Inside Southeast Asia's Scam Industry: Forced Labor, Billions in Fraud and the Limits of Crackdowns

KK Park fell, but the networks survived

Bombs and dynamite brought down office blocks, a small hospital, karaoke halls, gyms and dormitories at KK Park on Myanmar's border. The military government presented the demolition as the end of a vast compound that had hosted tens of thousands of workers forced to defraud people online. Days before the explosions, however, the sprawling business park had emptied out. By the time cameras recorded the buildings collapsing, the operators had already moved on.

Officials said more than 2,000 people had been detained and over 1,000 had fled across the border. Aid groups and analysts warned that as many as 20,000 people who had likely been trafficked were missing. Similar scam centers continued operating elsewhere in Myanmar and in other countries, leaving a gap between the destruction on camera and the survival of the business behind it.

As of December 2, 2025, the demolition illustrated a larger problem across Southeast Asia: fraud networks can lose buildings while retaining their money, protection and ability to relocate. Their operations exploit two groups at once, people whose savings are stolen and workers forced to carry out the deception.

Researchers describe this development as the rise of the scam state. The term draws on the idea of a narco state, where the drug trade reshapes an economy and public institutions protect criminal profit. In parts of Southeast Asia, online fraud now pays salaries, finances armed groups, rewards officials and funds construction. The business has become entwined with local money and power.

Why public crackdowns leave the core intact

Jacob Sims, a visiting fellow at Harvard University's Asia Center who studies transnational crime in the Mekong, said public crackdowns often focus on appearances rather than the networks that organize and protect fraud.

It is a way of playing Whack-a-Mole, where you do not want to hit a mole.

Sims said online fraud had grown in five years from small criminal rings into an industrial political economy. In plain terms, the business is large enough to influence how money circulates and how power is exercised. He described its position in the Mekong subregion this way:

In terms of gross GDP, it is the dominant economic engine for the entire Mekong sub region. That also makes it a dominant political engine.

Estimates put annual earnings from operations in Mekong countries at around $44 billion by late 2024, described as roughly 40 percent of their combined formal economies. Experts say the industry expanded rapidly after 2021, with worldwide estimates now exceeding $70 billion a year. Estimates of the global take range from $70 billion to amounts that rival the illicit drug trade.

Those figures help explain the difficulty of dismantling the industry. A raid can remove workers and equipment from one address while the organizers retain the resources and relationships needed to open another. Where criminal income supports construction, employment and armed groups, enforcement reaches into the interests of people with local power.

How trust becomes a financial trap

Many compounds specialize in pig butchering, a fraud in which someone patiently builds a relationship before steering the target into a fake investment. The name describes the process of cultivating trust before taking the victim's money.

A contact on a social platform or chat app may pretend to be a finance professional or a possible romantic partner. Conversations continue for weeks. Once the target feels comfortable, the contact recommends an investment, often through a cryptocurrency platform made to look legitimate.

Scam teams work from detailed scripts. Generative AI, software that creates text and other content, helps translate messages, adjust their tone and maintain dozens of conversations at once. Deepfake video and voice tools imitate people, making calls appear convincing. Mirrored websites copy the appearance and functions of genuine brokerages and cryptocurrency exchanges.

A victim may see apparent profits on a screen, then discover that withdrawing money is impossible. Access is blocked, or demands for further fees continue until the account is drained. Surveys in multiple countries found average losses above $150,000 per victim in pig butchering schemes. Many victims reported losing more than half their net worth, meaning the value of what they owned after subtracting their debts.

From gambling businesses to fraud compounds

Chinese offshore gambling businesses helped create the foundations for the scam industry. As tighter rules pushed those businesses into border regions, casino towns and special economic zones offered land, buildings and protection in places where regulation was weak.

Special economic zones are designated areas where businesses operate under particular economic rules. In the corridors described here, criminal networks used their buildings and service businesses to develop large fraud operations. Conflict in Myanmar after the 2021 coup accelerated that shift as local militias and power brokers exchanged protection for money.

Laotian officials have acknowledged hundreds of compounds inside the Golden Triangle special economic zone. In Cambodia, independent monitors have mapped more than 200 suspected sites. Many are visible to the public and protected by private guards. Their scale points to networks of protection extending beyond individual towns.

Jason Tower, a regional specialist on organized crime networks who has tracked the construction of these facilities, described how openly they operate:

These are massive pieces of infrastructure set up very publicly. You can go to borders and observe them. The fact this happens in a very public way shows an extreme level of impunity.

The industry's development spans several stages:

• After tighter rules on Chinese offshore gambling, businesses moved into border regions, casino towns and special economic zones.
• After Myanmar's 2021 coup, conflict accelerated the expansion of fraud operations protected by militias and local power brokers.
• By late 2024, operations in Mekong countries were estimated to generate around $44 billion annually.
• In October, the United States announced sanctions and indictments against a Cambodian conglomerate alleged to operate vast scam networks.
• By December 2, 2025, KK Park's demolition had become an example of a crackdown in which operators moved before buildings were destroyed.

The workers forced to deceive strangers

Recruiters lure workers with advertisements promising sales or technology jobs. On arrival, people may have their passports confiscated and be locked inside a compound. Managers impose daily quotas, turning the promised employment into forced labor.

Punishments include beatings, electric shocks, food deprivation, sexual violence and solitary confinement. Families can face ransom demands to secure a relative's release. Workers who try to escape risk torture or being sold to another criminal group.

Independent human rights experts working with the United Nations have called the situation a humanitarian and human rights crisis. Hundreds of thousands of people from Asia, Africa and Latin America have been trafficked into centers in Cambodia, Myanmar, Laos, the Philippines and Malaysia.

Rescue does not necessarily mean an immediate return home. Thousands of rescued people have spent weeks stranded at the Myanmar Thailand border in poor conditions. They need medical care, travel documents and arrangements for a secure return, while authorities must identify those who were compelled to commit fraud.

The whereabouts of the as many as 20,000 people aid groups and analysts said were missing around the KK Park crackdown remain unresolved. That uncertainty sits alongside the official figures for people detained and those who fled across the border.

A Southeast Asian industry with a global reach

Benedikt Hofmann, a regional representative with the United Nations Office on Drugs and Crime (UNODC), described Southeast Asia's central role in the business:

Southeast Asia is the ground zero for the global scamming industry.

INTERPOL has documented trafficking victims from more than 60 countries, with nearly three quarters directed to Southeast Asia. Recent operations have identified compounds in the Middle East, West Africa and Central America as well as the Mekong region.

Cyril Gout, INTERPOL's acting executive director of police services, said national agencies and their partners need to work together against the international spread of these operations:

The reach of online scam centres spans the globe and represents a dynamic and persistent global challenge. Tackling this rapidly globalizing threat requires a coordinated international response.

UN crime experts have also warned that parts of East Timor are at risk. A raid in its Oecusse enclave uncovered equipment and operating patterns matching those of scam compounds elsewhere. INTERPOL has flagged new sites in West Africa, while authorities in the Middle East and Central America have reported similar facilities.

The movement of compounds connects several crimes across borders. A worker can be recruited in one country, confined in another and forced to target people elsewhere, while the proceeds pass through still more jurisdictions. Police need to follow recruiters, organizers and money handlers across that entire chain.

AI and satellite connections keep operations running

Artificial intelligence helps scam teams translate messages in real time, adjust the personalities they present and produce convincing scripts. Deepfake tools create photographs, voice notes and live video that can help recruiters deceive job seekers and fraudsters deceive investment victims.

Sextortion operations have adopted profiles generated by AI to target young people in particular. Sextortion means threatening someone with the release of sexual material to force them to pay or comply with demands.

Internet access is another essential part of the business. Authorities have tried cutting electricity and fiber connections to border compounds. Operators have responded by switching to satellite internet, which connects through terminals rather than relying on the same ground cables.

Investigators have documented satellite terminals keeping compounds connected after raids or utility cuts. Lawmakers in the United States have pressed providers to block service to facilities known for trafficking and online fraud.

Thailand has attempted to restrict compounds near its border by cutting electricity, fuel and internet access. Operators adapted with satellite links and new supply routes. After a prominent border crackdown that cut utilities and freed thousands of people, construction crews returned, new structures appeared and satellite dishes were installed.

Following the money and its protectors

Fraud proceeds move through cryptocurrency exchanges, stablecoins, digital banks and money mule networks. Stablecoins are digital tokens designed to track a reference value, often a currency. Money mules move funds through accounts on behalf of others, helping conceal who controls the money.

Blockchain specialists have exposed large service networks moving billions of dollars for these syndicates. Holding companies and brokers inside special economic zones sell financial services to criminal groups, allowing them to convert funds and withdraw money quickly with minimal checks.

Criminal organizers also seek status and political protection. Individuals linked to major networks have held advisory roles and developed relationships with powerful families. In October, the United States announced sweeping sanctions and indictments against a Cambodian conglomerate alleged to run vast scam operations.

Prosecutors in a related case moved to seize nearly $15 billion in cryptocurrency, one of the largest forfeiture actions on record. Forfeiture is the legal process through which authorities seek to take assets linked to crime.

A Thai deputy finance minister stepped down after questions about contacts with operators in Cambodia, a claim he denied. In the Philippines, a former mayor who oversaw a large compound was sentenced to life imprisonment. In Myanmar, parts of the scam business help fund armed groups controlling territory.

Analysts warn that criminal income can become a pillar of local economies, blurring the boundary between public authority and private rackets. Financial services, property, protection and political relationships allow large compounds to operate openly and survive disruption.

Why national action needs cooperation

Criminal organizers plan for raids. Managers and workers can scatter to nearby sites or move across borders when a compound is targeted. The return of building crews and appearance of satellite dishes after crackdowns show how quickly operations can replace damaged infrastructure.

The Association of Southeast Asian Nations provides a forum for cooperation, rather than a police force with authority above national governments. Its members vary in their ability and willingness to act. Civil conflict, corruption and limited resources complicate enforcement in some countries.

Singapore has passed laws making it easier to freeze suspicious transfers, pursue money mules and block malicious calls. Those measures target the movement of money and contact with victims, alongside action against the physical sites where fraud is organized.

The combined pattern is visible at Myanmar's border: cutting supplies can interrupt a compound, but alternative connections and routes allow it to resume or relocate. Sustained action has to reach the people financing and protecting the operation, as well as the building where workers are confined.

Four parts of a sustained response

A response centered on victims needs four connected tracks: protection and rescue, financial action, accountability for service providers, and investigations that cross borders. Each addresses a different part of the same business.

Countries where workers are recruited should expand safe labor migration channels and staff hotlines for job scams. Border units need authority to identify trafficking victims inside compounds rather than simply arresting them for fraud. Survivors need medical treatment, travel documents, debt relief and secure return programs.

Law enforcement and financial regulators should press exchanges, payment processors and market makers to freeze wallets linked to known networks. Market makers help keep assets trading by buying and selling them. Strong checks on customers and monitoring of services that convert digital funds into spendable money are especially relevant around special economic zones. Banks should be able to reverse suspicious transfers quickly and interrupt romance investment scams before funds settle.

Satellite internet providers, data centers, domain hosts, messaging platforms and telecommunications carriers should cut service to known compounds and block websites imitating investment businesses. Sharing verified lists of sites would support that work. Special economic zones should disclose who owns facilities and who rents them.

Police need shared intelligence systems, joint teams and fast channels with INTERPOL to track recruiters, intermediaries and financial controllers across borders. Sanctions and asset seizures should reach front companies, professional service providers, property owners and fixers supporting the compounds.

Progress across all four tracks would change the costs of running the business: fewer people could be forced into its workforce, moving money would become harder, and protection by powerful figures would become less secure.

Warning signs for investors and job seekers

Scam scripts are polished, but their demands often reveal the trap. A stranger's friendship becomes an investment pitch, an apparent profit becomes a demand for more fees, or an overseas job requires surrendering control of documents and money.

People approached online or offered work abroad should pause and verify when they encounter these warning signs:

• Unsolicited messages on WhatsApp, Telegram or dating apps that steer toward investments.
• A sudden friendship that becomes personal quickly and moves conversations off the original platform.
• A contact who avoids video calls at key moments, or video in which sound and movement seem out of sync.
• Claims of inside access to cryptocurrency opportunities or arbitrage available for a limited time. Arbitrage means trying to profit from price differences between markets.
• A professional looking website or app with no clear company registration or license.
• Blocked withdrawals unless new fees or taxes are paid.
• Pressure to hide an investment from family members or bank staff.
• Requests to send money to accounts belonging to other people, gift cards or cryptocurrency wallets.
• An overseas job offer requiring fees in advance or surrender of a passport.
• A demand to install tools that give someone remote access to a phone or computer.

Anyone who suspects a scam should stop transferring money, take screenshots, preserve records and contact their bank and local police. Asking a trusted friend to review the exchange can help. Legitimate investments should not require secrecy or pressure.

What to Know

• KK Park was demolished after operators had moved, while thousands of people believed to have been trafficked were unaccounted for.
• Fraud compounds exploit both people whose savings are stolen and workers forced to deceive them.
• Mekong operations were estimated to generate $44 billion annually by late 2024; worldwide estimates exceed $70 billion.
• INTERPOL documented trafficking victims from more than 60 countries, with nearly three quarters directed to Southeast Asia.
• AI, deepfakes, imitation websites, satellite internet and cryptocurrency help networks scale fraud and survive disruption.
• Political protection, financial services and armed groups connect the business to local economies and power.
• Effective action requires survivor protection, financial restrictions, accountability for enablers and police cooperation across borders.