US Authorities Raid Alleged Cyberscam Compounds in Cambodia
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A new type of online fraud emanating from scam sweatshops in Southeast Asia is facing its first major crackdown. Cambodian authorities have stepped up raids on compounds alleged to house workers engaging in online fraud, seizing computers, phones and electric shock batons and freeing thousands of involuntary workers. And Apple has removed from its app store two popular trading apps that cybercriminal groups in Cambodia, Laos and Myanmar have used to defraud people.
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The moves are likely to disrupt — perhaps only temporarily —Named for its analogy to a farmer fattening up a hog before slaughtering it, the fraud relies on convincing people to deposit more and more money into fake online platforms controlled by swindlers. Once the targets become unable or unwilling to deposit more funds, they’re informed that they’ve lost access to their cash and can retrieve it only by depositing more money or paying a hefty fee, a process that compounds their losses.
, pig butchering scams have been fueled by human trafficking. Workers from around Asia are tricked into going to Cambodia, Laos or Myanmar for seemingly well-paid jobs that instead trap them inside scam sweatshops run by Chinese criminal syndicates. Those who resist directives to engage in online fraud face beatings, food deprivation or worse.
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Several human trafficking victims who were tricked into such jobs told ProPublica that they worked on pig butchering scams that used a trading app known as MetaTrader to target victims abroad. ProPublica interviewed iPhone and Android users in the U.S., Canada and elsewhere who lost vast amounts of money — sometimes more than a million dollars — after fraudsters convinced them to download MetaTrader and deposit their savings into sham brokerages accessible via the app.
MetaTrader allows customers to access various online brokerages to trade foreign currencies and other financial instruments. However,, the Cyprus-based company behind the app, allows brokerages that it contracts with to sublicense MetaTrader software to other brokerages with few checks to ensure the legitimacy of the sublicensed operations. This has allowed scammers to use MetaTrader as a front for fraudulent websites.
Authorities Raid Alleged Cyberscam Compounds in Cambodia
by Cezary Podkul ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as they’re published. A new type of online fraud emanating from scam sweatshops in Southeast Asia is facing its first major crackdown. Cambodian authorities have stepped up raids on compounds alleged to house workers engaging in online fraud, seizing computers, phones and electric shock batons and freeing thousands of involuntary workers. And Apple has removed from its app store two popular trading apps that cybercriminal groups in Cambodia, Laos and Myanmar have used to defraud people.
In late September, ten days after ProPublica spotlighted MetaTrader’s role in financial scams, Apple removed two versions of it, MetaTrader 4 and MetaTrader 5, from its app store. However, already-installed versions remain active. The apps are also still available on Google’s Android app store. Apple and Google did not respond to requests for comment. MetaQuotes also didn’t respond, but a representativethat the company received a letter from Apple on Sept. 23 stating that its apps do not comply with the app store’s review guidelines.
Cooperation from tech platforms is one prong of a multistep strategy to fight the scams,, a United Nations on human rights in Cambodia. Another prong — more aggressive law enforcement — is finally starting to happen in Cambodia, where authorities have stepped up their efforts to crack down on criminal syndicates perpetrating the scams.
Since mid-September,in at least three Cambodian cities have freed thousands of workers from buildings where they were said to have been detained against their will, according to press releases and local news reports. The crackdowns followed and and press, .
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In Sihanoukville, a coastal city in Cambodia that has become the country’s de facto capital of online fraud, provincial authorities described finding almost 2,000 foreign workers from 11 countries when they inspected just four compounds on suspicion of human trafficking, illegal detention, torture or other crimes. Authorities identified people from China, Vietnam, Malaysia, Indonesia, India, Bangladesh and other nearby countries, along with some from as far away as Russia.but were fined for working in Cambodia without permits or sent to an immigration detention center for deportation. are ongoing.
In Phnom Penh, the nation’s capital, hundreds of foreigners were removed from buildings in at least 11 similar raids, according to local media outlet. The compounds dotted the city, including some prominent locations like a building across the street from the Australian Embassy.
The raids have confirmed the worrying nexus of cybercrime, human trafficking and torture that ProPublica documented in its investigation. Aone of a building complex in Sihanoukville listed 8,776 phones, 804 computers, 16 laptops, four pairs of handcuffs and 10 electric shock devices among evidence seized in the raid. shot by a VOD reporter shows buildings with barred windows surrounded by barbed-wire fences, similar to locations visited by ProPublica in May where workers alleged illegal detention and torture.
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The coordinated inspections are a big step up from the previous response by the Cambodian government. Authorities had previously spent months denying allegations of human trafficking linked to cybercriminal groups in Cambodia. When trafficked workers complained, police occasionally rescued individual workers, even as they sometimes.
The change is noticeable. On Sept. 29, Cambodia’s prime minister, Hun Sen,the problem, saying “do not let Cambodia become a haven of crime, a place of money laundering, a place of human trafficking,” . Vietnam’s Foreign Ministry that Cambodian and Vietnamese authorities have saved over 1,000 Vietnamese citizens who had been tricked into working illegally in Cambodia. Jake Sims, Cambodia country director for , a nongovernmental organization that has been helping rescue people trapped inside scam sweatshops, commended the efforts to end what he called the “scam-slavery phenomenon.” Sims said more action is needed to hold perpetrators accountable and to care for victims, and he cautioned that the task will become more difficult as criminal groups shift operations to more remote regions.
There’s evidence that’s already happening. Even as authorities raided some scam locations in Sihanoukville, others were busyand their workers elsewhere, according to local news reports. Operations in Chinatown, an area notorious for allegations of scam-linked forced labor, emptied out their workers over the weekend of Sept. 17-18 before any police raid could take place. When local reporters arrived on the scene, they could freely enter what had once been a heavily guarded prison-like area. One reporter saw workers ; a tuk-tuk driver he’d witnessed five or six buses at a time leaving the area in recent weeks.
Some of the workers wereon the Thailand-Cambodia border, according to three individuals who have been involved in rescuing human trafficking victims from scam compounds in Cambodia in recent months. One of the three shared coordinates provided by a person who was relocated from Sihanoukville, which matched that description. Myanmar, where upheaval in the wake of a military coup has created an opportunity for criminal syndicates to expand, is also .
“It obviously raises concerns that these enslaved individuals are simply being moved around the country rather than being freed,” said Naly Pilorge, outreach director for, a Cambodian human rights organization that has also seen signs that scam operations are relocating to rural areas. She said there’s only one thing the world needs to know about the scam industry that’s taken root in her country: “It must stop altogether.”
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