Sri Lanka sees ‘alarming’ rise in cybercrime as scam networks relocate from south-east Asia | Sri Lanka
Sri Lanka has become a hub for transnational cybercrime, experts have warned, after a crackdown in Southeast Asia prompted Chinese-run criminal networks to relocate vast fraud operations.
Sri Lankan police spokesman Fredrick Wootler said the country was witnessing an “alarming increase in cybercrime” committed by people who enter the country as tourists and then conduct illegal fraud operations targeting people around the world.
Authorities in Sri Lanka have conducted more than a dozen raids on alleged fraud in the country since the beginning of the year, arresting and deporting nearly 700 foreigners allegedly involved in these operations.
On Thursday, Sri Lankan police detained 18 Chinese citizens and one Laos citizen in their latest raid in the capital Colombo. The Guardian visited the raid site and found that the crooks had left behind dozens of fake documents, ranging from fake legal certificates, fake US treasury documents and fake company records, stating that their companies were worth $10 billion.
An officer from the criminal investigation bureau, who carried out the raid and wished to remain anonymous, said they also found 62 passports, most of which belonged to Chinese citizens.
“They had phones, laptops, pen drives, RAM, processors, a fake document stamp and numerous fake documents. We also found a certificate that was fake, framed and hung on the wall to show that they were a US registered business,” he said.
The majority of those arrested and deported for involvement in fraud this year were Chinese nationals, but raids also detained people from Vietnam, India, Indonesia, Laos, the Philippines, Malaysia and Myanmar. Police said all those arrested came to Sri Lanka on tourist visas.
The transnational fraud industry that has developed in Southeast Asia over the past decade has become one of the largest organized crime enterprises in the world. It is run mostly by Chinese gangs and employs hundreds of thousands of workers, many of whom have been kidnapped or forced to work.
From vast fortified settlements in Cambodia and Myanmar, large-scale fraud factories operate global operations ranging from romance scams and crypto scams to online gambling and money laundering. The US estimates that Americans will lose $10 billion to fraud centers in Southeast Asia in 2024.
But as political pressure mounts on host countries in Southeast Asia, fraud compounds have faced serious pressure from authorities, pushing Chinese operators and criminal organizations to find new places to set up operations.
According to experts, Sri Lanka has emerged as a preferred new destination due to the ease of obtaining a tourist visa and the newly introduced “digital nomad” visas. There are also limited regulations regarding SIM cards and internet connections, as well as many offices and hotels that can be rented at low prices.
There is already a significant Chinese presence in Sri Lanka’s infrastructure and business, and Chinese visitors are not uncommon. Sri Lanka has also relaxed rules on online gambling and gaming, and mechanisms to go after cybercrime appear to be limited. The current modus operandi is mostly to deport, rather than prosecute, foreigners found to have committed cybercrimes.
Mark Bo, a cybercrime researcher and author of Scam: Inside Southeast Asia’s Cybercrime Compounds, said he noticed a change in operations against Sri Lanka two years ago, and that it began to be mentioned in posts and recruitment campaigns on the messaging app Telegram.
“After the crackdown in Cambodia really intensified, I saw a lot more posts on Telegram channels with people saying they were going to move to Sri Lanka,” Bo said.
“Clearly some kind of transplant of the same machinery is taking place there. This demonstrates the difficulty of controlling the industry because one of its defining characteristics is how mobile and how adaptable it can be.”
Operations are accelerating beyond the control of the authorities. Businessmen in Colombo have complained that rents for office space have more than doubled in some complexes due to a surge in demand and high prices paid by groups from China.
Police found that these operations attempted to avoid detection by operating in small groups of five who rotated around different hotels, apartments and offices every three months, rather than forming visible settlements. The officer said their recent raids were supported by large sums of money, in one case eight floors of an apartment building being rented out.
Police chief Kamal Ariyawansa confirmed that a Chinese criminal organization was behind the operation, trying to trick American victims into investing in a fake US company.
The Chinese embassy in Colombo has publicly acknowledged that its citizens are involved in phone fraud rings, which they say have moved to Sri Lanka following a crackdown in southeast Asia. “Such cases cause tremendous damage and the Chinese embassy provides full support to Sri Lankan law enforcement agencies in decisively suppressing the suspects,” officials said.
