‘A game of whack-a-mole’: how could the scam industry bring China and the US together?

The compound is modern with air conditioning in every room. Inside are a medical clinic, massage parlour, and Vietnamese barbecue, Chinese hotpot and halal eateries – a full range of conveniences. Yet the residents are gone – and they appear to have fled in haste. Clothes still hang out to dry, while the stench of rotting food lingers. Located in a secluded area in Kampot province near Cambodia’s border with Vietnam, the site is believed to be a telecoms scam centre. Cambodian authorities said about 6,000 to 7,000 people had been housed across 31 multi-storey buildings in the compound until January 17, when its alleged boss, former tycoon Ly Kuong, was detained. Thousands fled that day. The scene is the site of Cambodia’s most extensive crackdown yet on the notorious online scam industry that has long flourished within its borders. But it also highlights the scale of such operations across Southeast Asia – and points to a rare opportunity for Beijing and Washington to collaborate on dismantling the transnational crime networks that sustain them. While there is no agreed official count of how many such centres are operating in Cambodia, a minister from the Commission for Combating Online Scams told Associated Press last month that since July 2025, 250 locations had been targeted, of which about 200 had been closed. The government has set a target of the end of this month for shutting down all the country’s online scam centres, having this week passed its first legislation aimed at such operations. Under the new legislation, organisers or directors of scam centres can be sentenced to five to 10 years in prison and fined 500 million to 1 billion riels (US$125,000-US$250,000). In case of a death linked to a scam centre, defendants can face up to life in prison. Researchers have traced the roots of the telecoms and online scam industry to Taiwan in the 1990s, from where operations leapfrogged to mainland China, before spreading to Cambodia, Laos, Myanmar and the Philippines. Among the most lucrative types of fraud operated out of these compounds are “pig-butchering scams”, in which a fabricated online persona is used to build a romantic or friendly relationship with the target, who is then lured into a fake investment scheme. Meanwhile, hundreds of thousands of people, mostly from Asian countries, have been trafficked into scam centres, many of them lured with promises of high-paying jobs and free housing after losing work during the Covid-19 pandemic. The growing use of cryptocurrencies and artificial intelligence has made scam operations harder for law-enforcement agencies to detect and trace. In February, the South China Morning Post was granted access by the Cambodian government to a deserted compound in Kampot. At first glance, the facility seemed like an orderly workplace: breakfast was offered from 6am, with food available until 11pm. Gambling and drug abuse were forbidden, according to a “work reminder” notice posted on the wall. However, surveillance was strict: workers who left their desks had to notify a supervisor, and personal phones were subject to periodic checks to prevent, as one notice put it, “leaking confidential information or videos taken at the workplace”. Those who “left the company under abnormal circumstances” were barred from contacting their former colleagues, while anyone leaving the compound “had to be accompanied and had to return”. There were also clear signs of the centre’s malign activity. Documents left behind tell of the tight scripts used to reel in “clients”: the first two days were dedicated to creating a personal impression and building trust by chatting about everything from food and work to zodiac signs. Beginning from the second day, talk could shift slowly towards family, past relationships, the “client’s” dream life – and from there, to investment opportunities, according to a note in Chinese, English and Thai. “No interrogation-style questioning!!! Always respond to client inquiries,” one worker had written in their notebook in Chinese. If you ask what kind of person is easier to defraud, I would say that it’s not about intelligence but trust Xu Peng, Humanitarian and Conflict Response Institute, University of Manchester It is unclear how many people have worked in such compounds across Cambodia and the region, but the United Nations estimated in a report in February that at least 300,000 people from some 66 countries had been trafficked into scam operations in Southeast Asia. Most of them, the report said, had “experienced or witnessed torture and other serious human rights abuses”, including sexual assault and forced labour. Xu Peng, a research fellow at the University of Manchester’s Humanitarian and Conflict Response Institute, said victims of online fraud were not necessarily more gullible than the average person. “If you ask what kind of person is easier to defraud, I would say that it’s not about intelligence but trust, because whether they were lured into working or swindled, everything is based on the trust created by the scam operators,” she said. And trusting was part of human nature, Peng said. “People usually do something out of trust – you trust that person as reliable, so you transfer your money; you trust that this is a high-paying job opportunity, so you go [for it].” Over the past few years, online scams originating in Southeast Asia have come under growing scrutiny, both within the region and globally as governments and international bodies view them more seriously as a threat to public security. In Southeast Asia, Asean member states have set up new working groups and regional dialogues to tackle the problem, while Interpol has issued a series of warnings about the region’s scamming industry and related cybercrime. China, once a major hub for online scams, has stepped up crackdowns within and beyond its borders, particularly following reports of Chinese citizens being abducted to work in scam centres in northern Myanmar. This spurred rare cross-border operations, beginning in mid-2023, that ultimately brought down four powerful mafia-like, family-run crime syndicates in Kokang, a self-administered zone on Myanmar’s border with Yunnan province. Other countries’ governments have also intensified their efforts. In November last year, South Korea imposed its largest-ever unilateral sanctions on 132 organisations and 15 individuals tied to Cambodia-based transnational criminal networks that targeted its citizens. Parts of its official development assistance to Cambodia were also suspended. One month earlier, the United States and Britain had jointly imposed sweeping sanctions on 146 targets linked to the Prince Group, a Cambodia-based network whose founder and chairman, billionaire Chen Zhi, was accused of running a transnational criminal empire built on online investment scams targeting Americans and others worldwide. October also saw the announcement by federal prosecutors that the US had seized 127,271 bitcoin – worth US$14.41 billion at the time – once controlled by Chen. The Trump administration said the same month that it had given Cambodia a 90-day deadline to enter talks with US officials on shutting down scam operations targeting Americans, as part of a deal for lower tariffs. Pressure from foreign governments was a major driver behind Cambodia’s latest crackdown on the scam industry, according to Ivan Franceschini, co-author of Scam: Inside Southeast Asia’s Cybercrime Compounds, which was published last year. He said actions by countries such as China, the US and South Korea had inflicted significant reputational damage on Cambodia’s leadership and placed the nation’s economy under considerable strain. “Faced with what was rapidly becoming a full-blown crisis, the Cambodian government had to act,” said Franceschini, who is also deputy director of the Centre for Contemporary Chinese Studies at the University of Melbourne. In a move that drew international attention, the Cambodian government announced in January that it had arrested and extradited Chen to China – his country of birth – after revoking his Cambodian citizenship. Cambodian authorities said the extradition followed months of cooperation between the two countries. The Chen case also highlighted a rare area of shared interest between Beijing and Washington, at a time of sharp strategic rivalry between the two powers. According to the Pew Research Centre, 73 per cent of US adults have experienced some kind of online scam or attack, with the proportion of people affected relatively consistent across age groups. Most Americans surveyed said they received scam calls, texts and emails at least weekly. In China, police intercepted 3.6 billion fraudulent phone calls and 3.3 billion fraudulent text messages in 2025 alone. They also conducted 6.75 million in-person interventions to dissuade people from engaging with scammers. Much of this scam activity is believed to originate in Southeast Asia. Collaboration between Beijing and Washington remained limited, however, Franceschini said. “Many in the United States still tend to view the industry as a Chinese-engineered phenomenon that poses a threat to American dominance, while China prefers to engage with regional partners to address the problem,” he said. “This makes a coordinated response unlikely, at least in the near future.” Allison Pytlak, director of the cyber programme at Washington-based think tank the Stimson Centre, said there was a recognition among many Western countries affected by online fraud and scams that they needed to engage with China. “That is obviously very challenging given the relationship between the two countries at present – which also extends into an adversarial cyber relationship – and is compounded by the fact that many of the operations are managed by Chinese criminal networks,” she said. “It might be feasible to engage on an operational level, such as case-by-case intelligence sharing, or in the context of a wider alliance or coalition, [rather] than bilaterally.” Courtney Weatherby, deputy director of the centre’s Southeast Asia programme, said the biggest challenge lay in how Washington and Beijing could navigate their complex relationship “to identify specific, concrete and targeted areas for collaboration”. “For instance, sharing information on specific cases where both countries have an interest may be possible, although complicated,” she noted. Many governments have accelerated their own measures to tackle online fraud. In Singapore, scammers and members or recruiters of scam syndicates face mandatory caning of up to 24 strokes under a new law. Scam victims in the city state lost a record S$1.1 billion (US$857.01 million) in 2024, and scams made up 60 per cent of all reported crimes, the government said. Meta said last month it had disabled more than 150,000 accounts linked to scam centres following a joint operation with Thai police, the FBI and the US Department of Justice’s Scam Center Strike Force. Experts are unsure about whether Cambodia’s crackdown will have a lasting impact on the industry. According to Franceschini, scam operations in parts of Cambodia are continuing largely undisturbed, while recruitment into online scam compounds in the country continues apace. Without support, some foreign victims of human trafficking forced into criminality remain stranded in Phnom Penh, leaving them extremely vulnerable to being trafficked again. “The industry’s decentralised structure means that shutting down individual operations or removing specific players, while disruptive, does not necessarily dismantle the broader network,” he said. “The pattern observed in recent years is consistent: when pressure builds in one location, the industry adapts, relocates, and continues to operate.” Peng, in Manchester, said she had observed a similar pattern in Myanmar, where new scam centres were built in inland regions after those in the border areas were torn down. There have also been signs that the industry is moving to other parts of the world. In February, Interpol announced that a two-month joint operation across 16 African countries had resulted in the arrest of 651 suspected cybercriminals and the recovery of more than US$4.3 million. Last month, Sri Lankan business paper the Daily FT reported that Sri Lanka had arrested 134 foreign nationals – including 126 from mainland China, four from Taiwan and four from Myanmar – over a suspected online scam network. Following the detentions, the Chinese embassy in Sri Lanka reaffirmed its commitment to anti-scam cooperation with the island nation. “Due to Sri Lanka’s well-developed telecommunications infrastructure, favourable geographical location, relatively lenient visa policies, as well as the kindness and friendliness of its people, some telecoms fraud criminal gangs have moved to Sri Lanka and continue to engage in fraud activities targeting Chinese citizens at home and abroad,” the embassy said. Peng said profits were so lucrative that they would continue to incentivise the perpetrators, who to maintain the business would always look for a new location, a new front and resources to begin again. “Between the scam centres and law enforcement, it is like a game of whack-a-mole.”

‘A game of whack-a-mole’: how could the scam industry bring China and the US together?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Cambodia has vowed to stamp out the scam compounds on its soil by month’s end – but perpetrators remain drawn to the potential for huge profits

Cambodia has vowed to stamp out the scam compounds on its soil by month’s end – but perpetrators remain drawn to the potential for huge profits