The US Treasury department’s Office of Foreign Assets Control ( OFAC ) has sanctioned a network of scam centres in Southeast Asia, including nine targets in the Myanmarese town of Shwe Kokko bordering Thailand and 10 in Cambodia.

The department, in a statement released on September 8, describes Shwe Kokko as “a notorious hub for virtual currency investment scams” under the protection of the Karen National Army ( KNA ), an ethnic army active in the Karen state of Myanmar.

“Southeast Asia’s cyber scam industry not only threatens the well-being and financial security of Americans, but also subjects thousands of people to modern slavery,” says John Hurley, undersecretary for terrorism and financial intelligence, in the statement. “In 2024, unsuspecting Americans lost over US$10 billion due to Southeast Asia-based scams. “Under US President ( Donald ) Trump and Treasury secretary ( Scott ) Bessent’s leadership, the Treasury will deploy the full weight of its tools to combat organized financial crime and protect Americans from the extensive damage these scams can cause.”

The estimated losses of more than US$10 billion last year, the statement adds, were 66% higher than those in 2023.

Sanctions include executive orders covering cyber scams, human rights abuses, large transnational criminal organizations and their supporters, and actors engaged in “malicious cyber-enabled activities”.

Myanmar

Shwe Kokko and its newly developed Yatai New City – located in Kayin State in southeast Myanmar – are home, the Treasury notes, to a “prominent compound of scam centres” set up by Chinese businessman She Zhijiang and KNA leader Saw Chit Thu.

“In eight years, they transformed a small village on the Moei River into a resort city custom built for gambling, drug trafficking, prostitution and scams,” the department points out, “targeting people around the world, particularly Americans.”

She, the largest shareholder of the Yatai New City compound, has both Myanmarese and Cambodian citizenship. He was arrested in Thailand in 2022 based on an Interpol Red Notice issued by China, which has been seeking his extradition from Thailand ever since.

She’s Yatai International Holdings Group controls 70% of Myanmar Yatai International Holding Group, according to the Treasury statement, with KNA holding company CLM owning the remaining 30%.

Among the individuals and companies in Myanmar designated under the sanctions are Tin Win, Saw Min Min Oo, Chit Linn Myaing, Chit Linn Myaing Toyota, Chit Linn Myaing Mining and Industry, Shwe Myint Thaung Yinn Industry and Manufacturing, She Zhijiang, Yatai International and Myanmar Yatai International.

Cambodia

Among those sanctioned in Cambodia are TC Capital in Sihanoukville, which owns a complex of buildings, including the Golden Sun Sky Casino and Hotel, the statement shares, “from which virtual currency scams and other illegal activities have been carried out, sometimes by victims of human trafficking.”

TC Capital was founded by real estate investor Dong Lecheng, “convicted of money laundering in China in 2008 and […] investigated for bribery, as well as for operating illegal online gambling rings advertised to Chinese nationals”.

Also designated is another Sihanoukville company, KB Hotel, and its co-founder Xu Aimin, “sentenced to 10 years in prison in China in 2013 for operating an illegal billion-dollar online gambling ring […] the subject of an Interpol Red Notice, and […] wanted in Hong Kong for laundering US$46 million of the proceeds through its banks.”

Others sanctioned are KB Hotel board member Chen Ai Len, Heng He Bavet Property ( where Chen is also director ), Heng He Bavet director Su Liangsheng and Heng He Investment ( where Su is also a director ), along with Xu’s KBX Investment and HH Bank Cambodia, majority owned by Chen and Su.

Impacts

“As a result of today’s action, all property and interests in property of the designated or blocked persons described above that are in the United States or in the possession or control of US persons are blocked and must be reported to the OFAC,” the Treasury states. “In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50% or more by one or more blocked persons are also blocked.

“Unless authorized by a general or specific license issued by the OFAC, or exempt, the OFAC’s regulations generally prohibit all transactions by US persons or within ( or transiting ) the US that involve any property or interests in property of blocked persons.

“Violations of US sanctions may result in the imposition of civil or criminal penalties on US and foreign persons. The OFAC may impose civil penalties for sanctions violations on a strict liability basis.”