Myanmar military ‘protected $14bn scam hub’

Four families ran huge criminal empires in town captured by anti-junta forces, says rebel commander

PUBLISHED : 6 JAN 2024 AT 14:50

WRITER: POST REPORTERS

Laukkai, the town in northern Shan state where thousands of people worked in online scam centres run by criminal syndicates, was captured this week by rebel …

forces following weeks of fierce fighting with Myanmar junta troops. (Photo: David and Jessie Cowhig via Wikimedia
| Commons)

The online scam syndicates operating near the Chinese border in northern
Shan State were taking in $14 billion a year and were run by four families
protected by the Myanmar military, says the commander of an ethnic army
fighting to take control of the region.
The revelation was made by Peng Deren, the leader of the Myanmar National
Democratic Alliance Army (MNDAA), in a New Year’s message to supporters,
and reported by The Irrawaddy, an independent news service in Myanmar.

Rebel groups collectively known as the Three Brotherhood Alliance this week
gained control of Laukkai, the main town in Kokang region and the hub of the
scam operations, following weeks of fierce fighting with junta troops, the
alliance and the junta said. Hundreds of junta officers and troops are
reported to have surrendered.
 More than 500 Thais who had been working at the scam centres in Laukkai,
also known as Laukkaing, have been rescued and repatriated in recent weeks
during lulls in the fighting. Thai authorities say they have determined that 174
of them were victims of human trafficking.

Four “big families” ran hundreds of online scams that together had as many
as 100,000 people working for them in Laukkai before it was attacked by the
Brotherhood Alliance, The Irrawaddy quoted Peng as saying.

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Most of the employees of the centres were Chinese or spoke the language as
the scams were aimed mainly at Chinese people, who have been bilked out
of billions of dollars.

Under pressure from Beijing to crack down on the operations, Myanmar

authorities in recent months have stepped up arrests and deportations. Some
41,000 suspects were handed over to China last year, Chinese media said
this week.

Crime kingpins rescued

But the Myanmar military used helicopters to rescue the leaders of the crime
syndicates from the town when it was attacked, Peng said.

The MNDAA is one of three ethnic armies that comprise the Brotherhood
Alliance. They launched Operation 1027 on Oct 27 last year to drive junta
troops out of northern Shan State.
The four families who run the syndicates are protected by the junta, Peng
said, referring to the Bai, Wei and two Liu clans.

Their patriarchs are Bai Suocheng, former chairman of the Kokang Special
Autonomous Zone; Kokang Border Guard Force leader Wei San; Liu Guoxi, a
former lawmaker from the military-backed Union Solidarity and Development
Party; and Liu Zhengxiang, the richest man in Laukkai.

Myanmar’s military and the four families have been engaged in industrial-
scale drug production and cyber crimes in Kokang since 2009, turning it into
a hub for cyber crime, Peng said.
The Brotherhood Alliance included eliminating online scam syndicates as a
goal of Operation 1027, along with defeating the military regime.

In response to Peng’s allegation, pro-junta newspapers denied that online

scam syndicate leaders had been rescued from Laukkai by Myanmar military
helicopters, saying the allegation was misinformation.

However, prior to Peng’s allegation, reports said that leading Kokang

businessmen were rescued from Kokang and transported to Nay Pyi Taw, the
capital, during Operation 1027.

Thailand worried

Amid the massive crackdown in Laukkai, Lt Gen Jakkapong Janpengpen, joint

operations director of the Royal Thai Army, met with Myanmar junta leader
Min Aung Hlaing in Nay Pyi Taw on Dec 27.

The meeting took place amid concerns that online scam syndicates from
northern Shan State would relocate to the Myanmar-Thai border opposite Tak
province.

The Liu and Bai clans reportedly have casinos and facilities housing scam
syndicates near Myawaddy in Karen State, where the junta-aligned Karen
Border Force is active, as well as in Cambodia, The Irrawaddy reported.

Two Chinese-invested “new city projects” — KK Park and Shwe Kokko —

located to the south and north of Myawaddy, are notorious hubs for online
gambling, cyber scams and human trafficking.

Peng said the junta is still protecting KK Park, describing it as the largest
cyber fraud centre in Southeast Asia.