An online fraud industry worth trillions of won, based in Cambodia, is collapsing under pressure from the international community. As Chen Zhi, the Chinese Cambodian tycoon and chairman of Prince Group and a key figure, was arrested and extradited, unprecedented departures of personnel are occurring at large-scale scam compounds he is known to have been involved in.
According to the Guardian and AP on the 22nd, thousands of people, including human trafficking victims, were recently released or escaped on their own from so-called "romance scam" crime workshops across Cambodia. The Indonesian Embassy said 1,440 of its nationals exited the scam compounds. Crowds gathered in front of the Chinese Embassy in the capital, Phnom Penh, to inquire about repatriation procedures. Amnesty International also confirmed through satellite and video analysis that mass departures occurred at a minimum of 10 workshops.
This mass breakout began after the arrest of Prince Group chairman Chen Zhi. Chen, a Chinese Cambodian tycoon, faces allegations that he built a criminal empire through online investment scams and more. The U.S. and U.K. governments sanctioned him in Oct. last year. Jacob Sims, a visiting researcher at the Harvard University Asia Center, said in an interview with the Guardian, "These releases and escapes are the result of years of accumulated international pressure erupting all at once, triggered by the sanctions on Chen Zhi in Oct. last year."
Still, observers said the mood on the ground differs from the government's touted crackdown results. Some residents testified that the scam networks obtained advance notice of the raids and spirited away key personnel days before police entered the compounds. Citing some assessments, AP reported that "rather than a substantive dismantling, it is closer to a 'crime prevention theater' meant to showcase the impact of the crackdown."
The online fraud industry accounts for nearly half of Cambodia's gross domestic product (GDP). Annual revenue is estimated at $12.5 billion (about 18.4 trillion won). Because the fraud industry has effectively become a major source of foreign currency, many observers say it will be difficult for the Cambodian government to completely dismantle it in a short period.
The future for those who escaped is also uncertain. Most were lured by job scams, had their passports confiscated, and were forced into romance scams or cryptocurrency schemes as victims of human trafficking. Monse Ferrer, regional research lead at Amnesty International, said, "Without sufficient support systems, there is a high risk that victims will be handed over to other scam compounds," adding, "In fact, there are growing cases of people wandering in search of help."
It is unclear whether this crisis will lead to a full structural shift. Citing experts, the Guardian noted, "Since the fraud industry has become an important resource for the regime, it can be reorganized and revived anytime the international pressure eases," adding, "More than raids, sustained international monitoring and institutional intervention are key."