U.S. Treasury Department Sanctions Cyber Scam Operations
The U.S. Treasury Department imposed sanctions on 19 targets across Southeast Asia on Monday, targeting significant cyber scam operations that defrauded Americans of over $10 billion in 2024 alone, marking a 66% rise from the previous year.
The Office of Foreign Assets Control (OFAC) identified nine entities operating from Burma’s infamous Shwe Kokko hub and ten targets based in Cambodia, all associated with large-scale “pig butchering” operations that employ forced labor and violence to deceive victims through fraudulent investment platforms.
“Southeast Asia’s cyber scam industry not only jeopardizes the well-being and financial security of Americans, but also subjects thousands of people to modern slavery,” stated John K. Hurley, Under Secretary of the Treasury for Terrorism and Financial Intelligence.
The Treasury accused these operations of specifically recruiting English-speaking workers to target American victims, with some fraudsters setting quotas for daily victim contacts.
Chinese national She Zhijiang and Karen National Army leader Saw Chit Thu established Yatai New City as a criminal empire in Burma’s Shwe Kokko, a vast compound tailored for gambling, drug trafficking, prostitution, and global cyber scams, according to OFAC.
The Treasury noted that the compound is protected by the KNA, profiting from both scam operations and utility sales.
Additionally, the Treasury targeted the scam network in Cambodia, focusing on former casino complexes in Sihanoukville that it alleges now function as fraud centers.
The designations include T C Capital Co. Ltd., owner of the Golden Sun Sky Casino and Hotel, and K B Hotel Co. Ltd., both of which are compounds where enslaved workers are forced to conduct virtual currency scams, as per OFAC.
These operations are managed by Chinese nationals with extensive criminal backgrounds, including Dong Lecheng, who was convicted of money laundering in China in 2008, and Xu Aimin, who spent 10 years in a Chinese prison for running an illegal billion-dollar online gambling ring.
A report from Humanity Research Consultancy linked Cambodia’s ruling elite to a $19 billion crypto-driven scam industry as of May, while a UN report cautioned that these syndicates are extending their operations from Southeast Asia to Africa and the Middle East.
Stablecoins like USDT are particularly appealing “because they allow scammers to immediately transfer stolen funds from a victim in the U.S. to a criminal compound in Southeast Asia,” stated Alice Frei, head of security and compliance at Outset PR, in an interview.
However, Frei added, “Once investigators identify the bad actors, they can trace the money and collaborate with companies to freeze it.”
While sanctions from organizations like OFAC are effective, she noted, “they’re not a silver bullet.” When a money laundering hub is sanctioned, “it compels exchanges and stablecoin issuers to freeze associated funds, which disrupts the scammers’ most accessible routes.”
According to Frei, criminal networks frequently “rebrand” and “set up new guarantee markets” when sanctioned, emphasizing that “effectiveness depends on continuous enforcement pressure.”
