The Dark Reality of Telecom Fraud in Northern Myanmar
After nightfall, the tranquil sky of Mong Pawk, a city in Myanmar’s Shan State located only 10 kilometers from the Chinese border, lights up sporadically with bursts of fireworks.
Despite their picturesque appearance, these fireworks symbolize the celebration of ill-gotten money — the longer the display, the bigger the spoils.
Cheng Xiang is among the few who know this. Coming from China to work in hospitality in the area, Cheng did not feel anything suspicious about these fireworks the first time he saw them, but became intrigued as successive rounds of fireworks illuminated the sky. Later, he came to know the custom behind this: In the telecom fraud den, any successful swindle surpassing 500,000 yuan ($68,649) would merit a celebratory sequence of fireworks.
“You count the blasts,” he said. “Five blasts in a row means 500,000 yuan.”
Elsewhere in Shan State, cracks of gunfire occasionally rupture the silence, flouting the curfew in Laukkaing Township that lies next to China’s Yunnan province. Crime syndicate leaders often fight each other to grab “talent” for their cyberscam operations.
Northern Myanmar, which commonly refers to Shan State and Kachin State on the border with China, is known as a hotbed of telecom fraud.
Since 2015, law enforcement agencies from China and Southeast Asia have been cracking down on telecom fraud and online gambling in this area, resulting in the extradition of some core syndicate members back to China for trial. Hundreds of thousands of telecom fraudsters from countries including Cambodia have since then dispersed, converging on northern Myanmar and extending their reach along the Thailand-Myanmar border, encompassing areas such as Myawaddy, Tachilek, Wa State, Kokang, and Muse. In these apparent zones of lawlessness, fraudulent operations and online scam centers have burgeoned unchecked.
The Paper, Sixth Tone’s sister publication, embarked on an investigation in the Golden Triangle along the Thailand-Myanmar border to uncover the telecom fraud industry through interviews with long-term residents in the region.
Over the years, hundreds of thousands of telecom fraudsters from China have crossed the border illegally to settle in Chinese communities in northern Myanmar, where Mandarin is spoken and the yuan is used. Today, it is no longer possible to enter northern Myanmar with a standard passport, unless one can afford 70,000 yuan to obtain a border pass — a sharp increase from its previous price of 200 yuan, which came about due to the high demand for this hard-to-obtain permit.
Many arrive in this territory fueled by dreams of getting rich. While most of them are well aware of the kind of work they will engage in before coming here, little do they anticipate that their reception often entails beatings, lashings, electric shocks, sexual assaults, water jails, confinement in dark rooms, and coerced prostitution.
Predominantly, the masterminds behind these telecom fraud schemes are Chinese nationals from southeastern China who arrive with a lot of cash. To set up their operations, they acquire land and build facilities, or lease preexisting buildings and invest in equipment and labor. Local armed insurgent groups extend protection in exchange for a share of the profits, often in non-monetary forms.
Currently, faced with escalating enforcement endeavors from Chinese regulators, telecom fraud rings in northern Myanmar are moving their base to places like Cambodia, while some are diverting their fraud activities to find victims in Japan, South Korea, the U.S., and Europe.
The Golden Triangle
Northern Myanmar is home to a web of intricate and intertwined armed military factions that wield control.
Two such groups are the Democratic Karen Buddhist Army and the Karen National Liberation Army, who have established a strong foothold in the border town of Myawaddy in eastern Myanmar, where the notorious KK Park, a Chinese-run crime hub specialized in telecom fraud, is located. Each faction rules its own turf. The latter is in constant conflict with Myanmar’s military, while the DKBA integrated with it and has become the local Border Guard Forces.
KK Park lies under the protective wing of the BGF, a source told The Paper. The compound’s vicinity has been the arena of fierce gunfights. KK Park is just one of the nearly 20 telecom fraud operations in Myawaddy.
Myawaddy lies in the heart of the Golden Triangle, which stretches from the north of Myawaddy to the border between Mae Sai in Thailand and Tachilek in Myanmar’s Shan State. The region, known as the land of opium and the drug trade, was once dominated by Burmese drug lords Khun Sa and Naw Kham. While Tachilek now falls within the purview of the Myanmar Army, clashes among militia groups have cast a pall over the border town, rendering it as one of the most dangerous areas within the Golden Triangle.
On the night of March 16, a female employee of a local supermarket in Tachilek was abducted by gunmen. In a widely circulated video, she pleaded in Chinese, “I have two children, I can't go with you.” The footage went viral on Chinese social media, prompting the Chinese Embassy in Myanmar to issue an official response. In April, the embassy said it rescued a Chinese citizen who had been ensnared in telecom fraud in Tachilek and severely beaten and imprisoned.
On May 7, the local government in Tachilek imposed travel restrictions on foreigners from visiting the border town.
A half-hour drive from the Mae Sai border to Thailand leads to Chiang Saen Harbor, where a local drug gang attacked two Chinese cargo ships and killed 13 sailors — known as the Mekong River massacre — in October 2011. The body of a Chinese victim was found under a tree on the riverbank, revealing the gruesome murder scene. Naw Kham, the key culprit in the deadliest assault on Chinese nationals overseas, was arrested in Laos and extradited to China in 2012. Since then, joint patrols by police boats from China, Myanmar, Laos, and Thailand have conducted monthly sweeps from Guanlei Harbor in Xishuangbanna, Yunnan province.
Further north is the Wa Special Region 2 in Shan State, a self-governing region which is considered relatively safe in northern Myanmar. “In Wa State, if you call the police, at least they will show up. In Kokang, such calls are met with silence,” a local resident told The Paper.
The Paper learned that even though social stability prevails in Wa State and its government does not overtly endorse the telecom fraud industry, it tacitly tolerates its existence. A modest town like Mong Pawk only has 3,000 to 4,000 residents and a single commercial street, but the tally of telecom fraud workers there is said to reach 100,000 people.
From Cambodia to northern Myanmar
In 2012, the Chinese police issued an arrest warrant for the fugitive She Zhijiang, whose casinos in Myanmar, Cambodia, and the Philippines had been linked with human trafficking and online scams.
Born in 1982 to a farming family in Shaodong, Hunan province, She moved to Southeast Asia for job opportunities and co-launched the Shwe Kokko Special Economic Zone, the predecessor of the notorious KK Park, with Karen armed forces in Myawaddy in 2017.
At that time, telecom scams originating from Taiwan were being replicated in Phnom Penh, Sihanoukville Autonomous Port, and Poipet in Cambodia, as well as in the Philippines. “Telecom fraud and online gambling were the drivers of Sihanoukville Port’s GDP,” an insider of the telecom fraud industry told The Paper.
She built his empire on the online gambling operations he launched. By targeting Chinese citizens, he eventually caught the attention of Chinese authorities and was arrested in Bangkok in August 2022.
The downfall of She demonstrated Chinese authorities’ ongoing crackdown on cyberscams. The Ministry of Public Security said 254 alleged telecom fraudsters have been extradited from Cambodia since it deployed a special program to combat cybercrime in November 2015, and the number keeps getting higher as the crackdown continues. Between May 2019 and September 2021, 19,000 suspects returning from Cambodia and other Southeast Asian countries were arrested.
In 2019, as Chinese and Cambodian law enforcement agencies were working more closely, telecom fraud and online gambling syndicates operating in Cambodia eventually disbanded.
“Sihanoukville Autonomous Port seemingly emptied overnight. In their haste to flee, some people abandoned their computer setups and other equipment used for their illicit activities,” an insider told The Paper. “This exodus affected Sihanoukville’s real estate sector. There are now only a handful of active telecom fraud rings in Cambodia.”
Since then, telecom fraud syndicates have set their sights on lawless areas like Myawaddy within the Golden Triangle and extended their roots deep into northern Myanmar.
Mong Pawk is a small town with only one street in the autonomous Wa region of Shan State in Myanmar’s east. The booming telecom fraud industry has transformed the town.
It almost feels like China there. Like its northern neighboring region of Kokang, the signs on restaurants, eateries, and hotels on Mong Pawk’s main street are in Chinese. Here, people speak Mandarin and transactions are done in yuan.
In 2019, when Zeng Cheng first arrived here from China’s Fujian province, Mong Pawk only had a population of 3,000 to 4,000 people. What reminded Zeng that he was not in China was the vibrant red-light district and the casino that masqueraded as the town’s sole entertainment enclave.
These establishments were opened by the Chinese. Zeng recalls that at the time it only cost 200 to 300 yuan to cross the border into Mong Pawk. Accounting for travel expenditures, the whole trip cost him only a few thousand yuan. Once ensconced in Mong Pawk, Zeng rented a room for 2,000 to 3,000 yuan a month, but he found the town’s small population made it hard to do business.
But later on, the arrival of the telecom fraud syndicates disrupted the town’s tranquility.
“After Cambodia started to crack down on telecom fraud, the population in Mong Pawk grew,” Zeng said, adding that new buildings sprouted up and the population surged to 100,000, all of them young people. “After that, rent for apartments in town shifted to per square meter pricing — 200 yuan for each square meter.”
Zeng ventured into the restaurant sector. Starting at a yearly rent of 30,000 yuan in the first year, the fee ballooned to 720,000 yuan a year. In the past, business was so slow that cobwebs would adorn the doorway. But with the sudden population boom, his restaurant’s breakfast sales alone reaped 20,000 to 30,000 yuan a day. In Mong Pawk, three new casinos were built one after another.
At that time, Zeng had no idea what an “industrial park” was. He only knew that tens of thousands of young people who worked as telecom fraudsters were entering and leaving the building every day. The elusive boss remained concealed. The apparent leaders within the workforce were called team leaders. Some team leaders and workers would whiz through the streets in their luxury cars, which could be bought secondhand 95% cheaper in Mong Pawk compared to China.
With the rise of the local telecom fraud industry, the cost of crossing the border into Myanmar also soared dramatically.
“You can’t enter northern Myanmar with a standard visa anymore. You can only use a border pass or resort to illegal crossings,” said Zeng, adding that a border pass originally cost 200 yuan with the help of a travel agency or trading company in China. Due to heightened border vigilance, a border pass’s price has soared to 60,000 or 70,000 yuan, prompting a surge in illegal crossings.
“If you don’t have a border pass, motorcycle taxi drivers can take you across the border for as little as 50 yuan,” he said.
On July 25, the Wa State Judicial Affairs Committee issued an internal document requiring counties and self-governing zones to uphold strict vigilance against illegal immigration, while rigorously registering foreign vehicles and individuals. It also required police stations and traffic police brigades in all districts to process border crossing documentation.
The surge in Mong Pawk’s housing, border crossing, and business costs is mirrored in the escalating “protection fees” levied by the local government. In the beginning, Zeng paid a security fee of 100 yuan to the police station and a sanitation fee of 700 yuan to the Health Bureau per month, with officials collecting the fees in person.
With the advent of telecom fraud syndicates in town, local armed groups intervened and set up a management committee. “The committee seemed to have more power than the police,” Zeng said.
With this transfer of responsibility, the fees skyrocketed. When collecting the fees, they would tell business owners it was for their business license. Small restaurants and street stalls had to pay 5,000 yuan per month, while the fees for larger establishments like the telecom fraud centers were calculated per square foot, according to Zeng.
Nowhere to run
In towns like Mong La or along the Thailand-Myanmar border, where firearms are readily accessible, one can buy a gun for 10,000 yuan.
Within the telecom fraud den, security guards maintain watch on each level, and the heavily guarded entrance serves as an additional deterrent against workers wishing to escape. An insider said “strong laborers” under the age of 30 can fetch 200,000 to 300,000 yuan in Kokang.
“They are like walking money,” he said. “Once you’re sold to a telecom fraud operation, you basically have nowhere to run.”
Lin Bowen, from Fujian province, has lived outside China for over four years. His cousin was a telecom fraud worker in Kokang and told him that when he first arrived at the telecom fraud center, he witnessed the gruesome scene of guards recapturing escaped workers, crippling them by severing their hamstrings, and leaving them to roast in the sun.
“In the daytime, they leave you out in the scorching sun; by night, they confine you to the water jail according to my cousin,” Lin explained, referring to an iron cage submerged in water with a person locked inside. It was the water jail that shattered his cousin’s hopes of escape. Later, even witnessing a fellow captive endure the amputation of a finger ceased to shock him.
The plight faced by women traveling to northern Myanmar could be more tragic. Many heard stories of women deemed attractive facing sexual assault, while those not cut out for fraud being coerced into prostitution.
Meanwhile, workers are said to be constantly sold back and forth by fraud bosses. Another insider told The Paper that underperforming workers might be sold to another telecom fraud operation, and if their performance remains substandard, they are subjected to brutal beatings. The assailants beat them with wooden sticks, tasers, belts, ashtrays, or stools, capturing the violence on film to extort their friends and family.
On the other hand, high-performing employees are rewarded. In the telecom fraud dens in Wa State, upon closing a 500,000 yuan “deal,” the scammer may hand 300,000 yuan to the boss and keep the rest. Besides financial incentives, top performers are also granted outings for fun.
The Kokang Self-Administered Zone, the first special region in Shan State, has been under a military curfew from 8 p.m. to 5 p.m. since 2015. Home to many notorious telecom fraud centers, this was once the most tumultuous area in northern Myanmar.
Covering a total area of 2,060 square kilometers, the zone’s capital, Laukkai, adjoins China’s Yunnan province. A wall separates Laukkai from Nansan, a town in Yunnan’s Zhenkang County.
Despite the adjacency, stark contrasts emerge — orderly streets grace one side, while casinos of various sizes dot the landscape on the other. In the casinos, dealers at gaming tables are as neatly dressed as hostesses in Chinese hotels. Girls populating the red-light district’s streets, armed men occupying pickup trucks, and children begging on the streets are a part of daily life in Laukkai.
Kokang is shaped by four powerful families that control the local economy and are said to have allowed telecom fraud centers to breed in the area.
Bai Xuoqian is head of the Kokang Self-Administered Zone, while his second son Bai Yingcang commands the Kokang Militia Force, acts as the deputy director of the Finance Bureau, and manages a casino group. Bai Yingcang’s extravagant birthday celebration garnered online attention after Chinese celebrities publicly congratulated him.
The Wei family, headed by Wei Chaoren, controls a border defense battalion and is considered the only one of the four powerful families capable of wielding military power. The family’s corporate group runs hospitality, entertainment, and gambling operations, and its interests extend into Cambodia and Thailand.
There is also Liu Abao, dubbed the richest man in Kokang, who owns casinos and real estate and allegedly has close ties to the Myanmar army. The family of Liu Guoxi, vice-chairman of the Kokang Self-Administered Zone, nominally specializes in mining.
All four families have telecom fraud centers operating on their properties, an insider told The Paper.
“Telecom fraud is everywhere. All the young people with money are engaged in it,” he said. “Whether they’re funding their projects through injected capital or supporting them through their fraud activities, these new telecom fraud syndicate leaders are comparable to the four big families.”
On May 27, a fierce gunfight broke out next to the Xingfuqiao telecom fraud den. A video shows a Lexus being attacked by armed guards as people from both sides trade gunfire. A source claimed that this was a clash between two telecom fraud groups competing for skilled technical workers.
Two days later, the Kokang Police Force issued a statement saying that the incident was a personal conflict caused by a misunderstanding and not, as some media outlets described, “a fierce battle between the police and a militia.” Local authorities and police claimed they were unaware of the entire incident.
Besides conflicts caused by fighting over talent, gunfights can also occur during rescue attempts, insiders told The Paper.
Wei Cheng, a Burmese citizen who is familiar with the telecom fraud industry, said he was hired to rescue a Chinese man trapped in Kokang. He asked a local friend with a gun to help break the man out, but they ended up in a gunfight with the man’s captors.
“My friend has some connections and influence in Kokang. He took accomplices with him to rescue someone, but they got into a gunfight and the rescue attempt failed,” Wei said. “There are many cases like this.”
There are Chinese citizens engaging in legitimate businesses in Kokang. “But they all have connections. Their family or friends hold some power in the local community, and the hotels, restaurants, maintenance shops, and other businesses they run were all established through prior connections,” Wei added. “Basically, no one can succeed there without connections.”
Among the active Chinese organizations in the area, the most influential is the Fujian Chamber of Commerce, which Lin said has local connections and a tight-knit membership. It plays an important role in the local area and occasionally helps with rescues or “jailbreaks.”
Never returning home
After more than four years abroad, Lin isn’t unwilling to return to China. He’s worried about going home.
He isn’t involved in telecom scams, but he said police from his hometown call him from time to time to check on his location and status, suspecting his involvement in telecom fraud.
“If I go back, the police will definitely come looking for me. I’m mainly afraid that my passport will be confiscated and it will be hard to get out again.”
During this summer, Bai Ge, an 18-year-old girl from Henan province, arrived in Kokang with a friend after crossing the border from Xishuangbanna. Soon after, she contacted Lin for help.
Bai sent a message to Lin claiming that she had been kidnapped by telecom fraudsters. Her friend had been caught calling the police and was later sexually assaulted. Because Bai understood English, she had been forced to work as an interpreter for the telecom fraud syndicate. Unfortunately, there was nothing Lin could do about her situation.
Throughout this year, The Paper has received numerous requests for help from readers who claimed they’re unable to rescue family members tricked into going to northern Myanmar and subsequently trapped there. These individuals, with the majority being teenagers, arrived in northern Myanmar in various ways.
In late April, five people from Xuanwei in Yunnan province — four of them eighth-grade students — were trafficked to northern Myanmar. Family members told The Paper that they were smuggled out of Mengla in Yunnan’s Xishuangbanna Autonomous Region and taken to Kokang, where they were forced into telecom fraud.
Chat records show that the traffickers demanded the families pay 110,000 yuan for smuggling fees, property maintenance, equipment, and other expenses, stating, “Pay up and we’ll release them; if not, you’ll never get them back no matter who comes to get them.” After a month of concerted efforts, the four students were eventually safely brought back to China.
Countless similar cases emerged. An increasing number of media reports reveal that once a person steps foot in northern Myanmar, escaping safely becomes extremely difficult. Those who manage to escape often require their families to pay a hefty ransom.
One of the less fortunate is Wei Yinyi, a 20-year-old from Guangxi. His family told The Paper that Wei initially worked at a company that manufactured Bluetooth headphones in Guangdong province, but was trafficked to Kokang after responding to a post for a high-paying job he saw online.
In the early hours of May 29, Wei tried to escape from a telecom fraud den in Laukkai but was recaptured and beaten by guards, according to his family. Desperate, he secretly contacted his family to beg for help. But when the family approached Wei’s captors to negotiate his release, they demanded a payment of 200,000 yuan. As of the time of publication, Wei still hadn’t managed to return to China, his family said.
Results of the anti-fraud campaign
Once the recruited telecom fraud workers enter their new “jobs,” their first task is to undergo training. Following this, they receive 40 to 50 mobile phones each to begin their work. All of the phones have been purchased abroad.
According to Wei, the training is highly detailed, targeting people from different regions, industries, languages, and roles.
Take sex scams, for example. Under the pretense of pursuing a romantic or sexual relationship, scammers convince the target to download foreign social media software. With this software, scammers gain access to the target’s personal information. The scammer then coerces the target into conducting a nude video call, records it, and threatens to send the video to the target’s colleagues, relatives, and friends if a payment is not made. This process continues, with the scammer extorting more money until the victim is squeezed dry.
Another common scam involves impersonating a banker or a law enforcement officer and calling the target, claiming that they are implicated in a crime or their bank accounts are at risk. Scammers then ask the target to transfer money to a designated account. These calls are made using virtual numbers. The scammers use code changers to convert their international numbers into local ones to deceive the victims.
Some telecom fraud syndicates have even adopted AI technology. After obtaining the victims’ personal information, they use deepfake technology to impersonate the victims and video call their family, friends, and colleagues to trick them into sending money.
Today, China’s National Anti-Fraud Center has extensive data showing the shortcomings of traditional fraud techniques.
The promotion of anti-fraud apps has also been effective in combating telecom fraud. In 2021 alone, the National Anti-Fraud Center implemented emergency payment suspensions on defrauded money worth more than 320 billion yuan and intercepted 1.55 billion fraudulent phone calls. Their efforts prevented more than 28 million people from falling victim to scams, according to the Ministry of Public Security.
“It’s becoming harder to deceive Chinese people,” Wei said. “Scammers have instead started to turn their attention to Japanese, Koreans, Europeans, and Americans.”
Reported by Mao Ming.
(Due to privacy concerns, all interviewees have been given pseudonyms.)
A version of this article originally appeared in The Paper. It has been translated and edited for brevity and clarity, and is republished here with permission.
Translator: Carrie Davies; editors: Elise Mak and Xue Ni.
(Header image: A Buddha statue in Chiang Saen, Thailand, August 2023. The Paper)