The expanding Southeast Asian casino industry has become the nexus of the region's criminal ecosystem, including its cyber fraud industry, and it is facilitating large-scale money laundering by organized crime networks, a new United Nations report reveals.
The money laundering includes the proceeds from online scams like pig-butchering schemes, where scammers develop a relationship with a victim and lure them into making fraudulent investments.
In many cases, such scams originate from the casinos themselves, which are often located in lawless areas of countries like Laos and Myanmar.
Hundreds of thousands of people are believed to have been trafficked into scamming compounds in these areas and forced to carry out telecommunications fraud.
The use of casinos to launder organized crime proceeds in Southeast Asia is not necessarily new.
As the report points out, multiple Philippines-based casinos helped to launder about $81 million believed stolen by North Korea's Lazarus hacking group from Bangladesh Bank.
Whereas casinos near the border with China and Thailand originally catered to tourists gambling in person, when the pandemic arrived and travel was frozen, many shifted their operations to cyber fraud.
There are an untold number of online casinos also involved in money laundering.
These online gambling platforms are now one of the most popular means for cryptocurrency-based money laundering, the UN said.
In November 2023, the U.S. Department of Justice and Tether froze $225 million in USDT connected to Southeast Asia-based pig butchering scams.
One case study presented in the report displays the extent to which casino enterprises are involved in cybercrime.
A recent crackdown by China on cross-border cybercriminal operations in Myanmar - alongside a successful rebel offensive in the Kokang region - has seen the arrest and repatriation of tens of thousands of people involved in the industry in northern Myanmar.
As the report highlights, the organized criminal actors making billions from cyber fraud have proved adept at shifting operations under pressure.
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James Reddick has worked as a journalist around the world, including in Lebanon and in Cambodia, where he was Deputy Managing Editor of The Phnom Penh Post.
He is also a radio and podcast producer for outlets like Snap Judgment.
This Cyber News was published on therecord.media. Publication date: Tue, 16 Jan 2024 21:45:14 +0000