Union Solidarity and Development Party; and Liu Zhengxiang, the richest man in Laukkai.
Myanmar’s military and the four families have been engaged in industrial-scale drug production and cyber crimes in Kokang since 2009, turning it into a hub for cyber crime, Peng said.
The Brotherhood Alliance included eliminating online scam syndicates as a goal of Operation 1027, along with defeating the military regime.
In response to Peng’s allegation, pro-junta newspapers denied that online scam syndicate leaders had been rescued from Laukkai by Myanmar military helicopters, saying the allegation was misinformation.
However, prior to Peng’s allegation, reports said that leading Kokang businessmen were rescued from Kokang and transported to Nay Pyi Taw, the capital, during Operation 1027.
Thailand worried
Amid the massive crackdown in Laukkai, Lt Gen Jakkapong Janpengpen, joint operations director of the Royal Thai Army, met with Myanmar junta leader Min Aung Hlaing in Nay Pyi Taw on Dec 27.
The meeting took place amid concerns that online scam syndicates from northern Shan State would relocate to the Myanmar-Thai border opposite Tak province.
The Liu and Bai clans reportedly have casinos and facilities housing scam syndicates near Myawaddy in Karen State, where the junta-aligned Karen Border Force is active, as well as in Cambodia, The Irrawaddy reported.
Two Chinese-invested “new city projects” — KK Park and Shwe Kokko — located to the south and north of Myawaddy, are notorious hubs for online gambling, cyber scams and human trafficking.
Peng said the junta is still protecting KK Park, describing it as the largest cyber fraud centre in Southeast Asia.