U.S. Cracks Down on Scam Networks in Southeast Asia Draining Billions

Cybersecurity

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on a network of scam centers in Southeast Asia. These operations have been involved in significant cybercrime and human rights abuses, defrauding Americans of over $10 billion in 2024.

Entities and Locations

The sanctions target nine entities in Shwe Kokko, Burma, protected by the OFAC-designated Karen National Army (KNA), and ten entities in Cambodia. This marks one of the most extensive actions against cyber-enabled financial crime.

Operational Details

In Shwe Kokko, the scam operations have been supported by the KNA in collaboration with the Burmese military. The Yatai New City compound, developed by She Zhijiang and KNA leader Saw Chit Thu, is a central hub for illegal activities, including gambling, drug trafficking, and investment scams. Workers are recruited under false pretenses and subjected to debt bondage and other coercive practices.

In Cambodia, former casinos in Sihanoukville and Bavet have been transformed into scam centers, utilizing trafficked labor. Companies like T C Capital Co. Ltd. and K B Hotel Co. Ltd. are involved in these operations, laundering proceeds through gambling activities. Political connections are used to evade local law enforcement.

Sanctions Authorities and Impact

The Treasury’s actions are based on several executive orders aimed at dismantling the financial infrastructure of these operations:

• E.O. 13851 (Transnational Crime): Targets large criminal organizations.
• E.O. 13694 (Cyber-Enabled Threat): Addresses malicious cyber operations.
• E.O. 13818 (Human Rights Abuse): Focuses on serious human rights abuses, including forced labor.
• E.O. 14014 (Burma Stability): Concerns threats to peace and stability in Burma.

The sanctions block all U.S. property and interests of designated persons and entities and prohibit transactions with U.S. persons, effectively cutting off financial support for these criminal networks. Secondary sanctions apply to entities owned 50 percent or more by a sanctioned party.

Under Secretary for Terrorism and Financial Intelligence John K. Hurley emphasized the threat posed by Southeast Asia’s cyber scam industry to financial security and the extent of modern slavery involved. The Treasury is committed to combating organized financial crime.

Recent designations highlight ongoing U.S. efforts to disrupt financial ecosystems enabling cybercrime and human exploitation. Financial institutions and U.S. persons are advised to exercise due diligence to avoid dealings with designated entities, with severe penalties for violations.

For more information, please visit the U.S. Department of the Treasury.