Illicit industry traffics thousands of victims from China through Southeast Asia
“The videos provide a window into the dark world run by transnational criminal networks able to smuggle people from China, through Vietnam and into Cambodia and Myanmar”
SHAUN TURTON, Contributing WriterSEPTEMBER 1, 2021 06:00 JST
PHNOM PENH — The first punch lands on the left side of the young man’s face, the second on the right.
Several more follow. Knees strike his stomach. He cannot defend himself, his hands are cuffed. His attacker, face outside the frame, has his fist wrapped in cloth.
He drags his victim by the lapels into the middle of the frame, faces him to the camera and tells him to speak.
“Dad, I’m in Cambodia, I’m not inside of China,” says the young man, through tears, his voice breaking and blood streaming from his nose. “I beg you, please send money.”
The ransom video, which was sent to the victim’s parents, was one of several shown to Nikkei Asia by Li*, a person who helps rescue human trafficking victims in Cambodia.
This ransom video supplied to Nikkei shows a handcuffed man being beaten with a stick while other victims watch in horror.
Another video shows a shirtless man cuffed on the ground being beaten with a stick while two more captives, handcuffed to a nearby window grill, watch on in terror. In a third, a grounded man, a foot on his neck, writhes in pain as he is electrocuted with a Taser.
The videos provide a window into the dark world run by transnational criminal networks able to smuggle people from China, through Vietnam and into Cambodia and Myanmar.
The networks, which are known mainly for running online gambling operations, force their captives to perpetrate online scams. They grew out of an influx of online gambling groups and casino operators, mostly from China, who flocked to the coastal city of Sihanoukville in 2016. They found in Cambodia a haven of low taxes and lax regulations after a clampdown in the Philippines.
Catering mostly to the community in mainland China, where all gambling except state-run lotteries is illegal, Sihanoukville quickly attracted aspirational labels like “the Macao of Southeast Asia.”
At its peak in 2019, the city’s online gaming sector was generating several billions of dollars annually, according to one expert, and employing tens of thousands. Demand for space soared, kicking off an unprecedented building boom, which drew more workers from China.
But as the city rapidly grew, the criminality at the core of many gambling networks became plain to see, spilling out into the street with fights, shootings and murders.
The bubble burst later that year when Cambodian Prime Minister Hun Sen, pointing to the threat of organized crime, announced a ban on online gambling.
The ban was widely seen as a result of pressure from Beijing, Cambodia’s largest source of aid and investment, which has pursued a yearslong crackdown against online gambling operators.
Cambodia’s state apparatus and security services are entwined with Prime Minister Hun Sen’s Cambodian People’s Party. © Reuters
Still, the Southeast Asian nation, notorious for endemic corruption, has continued to be used as a base for the criminal networks linked to online gambling and fraud.
Mostly from China, but also other Southeast Asian nations, victims are kidnapped by these groups, held captive and forced, under threat of violence, to perpetrate web scams.
Getting a clear picture of the numbers is difficult. “This is something where there’s clearly no oversight,” said Jason Tower, the Myanmar country director for the United States Institute of Peace. Li estimated at least 30,000 people have been trafficked to Cambodia, while Chhay Kim Kheoun, a spokesman for the Cambodia National Police, denied the number of victims was in the thousands. He said he could not give a figure but acknowledged “some” cases have happened.
Tower, who has studied the activities of online gambling companies in China and Southeast Asia, estimated victims of these types of internet scams in mainland China could range between 100,000 and half a million.
He said there were “hundreds” of job advertisements on social media every day, attempting to lure Chinese workers to places in Cambodia and Myanmar associated with the criminal networks.
“This is a major problem,” he said. “I don’t think we have a sense of what the precise scope of it is at this point.”
Sleeping, eating or working
On his second day in Cambodia, Hua* realized he was a captive.
“The Macao of Southeast Asia” is becoming known for more than gambling. (Photo by Vann Soben)
The 29-year-old was somewhere in the coastal province of Preah Sihanouk, but he could not see the ocean. He guessed there were about 1,000 people in the walled compound, made up mostly of two-story buildings that looked to him like a neighborhood from his native China. There was little else around.
A supervisor gave him a cellphone, showed him to a computer and told him to download Chinese social networking apps. Each day, until the early morning, he was told to befriend women in China, gain their trust and entice them to invest in bitcoin.
Every few days, the bosses held performance meetings. Earners would be rewarded, allowed to start late. People whose work was deemed unsatisfactory would be beaten.
“We were either sleeping or eating or we were working,” he told Nikkei.
Captives are subjected to violence and torture, which is sometimes filmed and sent to relatives to spur them to send ransoms. Some have been killed and their deaths reported as suicide, according to workers who have escaped.
Some are sold between companies. Prices start at around $8,000 but vary depending on the financial means of a victim’s family.
The groups are referred to broadly as running online gambling operations but within that category exists a spectrum of activity. It ranges from websites offering live casino games for players in mainland China to blatant digital and telephone scams run by captives under duress.
Chinese suspects arrested for pulling scams are deported to China in 2019. (Photo by Vann Soben)
The networks are mostly headed by Chinese nationals, but there are also groups run by people from elsewhere in Southeast Asia. According to details of cases shared with Nikkei, they are able to buy the protection of some local authority figures in Cambodia.
The scale of this illicit industry is large but hard to pin down. Since 2020, Chinese police have arrested more than 130,000 people linked to 24,000 cases of cross-border gambling. However, the statistics, reported by Chinese state-run Legal Daily, do not refer specifically to trafficking crimes connected to the networks.
The Chinese and Vietnamese embassies in Cambodia this year have issued warnings about the threat posed by trafficking groups that lure victims with offers of high-paying jobs. In January, China urged its citizens to sign formal labor contracts before going to Cambodia to work.
“Otherwise, what awaits you is not a high salary, but the illegal imprisonment and kidnapping by online gambling dens,” the Chinese embassy wrote.
Sihanoukville: In June, China and Cambodia announced that a joint law enforcement office would crack down on perpetrators of kidnapping, extortion, online gambling and fraud. (Photo by Vann Soben)
In June, China and Cambodia announced that their joint law enforcement office would launch a crackdown after complaints about kidnapping, extortion, online gambling and fraud.
The head of the task force, Wu Jianmin, warned Chinese criminals behind such operations would be arrested and repatriated, even those who had become naturalized Cambodian citizens.
In the past 18 months, some 468 mainland Chinese and 37 from Taiwan were granted Cambodian citizenship, according to figures cited by local outlet the Cambodia China Times. During the same period, 83 people from other countries were naturalized.
“Cambodian nationality … will not make Cambodia a safe haven for them,” Wu said at a virtual news conference attended by Cambodia’s National Police Chief Neth Savoeun and China’s Deputy Minister of Public Security Wang Xiaohong.
Hefty penalties await those extradited back to China. In August a court in Shanghai sentenced two men to 15 and 14 years in prison for involvement in web scam syndicates in Sihanoukville and Indonesia, according to a report in The People’s Daily.
‘Basically, these people are slaves’
On a recent afternoon at a cafe in Phnom Penh, Mr. Li* scrolled through his phone, displaying details of some of the 170 victims he has helped to rescue.
Li is part of a volunteer network of Chinese businessmen living in Cambodia. While authorities do target the groups, the work of helping the victims to escape has fallen largely on this network, which raises funds from the Chinese expatriate community and arranges transport, safe hotels, food and, in many cases, medical treatment.
They also liaise with authorities in Cambodia and China to organize victims’ paperwork and travel documents.
Photos on Li’s phone show swollen faces and bruised bodies, serious injuries inflicted by fists, feet and weapons like knives, sticks and Tasers, he says.
“They are not human beings,” he says of the trafficking groups. “They are gangsters and drug dealers back in China, but they can’t live in China anymore.”
In addition to the people forced into slave-like conditions under online gambling groups in Cambodia, Li believes the number across Southeast Asia could run into the hundreds of thousands, with Myanmar and the Philippines also hot spots for this type of trafficking.
Typically at these organizations, some of the workers, such as security guards, managers, and programmers, are treated well and paid. The remainder are duped and coerced. In his experience, 10% of those trafficked are women who are used for sex work at the compounds or made to perform pornographic shows on webcams.
“Basically these people are slaves,” Li said. “I pity these young people. Most think they can get a job with a high salary.”
Such was the case for Hua, who worked for a food delivery company and at a karaoke bar in China.
He had left his home in Hubei Province believing he would work in customer service for between $4,000 and $5,000 a month.
He had spotted the job on the WeChat Chinese social media platform, and the person who answered his call was convincing, he said. Soon, he was on a bus headed to the Guangxi autonomous region. Then, together with about six others, he was smuggled across the mountains into northern Vietnam. From there, another bus took them to the Cambodian border where they again disembarked and “took a small path” to avoid border authorities.
“It sounded real,” Hua recalled of the job offer. “But when I arrived in Sihanoukville, I was disappointed, it was different to what I had imagined.”
After a month of working for no salary, Hua decided to pay for his freedom. The ransom, $15,000, was presented as a bill.
“They counted everything: transport inside and outside China, accommodation, meals, border crossings, things I used like cellphones, computers, chairs,” he said.
“My family gathered the money. … They remortgaged the house and borrowed it from relatives. Someone came to my hometown to collect it.”
Wang Xiaohong spoke at a recent press conference about China’s efforts to crackdown on Chinese criminals in Cambodia. © Reuters
Operating across borders, the traffickers and online gambling groups pay local authority figures for protection or, at the very least, to look the other way, Nikkei has been told. In one case, local police officers accompanied bosses and bodyguards from an online gambling group as they tried to recapture trafficked workers who had escaped.
Some cases have received public attention. A Cambodian court in April charged Soum Pov, a former two-star military general, and six accomplices after they were caught trying to smuggle 28 Chinese nationals across the Cambodia-Vietnam border using military-plated vehicles, according to a local news report.
Tep Phalla, a spokesman for the court, said Pov remained in custody while the case was under investigation. “[The case] is in the hands of the investigating judge; they are working on it,” he said.
The United States Trafficking in Persons Report places Cambodia on the tier 2 watchlist, meaning it does not meet minimum standards for the elimination of trafficking but is making significant efforts to do so.
It says “endemic corruption at many levels of government” severely limits efforts to fight trafficking, pointing to “consistent credible allegations of complicity” of officials in trafficking.
It goes on to say police sometimes tip off sex-trafficking establishments about raids, protecting venues in exchange for monthly payments or sexual favors from victims.
“Contacts alleged prosecutors and judges accepted bribes in return for dismissal of charges, acquittals, and reduced sentencing,” the report states. “Corrupt officials often thwarted progress in cases where the perpetrators were believed to have political, criminal or economic ties to government officials.”
Cambodia’s state apparatus and security services are entwined with the ruling Cambodian People’s Party. Top generals, police chiefs, judges and ministers belong to the party’s central committee. The head of the party, Hun Sen, is the world’s longest serving prime minister, having held the position for 36 years.
In another recent case to hit the headlines, local newspaper the Khmer Times spoke with several people tricked and held captive by a group running online scams based at a compound in Otres Beach, near Sihanoukville.
The case came to light after four Filipino victims were able to escape. Victims who spoke to the newspaper said they were recruited online, transported from Phnom Penh and had their passports taken upon arrival. They were told to create online profiles and lure unsuspecting men into investing in cryptocurrency and investment scams by pretending to be young women.
While a local police station was “meters from the complex,” officers were “afraid” to enter, the Khmer Times reported.
Cambodian authorities dealt with 139 cases of human trafficking and 59 cases of sexual exploitation in the first half of 2021, reported Xinhua, which noted the figures had risen year-on-year.
Chou Bun Eng, permanent vice chairperson of the National Committee for Counter Trafficking (NCCT) and a secretary of state at Cambodia’s Interior Ministry, referred questions about trafficking linked to online gambling groups to the National Police.
Kim Kheoun, the spokesman for Cambodia’s National Police, said police were “trying hard” to tackle this type of human trafficking but found it difficult to due “a lack of cooperation” from the victims, their families and others involved.
Asked about complicity among officials, including police officers, he said: “I don’t accept this, but if there’s such a case [of corruption] please point the officer out exactly.”
China strengthens clampdown
China’s mounting pressure on these groups in Cambodia forms part of a broader clampdown against online gambling networks. They are linked to more than $145 billion in illicit outflows from the mainland, according to comments last year by Liao Jinrong, the director-general of the International Cooperation Department of China’s Ministry of Public Security, cited in state-run media.
Beijing has targeted payment services used by the groups to move money offshore and announced a “blacklist” of countries known as gambling destinations, on which it would impose restrictions.
While the list has not been made public, Southeast Asia is in the crosshairs.
In a 2020 paper, Tower and Priscilla Clapp, both from USIP, traced the development of “gambling cities” backed by shady Chinese investors, some with triad links, who had moved among the Philippines, Cambodia and Myanmar to avoid law enforcement crackdowns.
The ban by Hun Sen led many groups behind Cambodia’s gambling boom to relocate to Myanmar, particularly border areas under the control of ethnic minority armed forces, Tower and Clapp wrote.
“The spread of these types of criminal actors is something that you’re seeing around the globe now, happening on a larger and larger scale,” Tower said. “These Chinese criminal networks, who were doing the same sorts of things in China a few years ago, are now being chased overseas, they’re finding space where you have corrupt actors and continue doing the same sorts of things.
“There is increasing evidence they are trafficking people into these zones, including Chinese nationals, who are effectively prevented from leaving. They’re really working to try and get as many people as possible because their activities are labor-intensive.”
Beijing’s pressure campaign has intensified. The South China Morning Post in July reported tens of thousands were caught up in a crackdown after Chinese authorities ordered “all nationals in northern Myanmar” to return to the mainland.
As in Cambodia, Northern Myanmar was being used as a base by traffickers who were luring Chinese citizens with fake job ads promising high salaries, the Chinese state tabloid Global Times warned in March.
Once there, victims were held captive and forced into online gambling rackets and telecom scams and other crimes like selling drugs. Some kidnapped women were forced into prostitution, the newspaper reported.
China’s security apparatus also continues to scrutinize its citizens’ activities in Cambodia.
Chinese social media posts indicate that Chinese citizens with frequent or long stays in Cambodia are being quizzed by police when returning to China, with officers grilling them on what they do, where they stay, and demanding they show paperwork proving their work or business activities in Cambodia are legitimate.
The families of Chinese expats in Cambodia are also receiving calls from law enforcement agencies in China asking questions about what their family members do in Cambodia.
“It has been happening to many Chinese expats,” said one Chinese expatriate based in Cambodia and engaged in humanitarian work.
“I got a call from my local police department a couple of weeks ago. They asked about my job and to send photos of my passport. From their questions, it seemed they assumed I was somehow associated with illegal activities here.”
Tower cited three main factors motivating the Chinese government’s crackdown: The networks victimize Chinese citizens, are linked to large illicit outflows and their operations harm the country’s reputation.
“It’s creating a lot of national security threats on several levels,” he said. “[Chinese President] Xi Jinping has really staked a lot of his legitimacy on the Party’s ability to deal with crime, to deal with corruption and with these sorts of problems. The criminal networks operating in Southeast Asia are a source of major embarrassment.”
Despite the growing attention, many online gambling networks have remained in Cambodia, said Li of the volunteer network of Chinese businessmen living in Cambodia.
“I don’t think it’s decreased, there are more nationalities involved now, not just Chinese,” he said, adding that, after the ban, the groups became “more aggressive.”
He says that the COVID-19 border restrictions has meant traffickers were changing their smuggling methods and increasingly using boats rather than overland routes.
In July, Cambodian authorities intercepted 36 Chinese nationals and two Cambodians who had entered the country illegally in a boat after traveling more than 2000 nautical miles from China’s Fujian Province.
The pandemic has also made it tough for rescued victims to return to China, with the price of plane tickets, and the cost of following COVID-19 protocols, making the trip too expensive.
It has also exacerbated the economic distress that leads many to fall for the traffickers’ job offers in the first place.
Economic desperation was what drove Mr. Zhang*, who had lost his job in a steel factory, to respond to an advertisement seeking security guards in Cambodia for $4,000 per month.
“I needed an income to support my family,” he said, “so I decided to give it a go.”
With around eight people in February, he was taken overland through Vietnam and into Cambodia, where he was held in a compound, given a cellphone and made to scam citizens in China on networking platforms such as Momo and Lvzhou.
He was eventually released in late June when his family paid a $5,000 ransom.
During his captivity, bosses forbid the trafficked workers from speaking to one another, but they would talk at night in their dorms. This, he said, is how he learned that at least one person would not make it out.
“During my stay there someone jumped off the building. I didn’t see it myself, but everyone knew it, that guy died,” he said. “I consider myself one of the lucky ones.”
* Names have been changed to protect sources