How Shwe Kokko Became a Global Scam Hub Protected by Armed Power

A border city where fraud and forced labor meet

Myanmar authorities reported detaining 1,590 foreign nationals during five days of November raids in Shwe Kokko, a city on the Moei River opposite Thailand where gleaming towers have replaced cornfields. The operation exposed the scale of a border economy built around online fraud, illegal gambling, money laundering and workers trafficked into guarded compounds.

As of December 3, 2025, the pressure on Shwe Kokko included Thai electricity cuts, Chinese demands for stronger enforcement and U.S. sanctions against people and businesses supporting the compounds. Myanmar authorities reported seizing thousands of phones and computers, along with satellite internet equipment. Yet operators had adapted to earlier disruptions with diesel generators and satellite connections, while new buildings continued to appear.

Victims in the United States, China, Europe and elsewhere have lost billions of dollars to romance and investment schemes associated with these networks. Many people sending the fraudulent messages are themselves captives, recruited through false job advertisements and forced to deceive strangers under threat of violence.

Shwe Kokko's durability rests on more than technology. Local militia leaders protect or tolerate the compounds, collect fees and sell the services that keep them operating. Myanmar's military has relied on those armed groups to control territory. The resulting business arrangement helps explain why arrests and equipment seizures have disrupted the city without ending its criminal economy.

How a militia outpost became a development project

Shwe Kokko lies in Karen State, where the Myanmar military and ethnic armed groups have contested power for decades. The Karen National Liberation Army once controlled the area. After Myanmar's army advanced through it in 1995, Saw Chit Thu, a commander from a Karen splinter group, gained influence.

In 2010, his force became the Karen Border Guard Force, or BGF, under military oversight. It retained considerable autonomy and expanded into border businesses, alongside patronage, protection payments and illicit trade.

Myanmar Yatai International Holdings Group entered a joint venture in 2017 with Chit Lin Myaing, a company linked to the militia, to build Shwe Kokko New City. Promotional brochures promised luxury villas, hotels, shopping streets and casino resorts aimed at Chinese visitors.

Construction soon spread far beyond what its licensing allowed. Promoters sometimes presented the development as part of China's Belt and Road Initiative, but Chinese officials denied that it was an approved project under that program. Myanmar's civilian government investigated and ordered a pause after reports of unauthorized building, casinos and migration increased.

The pause proved temporary. The military coup in 2021 plunged Myanmar into conflict, weakening the prospects for sustained civilian supervision of the border development.

The developer and the armed group behind the city

She Zhijiang, the Chinese businessman behind the development, had made a fortune in online gambling in the Philippines and Cambodia before reaching his agreement with the Karen militia. Thai authorities arrested him in 2022. He was later extradited to China to face charges connected with money laundering and illegal gambling.

She publicly rejected allegations that his company operated scams and described himself as a victim of political pressure from Beijing. Local people and analysts, meanwhile, described compounds around Shwe Kokko as centers of fraud sustained by trafficked labor and militia protection.

Saw Chit Thu's force controlled access to the area, sold land or permission to use it, and collected a share of utility charges paid by compounds. In 2024, the BGF renamed itself the Karen National Army, or KNA, after declaring neutrality from Myanmar's junta. Its leaders continued overseeing the zone.

The United States has sanctioned Saw Chit Thu for enabling forced labor and cyber scams. Researchers describe comparable arrangements elsewhere in Myanmar, where militia business interests expanded alongside the military's practice of handing local control to allied armed forces.

How an online relationship becomes a financial trap

Shwe Kokko's fraud operations use social engineering, meaning deception designed to persuade people to hand over money or information. A common scheme, often called pig butchering, combines an extended online relationship with supposed investment advice.

Operators approach people through social media or messaging services and build a friendship or romance. They then direct the target to a fake cryptocurrency investment platform. The platform displays invented profits, encouraging the person to deposit more. When the victim tries to withdraw money, demands for additional payments follow, supposedly to cover fees or unlock the account.

Teams divide the work. Some make contact and establish trust. Others guide the supposed investments and manage the false trading interface. Another group handles the movement and withdrawal of proceeds. Money passes through cryptocurrency wallets, electronic wallets and informal financial networks to conceal its criminal origin, a process known as money laundering.

Managers monitor conversations from control rooms and enforce performance targets. Scripts receive daily updates, including details about London weather or restaurant trends in Los Angeles, so operators can maintain convincing fictional lives. Targets include lonely retirees, new immigrants and busy professionals. Workers who miss quotas face punishment.

The workers forced to impersonate someone else

Recruiters advertise sales jobs in Thailand with high salaries and free accommodation. Some recruits arrive in Bangkok, meet a contact at the airport and are taken by van toward Myanmar. Once inside a compound, their phones and passports are confiscated.

Guards and militia members enforce curfews, while shifts extend beyond 12 hours, night after night. Some people accept the work for its pay, particularly those with language or digital marketing skills. Many others are compelled to participate. Refusal can bring beatings, electric shocks, starvation or sale to another compound.

A former forced worker from Ethiopia described being ordered to impersonate a Ukrainian woman while targeting Western men with romance and investment fraud. He explained how his assigned identity was supposed to lead conversations toward cryptocurrency:

A recruiter told me I was supposed to be an accomplished but war scarred Ukrainian businesswoman. In between intimate conversations, I had to talk about the success of my investments so that the victims would want to know more until they themselves asked me to help them invest.

Law enforcement agencies said Americans lost more than $10 billion to online fraud in 2024, much of it connected with cryptocurrency investment schemes. A United Nations assessment estimated losses of up to $37 billion among victims in East and Southeast Asia in 2023. The figures concern different regions and years, showing the reach of the wider fraud economy.

Migrants from Nepal, Uganda, Morocco, Vietnam and other countries have described detention, torture and lasting fear after escape. The United Nations Office on Drugs and Crime estimates that hundreds of thousands of people work under coercive conditions in scam compounds across Southeast Asia.

Why the border location protects the business

Shwe Kokko sits a short river crossing from Thailand, within reach of major trade routes but outside ordinary Thai policing. Armed guards answer to local militia leaders rather than a transparent chain of command overseen by courts.

Militias earn money from rent, security, electricity and other services sold to compound operators. Some collect shares of business proceeds. Corruption and changing officials help sustain the arrangement, while complicated ownership structures make investigations harder.

Closing the compounds would therefore threaten income for people with weapons and political influence. Myanmar's military also depends on allied militias to hold territory, making enforcement against their businesses difficult to separate from the country's conflict.

Crossing the river gives the networks access to suppliers outside Myanmar. Fuel dealers, generator vendors, cement firms, telecommunications intermediaries and money services all help sustain the compounds. Many operate in neighboring countries or trade through them.

Electricity cuts brought generators and satellite connections

In early 2025, Thailand cut grid electricity to three clusters of suspected scam hubs along the border, including the area around Shwe Kokko. The action followed prominent cases involving people taken into compounds and growing concern about damage to Thailand's reputation.

Thailand's prime minister explained the decision in terms of public protection and national security:

We must take care of our people first. The impact on Thai people and our country's image has been enormous. It is time to take decisive action.

The cuts slowed activity, but operators brought in rows of diesel generators. Satellite internet replaced some mobile data and fiber connections. Border authorities later seized and disabled hundreds of smuggled satellite terminals.

Myanmar media publicized the seizure of 101 Starlink devices during operations around Shwe Kokko. Raids at nearby KK Park found dozens more. Starlink is not licensed to operate in Myanmar; terminals were smuggled from Thailand and used accounts registered in other countries. Following public pressure, the company deactivated many devices used by compounds.

The replacement power supply created additional costs for people living nearby. Industrial generators ran server rooms, work floors and dormitories around the clock, spreading diesel fumes across parts of the border area. Diesel exhaust releases carbon dioxide and fine particles harmful to lungs. Researchers have also warned about pollutants including trace metals. Bulk fuel smuggling and storage without oversight increase the danger of spills and fires.

China presses for arrests and returns

Chinese nationals have been among the largest groups targeted by scam syndicates. Beijing has pressed neighboring governments to strengthen enforcement, particularly after prominent cases involving its citizens.

During a visit to Thailand, a Chinese foreign ministry spokesperson described cooperation against border fraud as a priority:

China attaches great importance to combating the recent string of cross border telecom fraud and other vicious cases along the Thailand Myanmar border. We stand ready to work with Thailand and other countries to beef up law enforcement cooperation, crack down on online gambling and telecom fraud, protect the safety of Chinese citizens overseas and their lawful rights and interests, and keep normal cross border exchanges between China and relevant countries in order.

Joint investigations and deportations followed, including transfers of suspected ringleaders and the return of captive workers. People and money nevertheless continued moving through compounds supported by permissive local authorities and ownership networks that obstruct policing.

What the November raids changed

Myanmar authorities announced an autumn campaign against compounds in Shwe Kokko and KK Park. State media and officials described the seizure of thousands of phones and computers, dozens of satellite receivers and control of hundreds of buildings.

Authorities said 1,590 foreigners were detained over five days in Shwe Kokko in November, alleging that many had entered Myanmar illegally and participated in online fraud. Images of discarded electronics presented the campaign as a break with longstanding impunity.

The KNA, which had long protected Shwe Kokko, declared a final war against scam centers and joined raids with regime forces. Thousands of Chinese workers fled before and after the operations, producing traffic jams toward the border. Local sources said senior figures received advance warning and left first.

A militia spokesperson said people still in the compounds were leaving and described the intended treatment of foreigners who were detained:

Many who worked in the compounds have already fled. Foreign nationals caught will be deported after legal procedures.

Operations around Shwe Kokko and KK Park rescued some trafficking victims and interrupted activity. Their lasting reach was still uncertain on December 3. Militia participation has drawn skepticism because the same groups earn money from compound rent and services, while the military relies on them for territorial control.

Raids can be staged, restricted to selected sites or directed against rivals. New compounds often appear after demolitions. Thai officials have also reported waves of people emerging after crackdowns, including victims needing screening and assistance.

Sanctions reach beyond compound operators

The U.S. Treasury has targeted leaders, companies and service providers linked to Shwe Kokko and other fraud hubs. Recent measures singled out nine targets in Shwe Kokko and ten in Cambodia, including people associated with the KNA and businesses supplying property, security and energy.

The designations also highlighted a digital platform used to launder proceeds from scams and cyber heists. Washington acted after a surge in complaints from American victims. Officials described the more than $10 billion reported lost in 2024 as a sharp increase from the previous year.

Sanctions block assets and restrict designated actors' access to the dollar financial system. Their purpose is to make routine business harder, including renting premises, paying workers, buying fuel and transferring funds across borders. Entities that knowingly provide material support can also face penalties, and companies continuing such relationships risk access to U.S. banks and markets.

The Treasury described the purpose of its sanctions policy and encouraged businesses to disengage from the scam economy:

The goal of sanctions is to bring about positive change in behavior.

U.S. measures have also focused attention on Cambodian casino clusters and companies operating across the Myanmar border and nearby cities. Those connections matter because Shwe Kokko depends on outside suppliers. Restricting those relationships can slow operations, although earlier patterns suggest the networks tend to reorganize rather than disappear.

A timeline of Shwe Kokko's expansion

Shwe Kokko's growth connects changes in armed control with a development deal, Myanmar's political crisis and successive enforcement campaigns. The main stages stretch across three decades:

• 1995: Myanmar's army advanced into an area previously controlled by the Karen National Liberation Army, and Saw Chit Thu gained influence.
• 2010: His force became the Karen Border Guard Force under military oversight.
• 2017: Myanmar Yatai International Holdings Group and militia linked Chit Lin Myaing entered the Shwe Kokko New City venture.
• 2021: Myanmar's military coup deepened conflict after civilian authorities had investigated the project and ordered construction paused.
• 2022: Thai authorities arrested developer She Zhijiang. He was later extradited to China.
• 2024: The BGF renamed itself the Karen National Army after declaring neutrality from the junta.
• Early 2025: Thailand cut electricity to three border clusters associated with scam operations.
• Autumn and November 2025: Myanmar authorities conducted operations around KK Park and Shwe Kokko, reporting 1,590 foreign detainees in Shwe Kokko over five days.

The sequence shows how the city expanded through changing political conditions while retaining a business model tied to armed protection, outside investment and services crossing the border.

Escape brings another struggle for victims

Families of captive workers scramble to raise ransom payments, while rescues remain dangerous and uncommon in a war zone. Escapees describe losing their papers and phones, facing rising quotas and being traded between compounds when they resist.

Civil society groups, embassies and informal community rescue efforts are overstretched. Safe accommodation, interpretation and care for psychological trauma are in short supply. Some rescued workers face immigration charges despite having been trafficked. Advocates argue that treating them as victims first is necessary both for their protection and for prosecutions of traffickers.

Enforcement across the Mekong region points to several connected measures: policing coordinated across borders, controls on power and fuel, disruption of internet access, patrols against smuggling and honest checks at crossings. Action against financial channels matters alongside raids, including the services that convert cryptocurrency into ordinary money, electronic wallet agents and bank accounts used to withdraw proceeds.

Transparent prosecutions of militia leaders and business partners who supplied land, utilities and protection would address the people earning money from the system. Sustained enforcement also depends on credible courts and civilian oversight, both difficult to secure amid Myanmar's conflict. Pressure from Thailand, China and the United States has forced changes, while local armed groups continue to benefit from keeping the compounds open.

Key Points

• Shwe Kokko grew from a militia outpost into a center of online fraud, gambling, money laundering and trafficking.
• A development venture launched in 2017 expanded beyond its permissions under militia protection.
• The Karen National Army earns money from land, utilities and security supplied to compounds.
• Myanmar authorities reported detaining 1,590 foreigners in Shwe Kokko over five days in November 2025.
• Thai electricity cuts prompted operators to use diesel generators and satellite internet.
• Recent U.S. sanctions targeted nine actors connected with Shwe Kokko and ten in Cambodia.
• Many workers conducting scams are trafficking victims subjected to violence and forced labor.
• Disrupting the networks requires action against their finances and protectors, alongside support for people escaping the compounds.