The U.S. Treasury recently announced a sanctions program against Myanmar and Cambodia, which the U.S. has accused of being scam centers that have defrauded victims out of billions of dollars. According to estimates from the department, nearly $10 billion has been lost through those fraudulent activities, which are often operated by trafficked labor.

The Office of Foreign Assets Control (OFAC) under the Department of the Treasury revealed that among the sanctioned targets, nine are located in Shwe Kokko, Myanmar, which has become a hub for online scams. Additionally, ten entities are related to scam activities in Cambodia.

John K Hurley, the head of the Terrorism and Financial Intelligence at the Treasury Department, pointed out that the threats posed by these networks are dual-faceted. On one hand, cybercrime in Southeast Asia endangers the welfare and financial security of Americans, while on the other hand, thousands of people fall into modern slavery as a result. These losses have increased by 66% compared to last year and are now approaching $10 billion.

U.S. Secretary of State Marco Rubio stated that these measures are aimed at protecting Americans from industrial-scale fraud, forced labor, and physical and mental abuse. He acknowledged that criminal organizations in Southeast Asia are increasingly targeting and exploiting U.S. citizens and other foreign victims through online fraud.

Sanctions target individuals linked to the Karen National Army (KNA), an ethnic armed group that collaborates with the Myanmar military. The U.S. has stated that the KNA benefits from the scam base in Shwe Kokko, leading to sanctions against its leaders Saw Chit Thu, his deputy Tin Win, and Saw Min Min Oo. The sanctioned companies include Chit Linn Myaing Company, Chit Linn Myaing Toyota Company, Chit Linn Myaing Mining and Industry Company, and Shwe Myint Thaung Yinn Industry & Manufacturing Company.

The United States has also sanctioned a Chinese businessman She Zhijiang and his companies Yatai International Holdings Group and Myanmar Yatai International Holding Group. Zhijiang and the leaders of KNA are accused of developing the Yatai New City complex in Shwe Kokko, which is associated with gambling, drug trafficking, prostitution, and fraud activities. Victims have stated that they were lured here by false job opportunities, detained, forced to commit online fraud, and even suffered beatings and sexual assault.

In Cambodia, the sanctions target four individuals and six entities who are accused of operating scam zones disguised as casinos, hotels, and office complexes, particularly in Sihanoukville and Bavet. The accused individuals include Dong Lecheng, Xu Aimin, Chen AI Len, and Su Liansheng. The business entities associated with these individuals include TC Capital, KB Hotel, KBX Investment, Heng He Bavet, MDS Heng He, and HH Bank.

OFAC revealed that these facilities were initially built by Chinese investors as casinos, but later became centers for cryptocurrency investment scams, often operated by victims who had been trafficked. In Sihanoukville and Sun Sky Casino, victims were beaten and forced to carry out online scams, and money laundering was conducted through the casinos. In Bavet, Chen AI Len and Su Liansheng were reported to have connections with Heng He Casino and other assets used for similar schemes.

The sanctions this time continue the actions against online fraud in the region that began in May, targeting the Karen National Army, designated as a transnational criminal organization, whose leaders and their families are all sanctioned. According to a report by The Cryptopolitan, these sanctions were issued under Executive Orders 13581 and 14014, blocking all assets related to the KNA and its leaders with the United States, prohibiting all Americans from engaging in related business transactions. The Huione Group has been identified as a financial platform for laundering fraud proceeds. Therefore, all properties and interests of individuals related to the U.S. jurisdiction will be completely frozen.

The Ministry of Finance stated that the sanctions were issued based on the enforcement orders of multiple authorities, targeting transnational criminal organizations, malicious cyber-driven activities, human rights violations, and actions that threaten the stability of Myanmar.