UNODC Asian and Asian Transnational Organized Scam Enterprises Inflection Point

New Report by the United Nations on How Southeast Asian and Asian Transnational Organized Scam Enterprises have Reached an Inflection Point

PART 1: UNODC REPORT

Cyberfraud in the Mekong reaches inflection point, UNODC reveals

According to the United Nations Office of Drugs and Crime:

Transnational organized crime groups in East and Southeast Asia are hedging beyond the region as crack-down pressure increases, a new report by the UN Office on Drugs and Crime (UNODC) shows. Amidst heightened awareness a­­­nd enforcement action, Asian crime syndicates are expanding operations deeper int­­o many of the most remote, vulnerable, underprepared parts of the region — and beyond.

“We are seeing a global expansion of East and Southeast Asian organized crime groups,” said Benedikt Hofmann, UNODC Acting Regional Representative for Southeast Asia and the Pacific. “This reflects both a natural expansion as the industry grows and seeks new ways and places to do business, but also a hedging strategy against future risks should disruption continue and intensify in the region.”

The infamous scam compounds dotted around special economic zones, or SEZs, and other border areas across the region, and especially in Cambodia, Lao PDR, Myanmar and the Philippines, are now being displaced as a response to mounting law enforcement pressure, leading to a spillover into other parts of the region. While crackdowns disrupt existing operations, these continuously reappear in other purpose-built business parks developed to house and service more online crime operations. The venues and businesses feature all of the conditions, infrastructure, and regulatory, legal, and fiscal covers required for sustained growth and expansion.

“It spreads like a cancer,” Hofmann said. “Authorities treat it in one area, but the roots never disappear; they simply migrate. This has resulted in a situation in which the region has essentially become an interconnected ecosystem, driven by sophisticated syndicates freely exploiting vulnerabilities, jeopardizing state sovereignty, and distorting and corrupting policy-making processes and other government systems and institutions.”

The dispersal of these sophisticated criminal networks within areas of weakest governance has attracted new players, benefited from and fueled corruption, and enabled the illicit industry to continue to scale and consolidate, culminating in hundreds of industrial-scale scam centres generating just under US $40 billion in annual profits, according to latest UNODC estimates.

Criminal groups’ continued success is fueled by their capacity to launder money through cryptocurrencies and underground banking, amassing massive amounts of criminal proceeds that infiltrate banking systems globally. As illicit actors from the region and beyond become leaders in cyber-enabled fraud, money laundering and underground banking in global markets, the repercussions are felt worldwide.

Global footprint

The trend to hedge beyond the region has been consistent with continued reports of crackdowns targeting Asian-led scam centres that have been found operating in Africa, South Asia, the Middle East, and select Pacific islands, as well as related money laundering, trafficking in persons, and recruitment services discovered as far as Europe, North America, and South America.

Many of these groups have managed to take on industrial proportions by reinvesting their profits and leveraging vast multi-lingual workforces comprised of hundreds of thousands of trafficked victims and complicit individuals — the results of which could be seen during the first few months of the year in Myanmar’s Myawaddy, where thousands of people were stranded after being released from scam centres operating in the country’s border areas.

Involvement of criminal groups from other parts of the world is also growing, the study shows, revealing not only an expansion and acceleration of cyberfraud operations, but also new synergies forming between criminal groups and an increasing number of adjacent service providers and innovators who have recently moved in.

Cyber-enabled fraud, underground banking and technological innovation

This expansion has been fueled by new illicit online markets and crime-as-a-service. Criminal groups have evolved into more advanced cyber threat actors supported by adjacent money laundering networks, data brokers, and a range of malware, deepfake and other AI-driven technology services that allow them to adapt to crackdowns.

“The convergence between the acceleration and professionalization of these operations on the one hand and their geographical expansion into new parts of the region and beyond on the other translates into a new intensity in the industry — one that governments need to be prepared to respond to,” Hofmann said.

What next?

The report includes recommendations for governments in Southeast Asia and beyond to shape response strategies. These go from intensifying financial disruption measures, enhancing coordination on financial intelligence, all the way to scaling financial investigations and asset recovery through regional and international collaboration.

This latest report is part of a growing body of threat analyses conducted by UNODC on transnational organized crime in Southeast Asia. Findings of these reports have been presented to policymakers, law enforcement agencies, international partners, academics, and other experts, with the objective of fostering dialogue and advancing efforts to address organized crime more effectively.

Building on the ASEAN Regional Cooperation Roadmap to Address Transnational Organized Crime and Trafficking in Persons Associated with Casinos and Scam Operations in Southeast Asia, the study also provides a list of recommendations geared towards strengthening knowledge and awareness, legislation and policy, and enforcement and regulatory responses in the region, intended to assist governments to address the situation.

PART 2: SCARS INSTITUTE ANALYSIS BY DR. TIM MCGUINNESS

Summary of Insights – Analysis

From “Inflection Point: Global Implications of Scam Centres, Underground Banking and Illicit Online Marketplaces in Southeast Asia” (UNODC, April 2025) – Full Report Below

The UNODC’s 2025 policy brief marks a critical warning to the global community: Southeast Asia has become the epicenter of a rapidly evolving, technologically sophisticated, and globally connected ecosystem of scam operations, cyber-enabled fraud, underground banking, and illicit online marketplaces. This transformation represents not just a regional threat, but a global crisis with expanding operational footprints and increasingly severe economic, social, and security consequences.

How the Scam Landscape Is Changing

Industrialization of Fraud:

Scam operations have moved from small-scale enterprises to industrialized, multi-billion-dollar fraud factories, often hosted in special economic zones (SEZs), casinos, and non-state-controlled border areas. These centers are run by transnational crime syndicates using trafficked labor, advanced infrastructure, and cutting-edge technology, including AI, deepfakes, and blockchain.

The fraud industry in Southeast Asia has undergone a radical transformation from loosely organized scam rings to highly structured, industrial-scale operations. These scam centers—located predominantly in Special Economic Zones (SEZs), non-state-controlled regions, and casino-resort complexes—are managed by transnational crime syndicates with expansive reach and deep financial backing. No longer dependent on isolated actors, these operations resemble full-fledged corporate entities, employing large workforces and functioning across multiple countries with strategic precision. The report highlights how fraud compounds are now integrated into dedicated business parks and even science and technology zones, providing cover for their illicit activities.

What distinguishes this phase of fraud is the convergence of infrastructure, money laundering systems, and human trafficking into a single operational model. Crime syndicates have built out logistics chains that include recruitment pipelines for trafficked labor, encrypted communication tools, and unregulated financial services to process and conceal proceeds. These developments have allowed operations to grow not only in scale but also in sophistication, with many compounds hosting thousands of individuals at once. Law enforcement raids in Myawaddy, Sihanoukville, and other hotspots revealed sprawling facilities complete with office floors, dormitories, and fake call centers where victims—under threat of violence—carry out scams for hours daily.

Technology plays a central role in this industrialization. Criminals use AI-generated scripts, real-time language translation tools, and customer relationship management (CRM) systems to target victims around the world with personalized scams. These centers run scams akin to telemarketing businesses but with criminal objectives, and they are now capable of producing billions in annual illicit revenue. The industry’s scalability, efficiency, and use of globalized digital infrastructure have made it increasingly difficult for local enforcement agencies to keep pace.

The resilience of these operations is bolstered by political protection, bribery, and exploitation of regulatory loopholes. As enforcement improves in one jurisdiction, syndicates swiftly relocate to another, adapting their operations to avoid detection. The industrialization of fraud has made the scam landscape a dynamic and evolving threat—one that blends transnational crime with corporate-like agility and resources.

Global Spillover:

What began in Southeast Asia now extends to Africa, South Asia, the Pacific Islands, and Latin America. Asian criminal syndicates have developed footholds through casino investments, real estate, tourism, and virtual asset platforms, embedding themselves in local economies while expanding their scams and laundering operations globally.

The criminal ecosystem that originated in Southeast Asia is no longer a contained regional issue—it has metastasized globally. According to the report, Asian crime syndicates have expanded their operations into Africa, South Asia, the Pacific Islands, and Latin America, adapting their models to exploit similar vulnerabilities in governance, regulation, and enforcement. In many of these jurisdictions, syndicates have gained influence by investing in casinos, tourism infrastructure, and real estate projects, often under the guise of legitimate foreign direct investment.

In Africa, operations led by Chinese nationals have been uncovered in countries such as Zambia, Angola, Namibia, and Nigeria, where large-scale fraud compounds mimicking Southeast Asian scam centers were discovered. These operations used local labor and trained accomplices, signaling a strategy of both expansion and integration. The report notes that the syndicates often target countries with underdeveloped legal frameworks, porous financial oversight, and high corruption tolerance—making them ideal for launching scam operations and laundering proceeds.

The Pacific Islands have similarly emerged as vulnerable targets. Here, syndicates have invested in hotel-casino resorts and used citizenship-by-investment schemes to create safe havens for their leaders. This has enabled them to embed within local economies, gaining political clout and legitimacy while facilitating illicit activity like online gambling, fraud, and trafficking. The influence is often visible—syndicate leaders attend public events and work alongside local officials, presenting themselves as business magnates.

South America has also seen increasing activity. Syndicates are building Spanish and Portuguese language capacity to extend their reach, creating fraud schemes tailored for South American victims. These developments underscore the fluidity of criminal operations and the deliberate strategy of hedging operations across regions to mitigate risk. The global spillover is no accident—it is a calculated move to scale fraud, expand laundering infrastructure, and diversify victim demographics while avoiding concentrated enforcement action.

Cybercrime Ecosystem:

A complex, self-sustaining criminal infrastructure has emerged. This includes AI-enhanced fraud kits, encrypted communication platforms, unauthorized cryptocurrency exchanges, and illicit marketplaces like Huione Guarantee. These platforms act as one-stop shops for fraud, laundering, and exploitation, with some processing over $24 billion in cryptocurrency alone since 2021.

The scam industry in Southeast Asia has evolved into a full-spectrum cybercrime ecosystem. This ecosystem is not just about executing scams but includes all supporting infrastructure—from sourcing data and laundering funds to providing malware and fake documents. Platforms like Huione Guarantee (recently rebranded Haowang Guarantee) illustrate how the ecosystem operates. Acting as illicit online marketplaces, these platforms offer fraud kits, AI-driven scam tools, deepfake generators, and cryptocurrency services. According to the report, these platforms processed over $24 billion in cryptocurrency transactions between 2021 and 2024.

What makes this system especially dangerous is its seamless integration. Criminal actors can source the tools needed to defraud victims, pay vendors, communicate securely, and move funds—all within the same ecosystem. These platforms also act as reputational hubs, where vendors earn trust through peer reviews and transaction volume. Most present themselves as neutral third parties or even registered businesses, giving them a false appearance of legitimacy. In reality, they are deeply connected to known crime syndicates and operate without regulatory oversight.

The cybercrime ecosystem has created economies of scale. Vendors on these platforms now specialize in niche services—some focus solely on laundering money through stablecoins, others on developing synthetic identities or phishing kits tailored to specific regions. There’s a growing professionalization in this space, and the tools developed here are now being used not just in Southeast Asia but exported globally.

This closed-loop infrastructure makes it exceedingly difficult for law enforcement to intervene effectively. Shutting down one platform often results in another quickly taking its place. The cybercrime ecosystem represents a sophisticated form of digital organized crime, capable of evolving faster than current regulatory frameworks can adapt.

Technological Arms Race:

Organized crime is leveraging technological advancements faster than states can regulate or respond. This includes the deployment of generative AI, machine learning, and proprietary stablecoins to automate scams, launder money, and circumvent regulatory oversight.

Organized crime groups are outpacing governments in their ability to adapt and apply new technology. The Inflection Point report makes clear that the technological arms race is no longer a metaphor—it is a daily operational reality. Syndicates are using generative AI to create persuasive scripts, fake websites, and realistic chatbots that mimic customer service agents or romantic partners. Deepfake technology allows them to impersonate law enforcement officers, financial advisors, or even family members to deceive victims.

Machine learning is being used to profile targets and refine scam strategies in real time. Tools now exist that can scrape data from social media, public records, and data breaches to create highly convincing personas tailored to specific victim profiles. These developments have turned fraud into a data-driven enterprise, where scammers A/B test messages and measure success rates like marketers.

The introduction of proprietary stablecoins and blockchain networks is particularly alarming. These tools are designed to bypass anti-money laundering (AML) protocols and evade national and international controls. By developing their own financial ecosystems, crime syndicates insulate themselves from the banking sector entirely. Cryptocurrency exchanges tied to these platforms often operate without licenses, hosting their own wallets and leveraging decentralized finance (DeFi) tools to obfuscate transactions.

These technologies not only enhance the scale and effectiveness of scams but also make detection, attribution, and disruption significantly more complex. The regulatory gap is growing wider, and until global cooperation and policy innovation catch up, organized crime will continue to hold the technological advantage.

Undermining Sovereignty and Governance:

The infiltration of criminal interests into regulatory bodies, law enforcement, and political structures—especially in SEZs and jurisdictions with high corruption—threatens the governance capacity of affected states.

The penetration of organized crime into political, regulatory, and enforcement institutions poses a direct threat to state sovereignty. In regions where scam operations thrive—such as parts of Myanmar, Cambodia, and Lao PDR—corruption is not just an enabler but a structural component of the ecosystem. The report provides evidence of crime syndicates forging ties with local officials, funding infrastructure, and gaining influence over border control, licensing regimes, and law enforcement practices.

These relationships create safe havens where scam centers operate with impunity. SEZs in particular offer ideal conditions: legal ambiguity, tax benefits, low oversight, and limited jurisdictional enforcement. Organized crime actors have exploited these areas to create sovereign-like zones of illicit economic activity, often under the cover of foreign investment. The case of Zhao Wei and the Golden Triangle SEZ exemplifies how individuals under international sanctions can continue operating by shifting identities and legal entities across borders.

Governments attempting to confront these networks often find themselves undermined by internal sabotage or limited capacity. In some countries, entire law enforcement or regulatory arms have been compromised. This allows scam operations to continue expanding while discouraging whistleblowers and investigative journalism. The erosion of public trust, weakening of rule of law, and distortion of policy-making processes are long-term consequences with destabilizing effects on national governance.

Ultimately, the spread of organized crime represents more than a criminal challenge—it is a governance crisis. The combination of financial power, technology, and strategic infiltration makes syndicates capable of operating as shadow states, undermining democratic institutions and compromising national integrity.

Victim Trafficking and Forced Criminality:

These syndicates routinely traffic thousands of individuals into scam compounds, forcing them to conduct fraud under duress. Victims are often from China, India, Southeast Asia, and increasingly from Africa and South America.

The human cost of scam centers is often hidden behind the headlines about financial fraud, but the Inflection Point report underscores the systemic and widespread nature of trafficking and forced criminality. Criminal syndicates routinely lure individuals with false job offers, often promising work in IT, sales, or customer service in Southeast Asia. Upon arrival, these recruits are stripped of their passports, confined under guard, and coerced into running scams under threat of violence.

Victims come from across the globe—China, India, Bangladesh, Vietnam, South Africa, Nigeria, Colombia, and even the United States. Many are economically vulnerable individuals who were misled into thinking they had found stable employment abroad. Instead, they are imprisoned in fraudulent compounds where they are trained to deceive, romance, and defraud global targets. Some are forced to work for months or years, and those who resist are subjected to beatings, torture, or worse.

The scale is staggering. According to UNODC and local law enforcement sources, tens of thousands of individuals have been trafficked into scam centers, with many more likely unaccounted for. Law enforcement operations have rescued thousands in recent years, but prosecutions of traffickers remain limited, and few victims receive meaningful assistance or reparations.

This practice reveals a grim convergence of cybercrime and human trafficking. Scam centers do not just exploit financial systems—they operate on human suffering. The normalization of forced criminality poses a humanitarian crisis that intersects with organized crime enforcement. Until governments address both aspects in tandem, the cycle of recruitment, coercion, and exploitation will persist as a foundational element of the global scam economy.

What Needs to Be Done

To confront this global threat, the UNODC outlines a multi-pronged strategy requiring urgent, coordinated action:

1. Political Will and Awareness

A coordinated international response begins with high-level political recognition of the threat. Scam centers are no longer merely economic crimes or localized criminal nuisances—they are strategic threats to national and regional stability. Governments must elevate these operations to the level of national security concerns, integrating them into broader security, intelligence, and anti-corruption strategies. The report emphasizes that without firm political commitment, enforcement will remain fragmented, and regulatory responses will be undermined by inertia or interference.

Public awareness is equally essential. Citizens, financial institutions, and businesses need to understand how deeply these criminal ecosystems infiltrate legitimate sectors. Campaigns that highlight the human trafficking aspect, the financial manipulation, and the global nature of these operations can shift public opinion and generate momentum for action. These efforts must be supplemented by international forums and intergovernmental dialogue that align priorities and share best practices for confronting this multifaceted threat.

Lastly, the report stresses that corruption must be treated as a structural enabler of scam networks. Syndicates thrive in environments where officials can be bribed, border enforcement is lax, and regulation is selectively applied. Governments must establish systems that protect whistleblowers, enforce accountability, and insulate key institutions from criminal infiltration. Without these protections, any reforms or enforcement actions risk being superficial or short-lived.

2. Regulatory Strengthening

Many of the weaknesses exploited by transnational scam operations stem from outdated or fragmented regulatory frameworks. The UNODC calls for a comprehensive overhaul of anti-money laundering (AML) legislation, casino licensing, special economic zone (SEZ) governance, and digital asset oversight. These laws must be updated to reflect the realities of modern cybercrime, which no longer fits within traditional banking or gambling definitions.

Financial regulators must impose stringent licensing, audit, and compliance requirements on digital financial services, including cryptocurrency exchanges, virtual wallets, and online gaming platforms. Many of these platforms operate in legal gray zones, serving as gateways for illicit fund movement and scams. Without proper oversight, they function as de facto laundromats for criminal syndicates.

The report highlights that jurisdictions must close legislative gaps that allow shell companies, unlicensed financial entities, and cross-border transfers to operate unmonitored. Legal harmonization with international standards—such as the Financial Action Task Force (FATF) recommendations—will help limit regulatory arbitrage, where criminals exploit discrepancies between national laws to shift operations across borders.

3. Operational and Technical Capacity

Effective enforcement depends on the ability of national agencies to detect, investigate, and disrupt cyber-enabled fraud. The report identifies a severe gap between the scale of the threat and the operational capacity of many law enforcement agencies, especially in developing nations. Governments must invest in equipping their agencies with cybercrime units trained in digital forensics, blockchain tracing, and cross-border investigative methods.

In particular, investigative strategies must reduce reliance on traumatized victims. Many scam center victims are trafficked individuals who are either unable or unwilling to testify due to fear, trauma, or legal complications. Agencies need to build cases using digital evidence—transaction trails, intercepted communications, and metadata—collected in legally admissible formats. This shift requires not just training, but legislative adaptation to allow for new types of evidence.

Inter-agency task forces offer an effective model for integrated action. These units can pool intelligence from border control, financial regulators, cybercrime teams, and diplomatic services to build a unified response. Shared databases, secure communication platforms, and cross-agency training can enhance agility and effectiveness in responding to an adversary that is highly networked and mobile.

4. Whole-of-Government and Cross-Border Cooperation

Scam operations exploit institutional silos. While one agency cracks down on financial irregularities, another might unknowingly issue visas or business licenses to criminal actors. A whole-of-government approach—where relevant ministries, regulators, and enforcement bodies work in concert—is essential. Central coordination bodies should be empowered to oversee joint operations, set national priorities, and ensure accountability across sectors.

Victim protection systems also need to be streamlined. As thousands of individuals continue to be trafficked into scam compounds, countries must develop consistent procedures for identification, protection, and reintegration. Victims of forced criminality must not be treated as perpetrators. Referral systems should be standardized across borders, especially for cases involving cross-border trafficking and international scams.

Regional cooperation is crucial. Platforms such as the ASEAN+China Roadmap provide a foundation for joint investigations, intelligence sharing, and synchronized enforcement actions. The complexity and fluidity of scam networks demand synchronized regional frameworks to prevent the displacement of criminal operations from one jurisdiction to another.

5. Targeted Disruption of Infrastructure

To truly disrupt scam operations, authorities must focus not only on individuals but also on the infrastructure they rely on. This includes encrypted messaging platforms, web hosting services, virtual private networks, cloud storage, and payment processing networks. The UNODC urges governments to take decisive legal and technical actions against illicit online marketplaces such as Huione Guarantee and its clones, which act as transaction hubs for global cybercrime.

Sanctions, domain seizures, and regulatory bans can degrade these platforms’ functionality. Coordinated takedowns—ideally involving law enforcement, financial regulators, and internet service providers—are needed to remove the digital scaffolding supporting these scams. Parallel diplomatic pressure can encourage third-party states to revoke licenses, seize assets, or block financial operations that service scam centers.

Authorities should also move aggressively to identify and seize proceeds of crime. This includes cryptocurrency wallets, fiat reserves, real estate, and shell corporations holding illicit assets. Freezing and repurposing these funds can help support victim recovery, bolster enforcement budgets, and reduce the financial power of syndicates.

6. Ongoing Monitoring and Strategic Research

As scam networks evolve, responses must be guided by up-to-date intelligence. The report stresses the need for real-time monitoring of dark web forums, Telegram groups, blockchain transactions, and cross-border payment channels. Governments and private sector partners must collaborate on data aggregation and threat modeling to anticipate shifts in tactics, geography, and organizational structure.

Strategic research is equally important. Investments in criminological, sociological, and technological research can yield new insights into recruitment patterns, trafficking routes, scam typologies, and laundering methods. Retrieval-augmented generation (RAG) systems and multilingual keyword monitoring can help identify emerging threats as they develop, not after they’ve caused damage.

Finally, intelligence sharing must become institutionalized. Secure platforms for sharing classified threat data between trusted partners—whether via Interpol, ASEAN mechanisms, or new regional alliances—are vital. If syndicates are globalized and agile, then countermeasures must be just as fast, connected, and coordinated.

Together, these six strategic pillars offer a blueprint for dismantling the scam infrastructure that now spans continents. The report makes clear: the window for containing the threat is narrowing. Without swift and sustained intervention, scam centers will continue to entrench themselves, drawing more victims into exploitation and expanding their economic and political influence worldwide.

Final Note

The report stresses that the international community is at a defining inflection point. If the ecosystem underpinning industrial-scale scam operations is not dismantled through coordinated international action, the consequences will grow increasingly severe and widespread. Organized crime groups are already professionalizing, globalizing, and reinvesting with the agility of multinational corporations. Any delay in response risks solidifying these networks into enduring, quasi-corporate structures capable of bypassing traditional law enforcement and regulatory frameworks. Addressing this threat demands not just regional but global solidarity, strategic investment, and unwavering political resolve.