Inside Southeast Asia’s Most Notorious Crime Hub

Published Aug 19, 2024, 10:59 PM

A Chinese businessman persuaded officials to establish a special economic zone in a remote part of Laos. The gamblers arrived first. Then came the drug runners, human traffickers and scammers.

On today’s Big Take Asia podcast, host K. Oanh Ha speaks with Bloomberg Businessweek editor Matt Campbell about his investigation into the Golden Triangle Special Economic Zone and how it became a criminal’s paradise.

Read more: Dodge City

Watch, from Bloomberg Originals: How One Man Rules in Asia's Golden Triangle

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On the banks of the Mekong River and Laos there's a startling site. After traveling through small plantations of coffee and bananas, a winding road descends into what looks like a city emerging from the jungle.

It completely stands out.

Matt Campbell is Asia editor for Bloomberg BusinessWeek.

There are really tall buildings, huge skyscrapers. There is a big shopping complex. You can hear music and see neon light shows.

At night.

A spectacular fountain show plays in the middle of an open plaza. Choreographed jets of water dance in sync with Chinese music and neon spotlights. In the area around it, there's an artificial lake and nearby a large casino. But amid this seemingly gleaming new city, there are allegations that something much more sinister is taking place here.

Yeah, they keep my passport when I arrived for the first time in the laws LAMB.

We're calling this woman City and we've altered her voice due to safety concerns. City says she was trafficked to work in what's believed to be a fast growing type of business in this area of LAOS known as the Golden Triangle Special Economic Zone. She says she was forced to work in a scam center here, duping people for money.

I become a scamera and they teach me how to become a scamera.

And city is believed to be one of many by the estimates that have been made, and of course they are.

Estimates because to some extent this is unknowable, tens of thousands of people working in the scam business and the Special Economic Zone.

The US Treasury Department has imposed sanctions on what it says is a criminal organization that runs this area, and the United Nations Office on Drugs and Crime has identified the zone as a nexus of money laundering, but the sanctions have had no obvious impact on the zone's expansion, and LAO leaders have never taken action against the chairman of the zone, a Chinese businessman named Joo Wi. Welcome to the Big Tach Asia from Bloomberg News. I'm wanh. Every week we take you inside some of the world's biggest and most powerful economies and the markets, tycoons and businesses that drive this ever shifting region. Today on the show Inside the Golden Triangle Special Economic Zone, how a hub created for economic development, became a hive of criminal activity and why authorities don't seem interested in stopping it. The Golden Triangle Special Economic Zone in Laos has been a notorious drug smuggling passageway for about a decade, but beginning around twenty twenty two, in the midst of COVID, police and diplomats in Southeast Asia took note of what appeared to be a major new business here in this part of Laos.

Crypto scam centers places where workers, many of them who trafficked and held against their will, spend their time trying to befriend people online and persuading those people, generally in rich countries so US, Western Europe to some extent China, to make scam investments where they then lose all their money.

One former scam center worker that Matt spoke to was a woman we're calling City. She's a young Indonesian who says she was trafficked to work there.

She had a very typical experience in that she answered a job ad on Facebook. In her case, it was to work doing computer graphics, which matched quite well with her skills. She was told the job would be in Thailand, but in fact she ended up in Llows, in a building that was like a prison and where she was forced to work against her will, scanning people in the United States.

They pay for everything until I arrived in Laos, but after that everything chants. They lock us, all of us inside.

Matt says. City told him she had to surrender her passport and she couldn't leave the building without an access card. She was allowed to keep her phone, but her managers would routinely go through her messages. Siddy says she was taught to run the scams like this.

I need to have set story for middle guy in online chatting, then I get the customer trust.

Often the initial contact is made on dating sites, so someone who's actually in a fluorescent lit office in the special economic zone is posing as a young single woman who's living somewhere in the US, stringing along generally a man who they're talking to.

I have a toolplace is a California and another one is Virginia. Then I say like, yeah, I'm very set woman, and then I will say I also don't have husband. That's why I come to looking. Maybe I have a lacking things for nit a guy in this online day thing.

And the way this works is called pig butchering, and the metaphor it's a bit inelegant, is that you're fattening a pig and then you eventually slaughter it. And the fattening the pig is building trust, building a relationship with these online marks, and gradually and without pushing too hard, convincing this quote unquote customer to make investments in generally crypto, and like all the best scams, these ones pay off.

At first it's real probate, like one thousand, two thousand. Then after that you put more until you put all of your money, and then after a very big because they.

Move in for the kill, butchering the pig if you like, and then maybe you put in your whole life savings. You put it onto a crypto platform that is controlled by the scam center, and that money disappears booth it's gone.

City and several other scam center employees told Matt there were consequences if the workers failed to get enough customers.

They are punished severely with things like beatings or electric shocks.

One off, China, Smaan didn't get the customer after I'm not sure how many loans, and they watch him with Oh way.

So you saw this man being wept.

Yeah, until the blood everywhere. They put this guy in front of the levator for so us. This is Funny's funey you will get if you didn't allow our rules.

City was desperate to get out, but the place was heavily guarded, and she says she didn't know who to trust.

I see also one time someone tried to run out from the building and he get the electric show. At three am. He get the electric show. I say, why still, this is not human So he said if you try, if you still want to go out, they will kill you.

Scam Centers like this one city worked in are incredibly lucrative businesses in this unique special economic zone in laos as mad and As College Pitcha Taneka Simpipat highlighted in their investigation. A recent report by the United States Institute of Peace, a Congress funded research institution, estimated that the amount stolen by scam centers in Maycon countries likely exceeds forty three billion dollars a year. That total includes considerable losses in the US and Europe, as well as China. So who is behind this alleged criminal enterprise.

The founder and the face of this project is a Chinese businessman named Chiao Wi.

Totally, I am well, it's not a great thing that the Golden Triangle has a terrible reputation.

Chiao Wei portrays himself as a kind of kindly godfather who is bringing development to allows in a somewhat paternalistic way. There is a lot of talk about helping the Lao people better themselves, helping them tap the prosperity of China, bringing them out of poverty.

People used to say that you'd lose a kidney in the Golden Triangle, but actually this place is peaceful.

Here, Jou Wai is speaking to several media outlets in a YouTube video posted earlier.

This year, because we are here to promote tourism to boost the economy. Now, through our joint efforts, we're turning this place into a region that is developed economically and financially in all aspects.

After the break, how did Jowwei come to run this place? And if the Golden Triangles Special Economic Zone really is a hub of criminal activity, why is he still in charge. The Golden Triangle Special Economic Zone was the brainchild of a Chinese businessman named chiao Wei.

He's from the far northeast of China in halong Jiang, which is a very cold, larshly rural province. He left school for his teenage years, ended up working various sort of odd jobs, and somehow in the nineties ended up in the casino business in Macau, just next to Hong Kong.

Jaoo built a large casino business in the Asian gambling capital, and then when the market got crowded in Macau, he moved the operations in the mid two thousands to Southeast Asia, to less regulated places like me and Mar and eventually Laos. And it was in Laos, this small landlocked country sandwiched between Thailand and Vietnam, where Joo developed close relationships with decision makers in the country. In two thousand and six, he struck up a deal with allow government to set up this special economic zone, which he said would bring growth and prosperity to the country.

When this was beginning, the pitch to the local population was more or less that this is going to be great for you. This is going to bring a lot of development. There are going to be jobs, and you will benefit.

The government entrusted thirty nine square miles and control of the project at Jow by granting him a ninety nine year lease that gave him de facto control over the city. He started with building a gambling palace and from there it's grown into what's become a small city and effectively a fortress for Joo himself.

He's in charge. Lao law may theoretically apply, but in practice law enforcement regulation that's all up to the Special Economic Zones managers, namely Johwet and his Liltuture tenants. Lao police have not been able to enter accept with permission of management. So it was almost like a little empire within a sovereign country in which Jahwei and his colleagues had just about complete control, and they appear to continue to enjoy that status.

And as a special Economic zone grew and more money poured in, it didn't take long for law enforcement agencies in the US and Thailand to suspect that more was going on beneath the surface.

Within a few years of Jahwe setting up this place beginning construction, law enforcement officials in the region were getting reports that large amounts of methamphetamine were being trafficked through the site.

In twenty eighteen, the US Treasury Department slapped sanctions on what it called the Jauwei transnational criminal Organization. It said the Special Economic Zone was a hub for the trafficking of drugs, people, and wildlife, as well as money laundering and bribery, and more recently, the Special Economic Zone has diversified into hosting scam centers. Joo said in the past that drugs and the trafficking of drugs and people are prohibited in the zone, and that quote, we definitely do not allow scamming. The Golden Triangle's Special Economic Zone management didn't respond to Bloomberg's detailed request for comment from Joo. Lao government officials also didn't respond to requests for comment on this story. After Bloomberg sent inquiries, Lao State Media reported that the government had ordered the removal of scam centers in the Special Economic Zone by late August. State media said the shutdown ordered on the scam centers came after a meeting between Jow and high ranking officials from the Lao Ministry of Public Security as well as the governor of the Lao province where the Economic Zone is located. But Matt says it's it's unclear how or whether such an order will be enforced, and he says despite the allegations of crimes from international authorities, there wasn't much law enforcement action from Laos before this latest announcement on state media, and.

The reason for that is simple. The Lao government is actually an investor in the project. The Lao government, when the special economic zone was created, took a twenty percent stake in the project. We don't know if it's still a twenty percent stake. There is some indication the stake may actually have gone up. Johwet is in business with the Lao government in this project.

But the crimes alleged to be happening in the Golden Triangle Economic Zone aren't just problems for the Lao government. The vast majority of the alleged scam victims are from the US, Europe and China, and in recent months, Lao authorities, presumably at the urging of the Chinese government, have arrested more than one thousand Chinese citizens who were allegedly working inside scam operations in the economic zone. They were deported back to their home country, and last year, according to the US Institute of Peace, these scam operations across Southeast Asia together stole more than three point five billion dollars from Americans. So why hasn't the US taken further action?

Even if you are the TEA or the FBI, or one of these American law enforcement agencies which have global reach, at least on a good day, you are still constrained by sovereignty.

Meaning there's only so much you can do about alleged crime that's happening in another country, even when it's reportedly targeting your citizens.

The specially economic zone is in Laos. The Lao government doesn't appear to have a problem with it.

Joo himself hasn't been charged with any crime, but he does appear to be.

Careful as we know, he certainly is not traveling anywhere where he could be subject to US extradition request.

And as for the young woman we're calling city, the Indonesian worker Matt talked to, who said she was forcefully held inside a scam center in the economic zone. She did eventually find a way out two months after her rival in Laos City saw her chance.

The way she escaped in her account is that she was taken across the river into Thailand to renew her permission to work in Laos and took the opportunity at that point to make a run for.

It because understanding us, they didn't go with us. They just sending us alone. But there they have someone, but we didn't know who is the person who's waiting for us. There.

When she was taken over the border into Thailand to renew her visa, she saw a moment when it seemed like nobody was watching and jumped into attack that got her to the airport in chang Rai in northern Thailand.

I'm telling the taxi guy like please us helping me. I want to go to airport. Then they follow me until to the airport. The two guys, the big one, they're looking for me and I hiding in a counter.

In City's case, she made it to the airport in chiang Rai, She says she actually ended up hiding in a simcard shop behind the counter while she waited for a flight that a friend had booked for her online. And then she made it out and eventually back to Indonesia, her home country.

City says she was lucky she's the only one who took off on that visa run to Thailand, but Matt says countless other traffic labors are still trapped, forced to work at the scam centers like the one city escaped from. This is The Big Take Asia from Bloomberg News.

I'm wan ha.

This episode was produced by Naomi Um Young Young, Jessica Beck, and Thomas lou who also fact checked it. It was mixed by Blake Maples. It was edited by Jeremy Keene and Caitlin Kenny. There was additional reporting from Papita tanaka Simpipot, and we'd like to give a special shout out to Bloomberg's Originals team. Our senior editor is Elizabeth Ponso, Nicole Beemster Bower is our executive producer, and Sage Bouman is Bloomberg's head of Podcasts. Please follow and review The Big Take Asia wherever you listen to podcasts. It helps new listeners find the show. See you next time.

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