Full of online fraud activities: The Golden Triangle Special Economic Zone at Mekong river in the north of Laos
David Hutt, a research fellow at the Central European Institute of Asian Studies (CEIAS), analyzes on rfa.org, what happened lately in the Golden Triangle Special Economic Zone in the north of Laos. Since August hundreds of people have been arrested due to their involvement in online fraud activities. Hutt writes that in Cambodia and Myanmar scamming tends to be geographically dispersed with compounds across the country and controlled by different syndicates. In Laos the industry was, until very recently, almost entirely centered in the Golden Triangle Special Economic Zone, an autonomous area long notorious for organized crime and run by the Chinese casino mogul Zhao Wei and his Kings Roman Group, which has close ties to organized crime.
David Hutt argues, that Zhao Wei and his associates had established laundering trails to China and Myanmar years earlier, it meant that, unlike in Cambodia, most of the revenue from the scam industry immediately left Laos. This limited the amount of money needing to be recycled or laundered through local conglomerates, thus reducing the sums needed to corrupt Laotian officials, politicians, and tycoons. Hutt thinks that officials, especially those outside Bokeo province where the SEZ is located, weren’t contaminated by scam money, so they were not interested in protecting the racket. This makes it easier to conteract the scam industry. In May, the Lao government reshuffled the leadership of Bokeo province, according to Hutt ostensibly to clean out officials who had been bought off.
Then there is the Chinese Communist Party, which wants to crack down on the scam industry in Southeast Asia after many Chinese people have been victims of fraud activities. The Laotian government, which relies almost entirely on Chinese investment for economic growth and on Chinese debt, "cannot say no when Beijing orders it to move on the scammers", Hutt comments. The raids on the Golden Triangle SEZ came just weeks after Chinese foreign minister Wang Yi visited Vientiane.
But Hutt thinks, that the Laotian government wants to push Zhao Wei and his associates enough for some smaller operators to flee the country, but not enough that the Golden Triangle SEZ collapses. Hutt points to the fact, that in Laos the online scam sector could be worth as much as the equivalent of 40 percent of the formal economy (according to a United States Institute of Peace report earlier this year). It is estimated that criminal gangs could be holding as many as 85,000 workers in slave-like conditions in compounds in Laos.
In a coordinated operation, authorities have dismantled telecommunications fraud operations within the Golden Triangle Special Economic Zone (GTSEZ), arresting 771 individuals. The action was carried out on 12 August, as The Laotian Times reported. Security forces from Laos and China were involved. Among those detained were 282 women and 489 men from 15 different nationalities. The group comprised 275 Lao nationals, 231 people from Myanmar, and 106 Chinese nationals. Additionally, the detainees included 73 people from the Philippines, 29 from India and 20 from Indonesia. There were also six individuals from Mozambique, 11 from Ethiopia, and six from Uganda. The remaining detainees were from Vietnam, Tunisia, Colombia, Georgia, and Burundi, among others. The operation was led by Anousin Sackpaseuth, head of Bokeo Public Security.
Also in August Laos authorities issued an ultimatum to Golden Triangle Scam Operators to vacate the Special Economic Zone, as The Diplomat reports. According to Radio Free Asia the issue was discussed at an August 9 meeting between the governor of Bokeo province, high-ranking officials from the Lao Ministry of Public Security, and Zhao Wei, the chairman of the GTSEZ. Under the eyes of Zhao Weis security the fraud acitivites at the Special Economic Zone had been developped. The order to evacuate came a week after Lao authorities raided several call centers in the Golden Triangle SEZ, detaining and deporting 154 Vietnamese and 29 Chinese for their alleged involvement in the scams.
In late 2022, the South China Morning Post had reported that the GTSEZ contained “a number of prison-like call centers for online scams.” According to RFA a Lao official now said that “as many as 400 call centers were operating in the Golden Triangle SEZ, up from 305 a year earlier.” The scam centers have mostly targeted Chinese people, what led authorities in China to pressure their counterparts in Laos to act against these acitvitities. And according to Chinese officials the problem is even bigger: Police in Zhejiang investigated online fraud cases and traced perpetrators to GTSEZ. "In investigating Hongyu, police found numerous other fraud parks in the area, identifying 40,000+ ppl engaged in fraud in the area involving 1,029 companies", CyberScamMonitor reported on X.
When the deadline this august hat passed, Lao authorities raided more Golden Triangle scam centers, as RFA reports, arresting 60 Lao and Chinese nationals
LAOS: Authorities raid more scam operations in Golden Triangle SEZ, arresting 60 Lao & Chinese nationals one day after government-imposed deadline for illegal call centers to close. 250 police officers & officials participated in raids on 16 locations. https://t.co/kT7NC4yb0p
What happens now at the Golden Triangle Special Econmic Zone? The owner of a guesthouse said to RFA: “The SEZ will be empty – the hotels, guesthouses and restaurants will have no customers.” Zhao Weis Kings Romans Casino remained open. But nearby buildings appeares to be empty, according to a Lao worker. “It looks very quiet these days, since the beginning of the operation,” he said. “The police force has checked all the buildings.”
And where did the online fraudsters go? Some fled to Chiang Rai, a Thai border security source said according to Bangkok Post. Many online scam gangs also moved their base to Myanmar and Cambodia, the source added. And Jason Tower, Myanmar Country Director at United States Institute of Peace, states on X, that the criminal kingpins were tipped off in advance, many moving to Myawaddy in Myanmar.
Once upon a time there was just a casino with a golden crown, that could be seen from Thailand across the Mekong river in Laos (picture from March 2017):
Today there is a city full of highrise buildings with signs in Chinese (video taken in 2023):
In the least populous province Bokoeo the tallest highrise building of Laos will soon dominate the bank of Mekong river: The new hotel will count 32 floors and be 146 meters high. And it is just one of several highrise complexes, which are growing along the river: Laos Xinyue City Center (鑫越城市中心项目) is the name of this project, constructed by Shanghai Baoye as general contractor. The residential section of the project is composed of 4 high-rise buildings, which are 92 to 97 meters high.
The project of Powerchina is located in the Golden Triangle Special Economic Zone (金三角经济特区) in Tonpheung. It is just the newest example of a construction boom, that has transformed the formerly rural area in the North of Laos, where the borders of Laos, Thailand and Myanmar meet, into a city. For millions of US-Dollars Bokeo International airport (博胶国际机场) and Golden Dragon Mountain International Golf Resort (金龙山国际高尔夫度假村) have been added lately.
The mastermind behind this development is Zhao Wei (趙偉, 70), a native of China's Heilongjiang province, now Chairman of the administration of the Golden Triangle Special Economic Zone. The businessman initiated this zone in 2007 having won a 99-year lease covering a vast area of 3,000 hectares from the Lao government. Before setting up in Laos Zhao Wei was a timber merchant and operated casinos in Macao and in Mong La, a town on the border between China's Yunnan province and a rebel-controlled area in Myanmar. The casino in Mong La operated under the name Blue Shield Entertainment mainly for customers from China, where gambling is prohibited. It got frequented by many Chinese officials, what led China to pressure Zhao Wei for closing this operation. Therefore he transfered his activities to Laos, where he invested under the name of Golden Kapok Group 金木棉集团 and built the Blue Shield Casino (蓝盾娱乐), also known als Kings Romans Casino.
The Kapok Star Hotel
Around this casino high rise buildings went up in the last years. The most prominent one is Kapok Star Hotel (木棉之星酒店), illuminated every night in spectacular colours. There are more hotels, shops and entertainment venues. Meanwhile everything in this special econonomic zone in Laos is Chinese: People spend yuan, speak Mandarin, vehicle license plate numbers are written in Chinese, signboards are written in Chinese and people may travel there visa-free from China. And if you look on Facebook and Instagram many young asian woman are presenting themselves: Prostitution and drugs are widespread in the special economic zone - although forbidden in Laos. And last year it got more and more obvious, that the Golden Triangle Special Economic Zone has become a hotspot for online fraud and human trafficking. Many people, who were lured with high-paying job offers, told the police and the media in China, Thailand, Malaysia, South Korea and other countries, how they were forced to work as online fraudsters, cheating internet users in many Asian countries and even were tortured, when they did not reach the fraud goals. In November 2023 the government of South Korea imposed a travel ban to the Golden Triangle Special Economic Zone to prevent citizens from becoming victims of fraud crime.
Enormous building activites along Mekong river
The facebook accounts of the Golden Triangle Special Economic Zone did not talk about online fraud for a long time. And Zhao Wei's own security force seemed not to intervene against the illegal activities. Lao officials - for example the Prime Minister - frequently visited the zone and seemed to be backing everything, what happened there. This changed dramatically at the end of the year 2023 and the beginning of the year 2024. Chinese law enforcement officers of the Ministry of Public Security travelled to Laos. Together with Lao police forces they arrested 462 online fraud suspects in December and 154 people on January 21. Later followed more raids and another 114 suspects were caught. And on February 28 Chinese media reported: "268 criminal suspects who committed cross-border telecommunications network fraud were handed over to us." The handover took place in January at Bokeo international airport. The Lao Ministry of Public Security confirmed to Radio Free Asia that the suspects were arrested in the Golden Triangle Special Economic Zone.
The Golden Triangle Special Economic Zone was not the only target of Chinas Ministry of Public Security.Similar operations were conducted in Myanmar, Cambodia, The Philippines and the United Arab Emirates. China is pushing hard against the scammers. In 2023, Chinese courts dealt with 31,000 telecom fraud cases (up 48%), sentenced 64,000 (up 39%). Incidence of cases of assisting online criminal activities also increased significantly, as the Vice President of Supreme People’s Court said.
And what is Casino tycoon Zhao Wei doing now? On February 26 he smiled broadly at his Kapok Star Hotel, where the Lao Central Committee held a conference on "Combating and Preventing Illegal Online Activities". Lao government held the meeting "to publicize the dangers of cybercrime and Lao national laws and regulations to all domestic and foreign investors, operators and workers, so as to ensure the peace, security and safety of the Lao country and people. orderly to ensure the healthy development of the Golden Triangle Special Economic Zone", as mp.weixin.qq.com/ reported. Wang Erbao, President of Golden Kapok Group, promised that the Golden Triangle Special Economic Zone would cooperate with the Lao government to crack down on illegal and criminal activities and cooperate with the government to promote and improve laws and regulations against telecommunications network fraud.
LAOS: On 26 Feb, Lao Central Committee held conference on ‘Combating & Preventing Illegal Online Activities’. Event held in Kapok Star Hotel in Golden Triangle Special Economic Zone. The Golden Triangle SEZ is a major hub for illegal online activities. 1/ https://t.co/oJg47aYUzopic.twitter.com/w3Lfof9A0d
In 2023 Great Britain had sanctionedZhao Wei, his wife Su Guiqin and his casino-director Eberahim Abbas due to links to *trafficking of individuals to the [GTSEZ], where they were forced to work as scammers … subject to physical abuse and further cruel, inhuman and degrading treatment or punishment."
