• she

The spectacle of telecommunications fraud in Myanmar- Court makes room for fraud companies

When Qi Hong, a native of Shandong, worked as a Chinese teacher in a school in northern Myanmar, he found four "professional" companies nearby: the employees were all Chinese, and they slept during the day and went to work at night. Every morning at 6 o'clock in the morning when he gets off work, the company will play the song "From the New World" by the composer Dvorak, when he just wakes up.



These companies have special psychological counselors and legal experts, and they also set off firecrackers and fireworks from time to time. The employees will go to the school and chat with him whenever there is a power outage or network signal is interrupted.


"Sometimes while we are chatting, the victim would calls, and they would quickly grab the phone and start their business."


These businesses are the telecommunication frauds that China has severely tried to cracked down on in recent years.


Actions to persuade the "persons stranded in northern Myanmar" in many places across the country (see "Myanmar North Telecom’s Big Persuasion of Returning: Returning to China by "Scalpers" lining up, and Governments going to Yunnan to supervise the Battle") on July 29, 2021. In the eyes of industry insiders, behind this unprecedented policy is the unusually rampant telecommunication frauds in northern Myanmar.


The elementary school department of a school in Mengneng County was rented out to an electronic fraud company in the second half of 2019. The wall was installed with barbed wire and guarded by security guards. (Qi Hong/Picture)


Psychological counselor, legal expert and firecrackers

From 2017 to early 2021, Qi Hong worked as a Chinese teacher in Mengneng County, Wa State Special Economic Zone for 3 years. The electronic fraud industry was rapidly emerging in northern Myanmar during this period and because of his personal interest, he made a careful observation of this industry.


The northern Myanmar region mainly refers to the four special zones of Myanmar, namely Kokang, Wa State, Kachin State, and Xiaomengla. Because of the large number of Chinese, it is easy for the fraudsters to integrate into the local area, and the long border line facilitates smuggling, making it an ideal place for the fraudsters to live.


Wa State’s telecommunication fraud industry was originally located along the China-Myanmar border. In 2019, under the crackdown by the Chinese police, the telecommunication fraud company moved to Mengneng-the latter is located in the hinterland of the Wa State, dozens of kilometers away from the China-Myanmar border. Qi Hong witnessed the influx of young men and women in Mengneng vehicles with his own eyes.


According to Qi Hong’s observation, most of the fraudsters are from rural areas, and the men would go back home to build a house, buy a car, and marry a wife when they scammed enough money.


Lawyer Zhou Huibo once represented a telecom fraud case. He told the Southern Weekend reporter that his client went to northern Myanmar (Mengbo County, Wa State) to engage in telecom fraud because of poverty. This young man in his twenties joined an electronic fraud company called "Great Expectations" in northern Myanmar. Employees were taught how to scammed and source for victims during the first month to the job. Employees would later register for WeChat/ QQ accounts with false identities," The supervisors would usually be the one who "close the deal" on behalf of his team ensuring that the victims are left with nothing but huge debts.


Wang Bin (nickname) claimed to have spent 4 months in an electronic fraud company in the Mengla Special Zone. He said that he learned the ability to "observe human behaviour" during the period where the worked.. "To put it bluntly is how to deceive people, creating an illusion of how people think that you are really a successful person." Wang Bin said, "It's funny to think about it. I didn't graduate from junior high school. People can also plan and invest in wealthy people. I used to think that wealthy people are very smart, but they are not."


According to Qi Hong, the electronic fraud company has various types of managing the business. For example, the implementation of hierarchical management of employees, ordinary employees are not allowed to enter and leave the company casually, untill they can reach a certain level. For employees who have made significant contributions, the company has various incentives, such as traveling abroad.


Qi Hong told the Southern Weekend reporter that he often heard firecrackers after the electronic fraud company entered Mengneng. Later, I learned that if the amount of fraud in a day exceeds 1 million yuan, the electronic fraud company will set off firecrackers to celebrate. One of the fraud company senior staff told him that this is actually a way of motivating employees.


Fraud company also has a special "psychological counselor" who is responsible for brainwashing employees. In order to eliminate the psychological burden of deceiving employees, the "psychological counselor" will use a set of words to "let you (the fraudster) inject the idea that only fraud can make you stand out, so you are free. Not only do you think you are doing it yourself." It's right to deceive others.


In June 2021, Hao Zhendong (one of the scammers), who returned to China from a company in the Kokang Special Economic Zone, mentioned in an interview with a media that "killing pigs" (referring to fraudsters using online friends to induce victims to invest in gambling) was given by the boss. Common words used by employees to "brainwash" the employees : "Even if you dont scam the victims, other people from the same trade would scam the victims as well"


Qi Hong said that in addition to "psychological counselors", electronic fraud companies also have legal experts, who are generally held by the company's partners. They attend legal classes every Saturday to inform employees of relevant legal regulations and methods of destroying evidence. It even rehearse drama internally to improve the staff's ability to deal with the police.


Ambiguous attitude of the local government

Wang Bin told the Southern Weekend reporter that the fraud company would change their office space every once in a while. "When the border armed police comes to carry out a large-scale raid, they will run to other places."


Qi Hong said that due to the sharp increase in Mengneng's telecommunication fraud companies, the local houses were not enough, and even the houses of schools and courts were rented out to electronic fraud companies. Zhang Wen who returned to China after Qi Hong, once held an important position in a functional department in Mengneng County. He confirmed to the Southern Weekend reporter that Meng Neng had vacated the court room and rented it out to an telecommunication fraud company.


The attitude of the local government appears to be more subtle. According to a report in the fifth issue of 2020 in the local media "Wa Today", at the end of 2019, Mengneng County held a signing ceremony for the foundation-laying cooperation project of "Chunneng Science and Technology Industrial Park". The construction area exceeds 5 million square meters. "Many investors signed on the spot." A key local official mentioned in his speech that "The United Wa State Party and the Wa State Government are the strong backing of foreign investors."


However, according to Qi Hong's observation, Mengneng does not have a technology industry base, and this type of technology park is more like a new paradise for telecommunication fraud companies.


Qi Hong told the Southern Weekend reporter that after the fraud company conquer the area that he lived in, a large number of mobile board houses started advertising in Meng to rent out the fraud company. The construction cost of these board houses were very low, but the rent is higher than that of high-end office buildings in China. He said that the reason why the electronic fraud industry builds prefabricated houses and does not build permanent buildings is because they are afraid that they would suffer more losses in the event if they are destroyed.


On April 20, 2020, the Wa State Judicial Committee issued an announcement stating that China’s statement on “increasing the investigation of smuggling and overseas gambling” was simply a rumor. He also reiterated that "any foreigner who works or does business in the Wa state will be protected by the Wa state as long as they abide by the laws and regulations of the Wa state."


According to the laws of the Wa State, the telecommunication fraud industry are like the sex industry and gambling industry, however it is not a crime.


According to Zhang Wen, the annual fiscal revenue of Mengneng County has also increased after the establishment of electronic fraud companies. In 2019, it was only more than 13 million yuan. The next following year, the electronic fraud industry gathered in the county, the fiscal revenue reached more than 20 million yuan. .


"Outside the Law"

According to Zhou Xin, a teacher at Yunnan Nationalities University, the local government's ambiguous attitude towards telecom fraud in northern Myanmar stems from the local economic needs and geographic environment.


Zhou Xin initially paid attention to the swindling of Nortel in Myanmar in mid-October 2019. At that time, WeChat and Alipay were blocked in the border area between China and Myanmar. The public security agency later explained that the move was due to the "blocking" measures taken to combat online fraud.


"At that point of time, I felt that (the problem) was more serious. Why is this place only closed? There must be special reasons." Zhou Xin told the Southern Weekend reporter.


Zhou Xin believes that the large-scale banning incidents of helpless actions indicate that cross-border electronic fraud activities in northern Myanmar have reached a level of carelessness. The amount involved is large, the victims have suffered heavy losses, the social impact is bad as there are few precedents for the difficulty of catching.


Zhou Xin wrote a paper on telecom fraud in northern Myanmar. In addition to the aforementioned close ties between people on the border between China and Myanmar, the main reason for the spread of scams in Northern Myanmar is the imperfect laws and low capital costs for setting up a fraud business in Northern Myanmar.


Relevant information shows that among the four special zones in northern Myanmar, only Kokang is controlled by the Myanmar government, and the other three special zones are still under the control of ethnic minority local armed forces. They only belong to the Union of Myanmar in name and practice "a high degree of autonomy" in reality.


According to Zhou Xin, on the one hand, there is currently no extradition agreement between China and Myanmar. On the other hand, even if there is an extradition agreement, it is difficult to be binding on northern Myanmar. In this situation, it is very difficult for China to carry out police cooperation with northern Myanmar.


Among the four special zones, the largest and most powerful is the Wa State, which has a 500-kilometer border with Yunnan Province. Information reveals that the total population of the Wa State is about 600,000, of which the Chinese are estimated to be about 150,000. Because of its close relationship with China, the Wa state uses Renminbi. Chinese is one of the official languages ​​of the Wa state. The three major telecom operators in China provide telecom network services. According to Zhang Wen, most of the daily necessities in Wa State come from China, and even the Chinese textbooks used in schools are "People's Education Edition".


The Wa State is a major part of the "Golden Triangle" of drugs. At the beginning of this century, the Wa state completely banned opium cultivation and developed rubber-based alternative agriculture. However, due to factors such as the continued downturn in rubber prices, the road to economic transformation was not smooth. According to the official documentary filmed on the 30th anniversary of the Wa State Peace Building, the average annual income of the Wa State in 2018 was only RMB 1,000.


Zhou Xin said that due to the unsatisfactory economic transformation and the weakening of the economy, in order to deal with the Burmese government, the special economic zones in northern Myanmar must have some industry support that can make a fortune in the short term, such as gaming, pornography, and telecommunications fraud. Is one of them. He believes that judging from the rapid development of telecommunication fraud in northern Myanmar in recent years, it cannot be ruled out that a certain "hidden rule" has been formed between the local government and the electric fraud gang.


In a paper published in 2020, Zhou Xin directly referred to northern Myanmar as an "lawless paradise." He believes that the region, as a third-party interest group independent of the Chinese government and the Myanmar government, has formed a unique political system, and has derived a relatively independent social system and management method, which has led to various problems in the process of social transformation. Various criminal activities such as trafficking and drug smuggling are intertwined, creating a breeding ground for cross-border fraud crimes.


Teacher leads the students to join the electronic fraud company

According to Qi Hong, after the establishment of the electronic fraud company, Mengneng's various "supporting" services also prospered. There are even "red light districts" in restaurants and hotels.


Casinos were seen increasing in Mengneng County. A WeChat chat record provided by Qi Hong shows that in a school group in 2020, a school principal once suggested that teachers voluntarily buy shares in the casino.


Money laundering methods - After victims remit the cash to the scam companies, someone else would quickly withdraw via the domestic bank's self-service teller machine, and then transfer the cash to northern Myanmar. Finally carrying the bags of cash back to Myanmmar.


According to Qi Hong, after China cracked down on "runners", it once caused a shortage of cash in Wa State. As a result, a private cash exchange business started to emerged in the local area. Some shops exchanged money in electronic fraud company accounts into cash for every 100 yuan. A handling fee of 10 yuan or more is required. In addition, some people have also seen business opportunities from the Chinese police's "blocking" measures to combat electronic fraud. Many small shops have put up signs at the door, promising to unblock mobile phones and WeChat for customers, and receive 50 yuan or 100 yuan at a time. .


Qi Hong told the Southern Weekend reporter that the electronic fraud company has insufficient manpower and would recruits people everywhere, among which teachers are the key development targets. Several teachers in his school joined the electronic fraud company, most of them were part-timers. A colleague of his went to the electronic fraud company for three months. He wanted to leave because he couldn't make business. As a result, the electronic fraud company asked him to pay 5,000 yuan a month for food. Scammers were not allowed to leave untill certain amount is paid to the scam company.


Qi Hong said that as long as students learn Chinese pinyin, they can type Chinese characters on their mobile phones, and the electronic fraud company will also accept them. In the winter vacation of 2021, the county government once required all students in grade six and above to be brought to work by the teacher to help out the scam company.


The screenshots of WeChat provided by Qi Hong to Southern Weekend reporters showed that in a WeChat group called "Mengneng County Central School", a person in charge of the school once issued recruitment advertisement to the teachers of the school: "The job will require you to deal with the internet, someone who who is able to bring the students on and off work daily.


Identity can be bought, the price has risen recently

Zhang Wen believes that although the electronic fraud industry will bring certain benefits to northern Myanmar in the short term, but harmful and not beneficial in the long run.


Qi Hong told the Southern Weekend reporter that the local people in Mengneng are very poor. After the the electronic fraud industry conquer their country, prices have soared and people's lives have become even harder. In addition, the local people were originally simple and there was no such word as "fraud" in the local dialect, but since the establishment of an electronic fraud company, the local Chinese have been branded as "scammers".


On April 12, 2021, the official Weibo of the National Anti-Fraud Center of China released a short video of "Revealing the True North of Myanmar for You", which mentioned a case: On the morning of April 8, the court of the Judicial Committee of the Wa State of Myanmar held The public judgement assembly conducted a public trial on a number of Chinese defendants, and three of them were sentenced to death immediately. The local procuratorate charged the three defendants that they had “no sales” in telecommunications network fraud, as such they had thoughts of theft, so they carried out many cases of kidnapping, robbery, and theft in the local area.



According to Qi Hong, after the implementation of the domestic "persuade return" policy in 2021, electronic fraud personnel soon have countermeasures. For example, some people obtain the status of a teacher through bribery, so as to avoid trouble after returning to the country in the future. When Zhang Wen was in charge of a certain school in Mengneng, he also recruited several electronic fraudsters as teachers, because it was impossible to recruit people.


According to Qi Hong, after the implementation of the "persuade return" policy, some electronic fraudsters bought foreign identity and planned to never return to the country. A relative of a former colleague of his specializes in helping people apply for foreign nationality. It used to be more than 50,000 yuan, but recently it has increased to 150,000 and 200,000 yuan.



https://mp.weixin.qq.com/s/fwPi9tI9iCsUVrVZCJN4tw