�鶹

BEIJING: Tens of thousands of Chinese nationals involved in scam operations have been deported from Southeast Asia in recent years.

But upon returning home, some have resumed their old activities – this time targeting foreign victims.

Chinese authorities have warned that scams remain illegal regardless of where the victims are.

Yet experts say some groups continue to adopt more sophisticated cross-border schemes, undermining law enforcement efforts.

"FOREIGNER-BUTCHERING" SCAMS

A report by Chinese state broadcaster CCTV in February highlighted a case in Cao County, eastern Shandong province, where police dismantled a syndicate running what locals call “foreigner-butchering” scams.

These schemes mirror those seen in scam compounds across Southeast Asia.

In the report, one alleged scammer confessed: “I wasn’t thinking straight at the time. I figured that as long as we didn’t scam Chinese people and only scammed foreigners, no one would care.”

Operated by well-organised criminal groups, scammers pose as wealthy or attractive individuals on platforms such as Facebook and Instagram – which are banned in China – before shifting conversations to chat apps.

With the aid of translation tools and scripted dialogue, scammers cultivate trust, build relationships and eventually lure victims into bogus investment schemes.

CRYPTO "OPPORTUNITIES"

Most of these cases involve scammers promoting supposed cryptocurrency investment opportunities with promises of high returns.

Victims are urged to invest more, but once substantial sums are deposited, the scammers shut down the platforms and disappear.

In one case targeting Indian nationals, more than 66,000 victims lost more than US$5 million.

State news outlets say some groups tapped their overseas networks or used know-how they picked up abroad to set up local scam operations targeting foreigners.

The rise in crypto-related scams targeting non-Chinese victims comes as countries like the United States, Britain, Australia and Japan report a surge in cases involving their own citizens.

PIVOT SPURRED BY CRACKDOWNS IN CHINA

Jason Tower, a senior expert with the Global Initiative Against Transnational Organized Crime – a research institute focused on organised crime – said the shift toward foreign targets began as China ramped up its crackdowns on online scams in 2021, and again in 2023.

Speaking to �鶹’s East Asia Tonight, Tower said that China has repatriated over 100,000 people from Southeast Asia over the last two years. Many of them have since struggled to find jobs due to their criminal records, making them easy recruits for scam organisations. 

“So you are seeing that more and more of these foreigner-butchering syndicates are being set up across cities all across the country,” he said.

PATRIOTISM AS A RECRUITMENT TOOL

To recruit for their operations, syndicates have also begun openly promoting the idea that scamming foreigners is acceptable, even patriotic, Tower said.

“You've seen influencers post videos about this … where they talk about patriotic scamming,” he added.

Some groups claim that “scamming foreigners is not a crime, and that they won't be prosecuted if they focus on foreign targets”.

Tower said the trend has grown serious enough that Chinese police have launched public education campaigns to counter it. 

“Basically, they're educating the Chinese public that scamming foreigners is also a crime,” he added.

A COMPLEX CROSS-BORDER GAME

The international nature of scam networks has also made prosecutions significantly harder, Tower noted.

He cited cases where a Chinese-led scam syndicate operating in Myanmar trafficked individuals from Indonesia who were then deployed to scam victims in Malaysia.

“It requires cooperation across law enforcement, sometimes from four or five countries, to deal with these problems,” he said. 

These syndicates have developed “sophisticated” techniques from perpetrating scams across China, and are now “weaponising that to target the rest of the globe”.

"SCAMDEMIC" IN THE US

The US has intensified enforcement actions in response to ballooning scam losses.

Officials estimate that Americans lost about US$10 billion to such scams in 2024, a 66 per cent increase from the previous year.

Washington has framed the surge in crypto-investment fraud as a national security concern, with one US attorney calling the crisis a “scamdemic … a generational wealth transfer from Main Street USA to the hands of Chinese organised crime”.

In November, the country launched a Scam Center Strike Force, an inter-agency initiative focused on combating scam networks operating in Southeast Asia that target Americans.

While enforcement agencies point to transnational criminal ecosystems, some analysts warn against politicising the issue or framing it as a geopolitical confrontation with China.

Tower, however, said the scam issue risks becoming a “flashpoint” in already strained US-China relations.

“You have China-linked crime groups that are running amok across the region … that increasingly are making scamming money, stealing money from Americans, their top priority.”

Drawing parallels with the fentanyl crisis – an issue that has strained US ties with China over the supply of precursor chemicals – Tower noted that there are precedents for cooperation.

Both countries have set up a joint working group to start addressing some of the challenges around fentanyl, and a similar mechanism for online fraud could improve cross-border investigations.

US law enforcement needs to have good evidence and information about what is happening, especially in tracing money flows, Tower added.

“If things continue at this trend …  losses for the US are going to become astronomical in a few years.”