‘Cyber scam’ hubs partly have their origins “in the collapse of Southeast Asia’s gambling industry, due to the Covid-19 pandemic,” beginning in early 2020.
That is according to a new report titled ‘Cyber Scam Hubs and Human Trafficking’ issued by the Asia/Pacific Group on Money Laundering (APG). It suggested that some gambling hubs that transitioned into scam centres may already have been illegal or unlicensed for gaming operations.
The pandemic “brought lockdowns and stricter border controls,” and as a result, “casinos and hotels, also often located in special economic zones, could no longer generate the expected proceeds through illegal gambling and other crimes conducted by the organised criminal syndicates” that operated them, said the 83-page report from the APG.
“These casinos and hotels were repurposed into cyber scam hubs populated by human trafficking victims to conduct scams,” added the paper.
The APG is an intergovernmental organisation focused on combatting money laundering and terrorist financing. It has 42 members across the Asia-Pacific region and works with organisations and observers from outside the region.
The report said cyber scam hubs are “mainly located along border areas between Thailand, Myanmar, Lao PDR [People’s Democratic Republic] and Cambodia, the northern border of Myanmar with China and the Philippines”.
Of those nations, only Lao, Cambodia and the Philippines have regulated casino industries, though the report made no suggestion that licensed and regulated land-based casinos were involved in the scam operations.
The foreword to the report was by Mitsutoshi Kajikawa, currently deputy vice minister of finance for international affairs at Japan’s Ministry of Finance. He has also been a co-chair of the APG since 2024.
He stated: “This report demonstrates the need to ensure that fraud committed through cyber scam hubs is appropriately prioritised in order to promote the mobilisation of AML [anti-money laundering] tools, international cooperation and asset recovery to combat fraud and associated money laundering.”
Region-wide
The report noted regarding the regional distribution of the problem: “There are also cyber scam hubs located in special economic zones, such as Dara Sakor special economic zone and Henge Thmorda special economic zone in Cambodia, the Golden Triangle special economic zone in Lao PDR and the Clark Free Port Zone Bamban in Tarlac, and Cebu in the Philippines.”
The APG said scam compounds operate as “pseudo-legitimate entities with implied ownership largely under control of a Chinese-speaking diaspora and blended oversight teams”.
The report added: “Workforces blend Indians with other victims from Africa, South Asia and Southeast Asia.”
The Asia/Pacific Group nonetheless observed that “the introduction of legislation… in the Philippines to ban offshore [online] gaming and related operations had a significant and immediate impact on the prevalence of cyber scam hubs in the Philippines.”
The Philippines is due to undergo a fourth mutual evaluation process by the APG in 2027, per a February statement by the country’s leader, President Ferdinand Marcos Jr.
In February 2025, the Philippines was taken off the ‘grey list’ of another watchdog, the Paris, France-based Financial Action Task Force (FATF).
Jurisdictions on the FATF grey list are subject to increased monitoring by the FATF, in relation to anti-money laundering. According to a research paper by the International Monetary Fund, places under such a measure can “experience a disruption in capital flows”.
POGO shutdown
The APG’s new report did mention case studies relating to Philippine Offshore Gaming Operators (POGOs), a former licensing category under the Philippine Amusement and Gaming Corp (Pagcor). In 2024, the Philippine government declared the category had been discontinued and that POGO activities were being shut down with operations due to cease by the end of that year (pictured below).
The APG cited a case in late 2024, where Philippine authorities raided the compound of an unnamed company suspected to be operating offshore gaming and a scam hub.
The watchdog said: “Company A is also allegedly involved in human trafficking, illegal online gambling, swindling and money laundering.”
The raid took place at the company’s compound, which consisted of several buildings inside a 2.6-hectare (6.4-acre) site where “around 900 workers were rescued”. Afterwards, authorities executed a court order “to open numerous safes where bundles of cash totalling PHP113 million [US$1.8 million currently] were found,” stated the watchdog’s report.
The APG cited another case in Bamban, in the Philippines, of a “POGO” that had allegedly been “associated with [a] politically exposed person,” or “PEP” in anti-money laundering terminology.
The APG stated: “The illegal funds originated from romance and investment scams orchestrated by trafficked workers inside the compound.
“Victims (mostly foreigners) were lured into sending funds under the pretence of love or high-return crypto investments.”
It said the case was initially detected through interagency intelligence sharing and on-the-ground surveillance.
The APG added: “The Presidential Anti-Organised Crime Commission (PAOCC) and Philippine National Police (PNP) conducted joint operations, supported by intelligence from foreign law enforcement partners and possible reports from financial institutions.”
It cited suspicious transaction reports filed with the country’s Anti-Money Laundering Council.
The APG further noted: “During the investigation, authorities used search warrants and onsite digital forensic tools to extract data from confiscated devices and trace the financial flows.
“International cooperation (particularly with Australian and Chinese counterparts) was crucial in tracing transnational fund flows and victim identification.”
Hiding proceeds
The APG report said 65 percent of its members “noted the use of complex corporate structures, including shell or front companies, as a primary means of laundering proceeds from cyber scam hubs”.
Cambodia, another jurisdiction mentioned in the new APG report on cyber scam centres, has recently said it is clamping down on scam centres, including ones that might be tied to casino compounds.
The country’s prime minister, Hun Manet, recently urged a continued online-fraud crackdown amid a casino-sector cleanup there.
The APG nonetheless noted: “The syndicates’ strategy of spreading operations across sites has reduced vulnerability to shutdowns.”
The report’s executive summary stated: “Continued research and enhanced understanding of the evolving methods used to perpetrate these crimes – such as decentralisation, dissipation and the use of artificial intelligence (AI), as well as further engagement with civil society and NGOs [non-governmental organisations] – are needed to support policy decisions and operational responses to protect victims and safeguard the integrity of the international financial system.”
