Junta and Its Local Affiliates Keep Scam Centers Running, Despite War and Global Pressure
This piece and the lead image were first published and produced by Asia Democracy Chronicles.
Thousands of men and women forced to work in scam hubs in Myawaddy, a Myanmar town bordering Thailand, have been freed and returned to their respective homelands in the last few months, following a major crackdown there in February.
Yet tens of thousands more remain in Myanmar’s multiplying scam centers, which observers say derive their resilience not only from the armed local and Chinese criminal gangs that operate and protect them, but also from state actors who benefit from the profits they generate.
In fact, the scam hubs are operating in the midst of a raging civil war that has already resulted in the death of over 52,000 people and the displacement of millions more. And while the February crackdown came after the dismantling of another major scam spot by a pro-democracy force, indications are the operations have merely moved elsewhere or are waiting to restart.
In a recent email interview with Asia Democracy Chronicles (ADC), Dr. Tun Aung Shwe, the National Unity Government’s (NUG) Ministry of Foreign Affairs Representative in Australia, said the link between scam center profits and the junta was an “open secret” within Myanmar and internationally.
“While exact figures on direct transfers to the junta remain opaque, multiple investigations by Justice for Myanmar (JFM) and reports from the U.S. Institute of Peace (USIP) indicate that the regime benefits through so-called ‘protection taxes,’ a share of profits from operators, and control over land and infrastructure that enable scam compounds,” he said. “Additionally, junta-linked cronies and Border Guard Forces are involved in providing security and logistics.”
The NUG is Myanmar’s shadow government that was formed following the February 2021 coup. JFM is a non-government group focused on revealing the junta’s sources of funds while the USIP is a U.S. government think tank.
According to Tun Aung Shwe the scam operations setup in Myanmar reflects a “warlord governance model,” where the junta outsources territorial control to militias and criminal networks in exchange for loyalty and financial support. “The Karen BGF, led by Saw Chit Thu, and the Democratic Karen Benevolent Army (DKBA), led by Sai Kyaw Hlaing, are both aligned with the junta and operate semi-autonomously in the Myawaddy region,” he pointed out. “These groups have repeatedly been linked to providing armed security for scam compounds, enabling Chinese and regional crime syndicates to operate freely. They also act as local enforcers or intermediaries in disputes.
“Profits are typically distributed among junta-aligned militias like the BGF and DKBA for protection services, local administrators, or military officers in the form of bribes, and foreign crime bosses—especially those from China or Southeast Asia,” Tun Aung Shwe added.
Phone tracks and profit share
In a March 2025 article posted on its website, JFM asserted that the scam operations in the Southeast Asian nation “could not be possible without the involvement of the Myanmar military, militias under its command, and their associates.”
“In northern Shan State, the industry in Kokang was closely intertwined with the interests of powerful families at the top of the now deposed Kokang BGF (Border Guard Force) hierarchy, under Myanmar military command,” it said. “In Myawaddy Township, the Karen BGF plays a central role, both controlling cyber scam developments, purchasing and distributing fuel and electricity, and in human trafficking and smuggling across the Thai border.
“The Myanmar military has overseen the criminal activities of its militia groups for both direct financial benefit of these lucrative operations and to sustain their relationships with groups that it can use in its military operations,” JFM continued. “These operations involve the commission of war crimes and crimes against humanity.”
USIP has made similar assertions in its various reports on scam compounds in Myanmar and elsewhere. In one 2024 report, it even said that the Myanmar military was getting half of the annual revenues of the scam operations in Karen State, which at that time amounted to some $192 million from the Shwe Kokko scam center alone.
An analysis by the Washington, D.C.-based nonprofit C4ADS on phone geolocations or AdTech data throughout 2024 revealed frequent phone movements between Myawaddy scam centers and government buildings in Naypyidaw.
“These patterns suggest a hidden connection between organized crime and the military regime,” said C4ADS analyst Michael di Girolamo in an email interview with ADC. “Additionally, phones frequently travel between scam centers like Dongmei Zone and Taichang Park, indicating collaboration among criminal groups.”
C4ADS specializes in data-driven investigations of international illicit networks. For its scrutiny of the Myawaddy scam hubs, di Girolamo said that C4ADS “tracked the movements of multiple devices (labelled A to P)” across the scam centers and “key locations in Naypyidaw, revealing potential ties between organized crime and the Myanmar junta.”
“The data highlight frequent interactions between scam compounds like Shwe Kokko, KK Park, Dongmei Zone, and Taichang Park, as well as government buildings, suggesting collaboration among criminal syndicates and possible complicity of state actors,” he said.
Alongside AdTech data, C4ADS employed two open-source mapping tools, Kepler and QGIS, to analyze and visualize the data, including geocoordinates and their temporal patterns.
Explained di Girolamo: “Kepler’s timestamp feature allowed us to track not only where devices were detected but also when, revealing movement patterns. QGIS, while less suited for temporal mapping, offers a more updated basemap and clearer coordinate visualization, making it ideal for the report’s static visuals.”
Scam epicenter
In his testimony before the U.S.-China Economic and Security Review Commission (USCC) just last March, USIP Country Director for the Burma Project Jason Tower said Myanmar, Cambodia, and Laos form the epicenter of the escalating scam crisis. He also described the three countries as having the “weakest governance, highest levels of corruption, greatest levels of instability, and … most politically aligned with China” in Southeast Asia.
Commented NUG’s Tun Aung Shwe: “These scam operations are part of a wider regional criminal nexus involving human trafficking – luring workers from China, Southeast and South Asia, and even Africa – cybercrime networks connected to Chinese triads and regional mafias, as well as drug trafficking and arms smuggling in the borderlands.”
For his part, International Crisis Group Senior Myanmar Adviser Richard Horsey said that Southeast Asia’s flourishing scam industry is the latest example of “sovereignty for sale,” in which both state and non-state actors profit by allowing transnational criminal groups to operate illicit businesses in the territory they control. In the case of Myanmar, he said, the scam hubs continue to thrive despite growing international attention and pressure from neighbors like China owing to a mix of individual corrupt interests and structural factors.
“These include the military’s longstanding conflict management strategy, which involves offering financial incentives to armed groups in exchange for ceasefires – a system often referred to as ‘ceasefire capitalism,’” said Horsey. “These groups are not aligned with the junta politically or ideologically, but rather pragmatically. As a result, the military’s leverage over them is limited.”
Chinese-run gambling operations that targeted mainly Chinese nationals but were based in other countries were the predecessors of these scam centers. Gambling has been illegal in China since 1949; unsurprisingly, the last few decades had many Chinese nationals visiting casinos overseas. Soon after their business-minded compatriots based abroad started offering gambling online in 2010, Chinese citizens were also placing cyber bets.
An increasingly worried Beijing tried to discourage nearby countries from hosting online gambling operators on their shores. But the promise of huge revenues was apparently too much for some governments to heed Beijing’s admonition; they turned a blind eye to the mushrooming gambling outlets, even after these morphed into scam operations that began to rely heavily on human trafficking.
In 2023, the U.N. Human Rights Office released a report that decried the trafficking of “hundreds of thousands of people” who were being forced to engage in online scams that ranged from “romance-investment scams and crypto fraud to illegal gambling.” It estimated that there were about 120,000 individuals being forced into scamming in Myanmar and 100,000 in Cambodia, aside from thousands more in Laos and the Philippines.
Multiplying victims
These days, the scam operations continue in Myanmar and elsewhere. Many of those trafficked are Chinese nationals. But as scam operators widen their range of targets and expand their ventures, those lured into their crime compounds have included people from other countries, including those in Europe and Africa.
Indian graphic designer Stephen Wesley was among the hundreds of thousands (and counting) who thought they had clinched their dream job that came with generous pay – only to end up in a scam hub. He said he even traveled to Dubai to be interviewed for what he thought was a graphic-design post in Thailand. He was elated to learn that he got the job. But after he and several other recruits landed in Bangkok, they were whisked from the airport to Mae Sot in western Thailand, and then smuggled across Moei River into Myanmar’s Myawaddy region.
There, he and his companions were forced to scam unsuspecting strangers online. “I was feeling ashamed. I was feeling guilty,” Wesley said. But refusal to do as they were told meant electric shocks and humiliating frog jumps.
Wesley spent some 40 days there before being rescued by what he said was a “Myanmar army” team in August 2024. But it may not have been a Myanmar military contingent that broke into their scam camp and spirited him and several other trafficked “workers” away in a truck, as they were later let loose to fend for themselves in the jungle and find their own way toward Thailand, where they were arrested and detained for illegal entry.
Karen State, where Myawaddy is situated, has not only the Karen BGF (now renamed as the Karen National Army or KNA) and the DKBA, but also the Karen National Union (KNU) and its armed wing, the Karen National Liberation Army (KNLA).
KNA and DKBA are in reality breakaway factions of the KNU, which has long fought the Myanmar military and is among those behind efforts to topple the junta. USIP has described DKBA as “largely neutral vis-à-vis the Myanmar army and anti-junta resistance groups such as the KNU.” But it has been less charitable toward the KNA, especially its head and “his cohorts,” who “care little about Karen autonomy and democracy pursued by KNU/KNLA,” and focus instead on maximizing profits from criminal activity.”
A few of KNU’s top officials are also allegedly involved in one of the smaller scam operations in Karen State. Two years ago, KNU said that it was conducting an investigation on the matter, but there has yet to be any report on what it has found out so far.
Soon after the February raid on the Myawaddy scam hubs, though, KNU spokesperson Padoh Saw Kler Say warned that the junta may use the current international interest in the scam centers in Myawaddy to “undermine the revolution.”
