As we reported earlier in the weekthere has been an increase in illegal activities, known as scam farms, after the COVID-19 pandemic, across Southeast Asia – including the Philippines – where they often partnered with legal gambling companies.
UNODC supports countries in the region in closer cooperation in the fight against the influence of criminal networks.
Benedikt Hofmann, the UNODC Deputy Regional Representative for Southeast Asia and the Pacific, visited a scam farm in the Philippines that was raided in March this year. He took UN NewsDaniel Dickinson on tour.
Benedict Hofmann: Here in the northern Philippines, just a few hours north of Manila, is an example of a scam farm of the type that exists in many parts of the Philippines and throughout Southeast Asia. We see buildings where people work, cafeterias where they eat, and dormitories.
UN News/Jessica Jiji
Benedikt Hofmann describes the luxury in which the bosses of the fraud centre live.
In the middle is a building that housed the gambling operation, which was formally registered with the government and inspected by a regulator. But what that regulator doesn’t see, at least not on paper, are the buildings between them.
One of them I saw earlier houses computers and workstations, previously staffed by Vietnamese workers who ran scams targeting the Vietnamese market. Another building is for Chinese-speaking workers, who ran scams targeting the Chinese market.
There are houses like the one I am standing in now, where the people who run this complex – the bosses, as they call them – do business and relax by the pool with their families.
UN News: Is there anything you saw today that surprised you?
Benedict Hofmann: The size and sophistication of the complex is surprising. This doesn’t look all that different from an established technology company. About 700 people were discovered at this complex when it was searched in March, which is not as many as other complexes we know of.
The other surprising aspect is the contrast between the lives of the people who were forced to live and work here, often against their will, and the enormous wealth of the people in charge of the complex.
UN News: How much freedom do workers have?
UN News/Laura Gil
A con artist’s workplace; the text in blue reads ‘increasingly prosperous’.
The people who work here are basically cut off from the outside world. All their daily needs are provided. There are restaurants, dormitories, hairdressers and even a karaoke bar. So people don’t really have to leave and can stay here for months.
But even if they wanted to leave, they couldn’t, as we’ve heard from people who have been rescued from these centres. Some have been tortured and subjected to unimaginable violence on a daily basis as punishment for wanting to leave or for not meeting their daily quota of money swindled from victims. There is enormous human suffering in this area.
There are different types of victims: people who are defrauded all over the world, but also people who are trafficked and held against their will and exposed to violence.
UN News: Who is behind these large-scale operations?
Southeast Asia is ground zero for the global fraud industry. Transnational organized crime groups based in this region are the masterminds behind these operations and profit the most from them.
UN News/Daniel Dickinson
Employees who do not perform are handcuffed and threatened with fake weapons.
They work together with different parties, with people who have authority over the area, for example in the border areas of the Mekong in Myanmar, or with local power structures.
UN News: What types of crimes are being committed here?
Many of the established scam companies in the Mekong region, which borders Thailand, Laos and Myanmar, started out as casinos involved in laundering money from drug trafficking and other criminal activities in the region.
But there has been a major development, especially during the COVID-19 pandemic, where casinos have changed their business model and ventured into the online market, especially in the area of scams and cyber fraud.
In effect, they are turning into criminal service providers by selling cybercrime, fraud and money laundering services, as well as data collection and disinformation.
UN News/Daniel Dickinson
Employees who break the rules are fined or, more often, beaten.
Technology, such as generative artificial intelligence (AI), is developing rapidly. This will change the way these places operate, creating new opportunities for scammers to make money.
UN News: How concerned should we be about what is happening now and what could happen in the future?
These scam companies are places of innovation because they are way ahead of other parts of the economy, which doesn’t bode well for the future.
AI increases the scope and scale at which a scam farm can operate. You don’t need a thousand people to run scams on a text-based mobile phone; you just need a well-programmed application to do it for you.
Therein lies the real threat for the future. It is a major concern for us at UNODC, because it has potentially serious consequences for people around the world.
UN News: How are countries responding?
There is a growing gap between the speed at which these technologies are developing and being adopted by organized crime networks and the responses that governments in the region have at their disposal to address these problems. It is a regional problem with global implications. These scam operations are still primarily based in this region, but we are also seeing some smaller operations in places like South America and Africa.
This is an extremely complex problem. It is not possible for one country to tackle it alone, not least because even if you tackle these operations in one place, they simply move to another country where there is less enforcement pressure on them.
So what is needed is a regional response, and UNODC can support that effort. We can bring countries together and help them agree on priorities and strategies to combat organized crime.
UN News: How much political will is there to do that?
At the moment, we see a strong push in the region to work together to address this issue. The Philippines, but also countries in the Mekong region and China, are working together, conducting joint operations, discussing priorities and sharing information on a scale that was not the case in the past. That is very positive.
At the same time, we continue to see a law enforcement-focused response to these issues rather than a more strategic, whole-of-government response. The more countries work together, share expertise and information, and the more countries in the region also receive support from countries elsewhere in the world and organizations such as UNODC, the better prepared they can be to address this problem.
It will be incredibly difficult to get ahead of this problem. We have no illusions that it will take very long, time that we do not have with this technological change.
