WEBVTT - The ‘scamdemic’ costing Australians billions

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<v Speaker 1>From The Australian. Here's what's on the front. I'm Christinamio.

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<v Speaker 1>It's Monday, May twenty. Voters aren't convinced by the Treasurer's

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<v Speaker 1>promise that the government's big spending budget, handed down last

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<v Speaker 1>Tuesday won't push up inflation. That's according to new data

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<v Speaker 1>from Newspoll. Less than a third of people believe they'll

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<v Speaker 1>be better off even with energy subsidies, tax cuts and

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<v Speaker 1>rent assistance. You can read our experts analysis of the

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<v Speaker 1>latest Newspoll results at the Australian dot com dot au.

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<v Speaker 1>Save your money. That's the recommendation of a high ranking

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<v Speaker 1>United States Navy official, Gloria at Valdez, says the government's

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<v Speaker 1>five billion dollar planned upgrades to the Australian Navy's aging

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<v Speaker 1>Colins class submarines has never been attempted and it could

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<v Speaker 1>leave us vulnerable if it doesn't work out. Australia's corporate

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<v Speaker 1>regulator to notify thirty four thousand scam victims of their predicament.

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<v Speaker 1>That's despite a heads up from international law enforcement agencies

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<v Speaker 1>almost a year ago. It follows an investigation by The

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<v Speaker 1>Australian which revealed weaknesses in our banking and government regulations

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<v Speaker 1>make Australians easy targets for Southeast Asian scam factories. That's

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<v Speaker 1>today's episode. A warning before we start. This episode contains

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<v Speaker 1>mention of torture, physical violence and sexual exploitation. Not too

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<v Speaker 1>long ago, the marriage of a South Australian public servant

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<v Speaker 1>where calling John hit a rough patch. It was during

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<v Speaker 1>that time that he received a Facebook friend request from

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<v Speaker 1>an attractive Ukrainian woman named Vira. She told him she

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<v Speaker 1>was recently single and living on the Sunshine Coast where

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<v Speaker 1>she ran a business importing kid's clothing. After a couple

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<v Speaker 1>of days, the conversation moved to WhatsApp. It's an encrypted

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<v Speaker 1>messaging platform, meaning sensitive information can be exchanged more freely.

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<v Speaker 1>Vera asked John if he had any interest in cryptocurrency.

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<v Speaker 1>As it happened he did. He'd recently invested a bit

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<v Speaker 1>of money on a legitimate crypto trading site called coinspot.

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<v Speaker 1>With Vera's encouragement, John opened a new crypto trading account

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<v Speaker 1>on a different website, and this time he went big.

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<v Speaker 1>Within twenty days, he'd poured more than two hundred thousand

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<v Speaker 1>dollars into the scheme. All of the cash he and

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<v Speaker 1>his wife had saved up over several years to buy

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<v Speaker 1>a house. It was only when he tried to withdraw

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<v Speaker 1>his money that John realized he'd been duped. We've all

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<v Speaker 1>heard enough scam horror stories to know where this story ends.

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<v Speaker 1>There was no Verra. She was concocted by a team

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<v Speaker 1>of scammers running countless similar scams somewhere in Asia.

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<v Speaker 2>That is still an active profile, and I can see

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<v Speaker 2>from that profile it is still drawing new people in.

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<v Speaker 1>Amanda Hodge is The Australian's Southeast Asia correspondent.

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<v Speaker 3>So anyone out there, if you're in contact with Vera Pittskaya,

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<v Speaker 3>I suggest you block her now because it's a real worry.

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<v Speaker 1>It's called pig butchering by those in the business. Just

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<v Speaker 1>like pigs being fattened for slaughter. Victims are slowly, expertly

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<v Speaker 1>lured into a false sense of confidence by their new

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<v Speaker 1>online love interest, then they go in for the kill.

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<v Speaker 1>Southeast Asia is quickly becoming the pig butchering capital of

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<v Speaker 1>the world, with countless scam factories targeting thousands of people

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<v Speaker 1>online every year. To say it's a big problem would

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<v Speaker 1>be an understatement. Experts estimate scamming is now the third

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<v Speaker 1>biggest economy in the world, behind the United States and China,

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<v Speaker 1>bringing in trillions of dollars every year, and Australians like

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<v Speaker 1>John are increasingly being targeted because our banking and government

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<v Speaker 1>regulations are easier to get around than those in place

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<v Speaker 1>in the US or Europe. One form of scammer Amanda

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<v Speaker 1>spoke to on a recent trip to King's Romans in

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<v Speaker 1>Northern Laos made it crystal clear this is by design.

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<v Speaker 4>Because the bearing system and the government they make us

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<v Speaker 4>too easier than Europe. At the office, they said, like

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<v Speaker 4>America is dumb and more change more expert to scam

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<v Speaker 4>Australian because they are more smarter than America.

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<v Speaker 1>If Australian authorities are aware of the extent of the problem,

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<v Speaker 1>it's not clear what they're doing about it.

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<v Speaker 2>My understanding is they haven't quite pivoted towards scamming it.

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<v Speaker 2>They're so heavily focused on transnational drug syndicates, which is

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<v Speaker 2>fair enough and has been the biggest issue in this

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<v Speaker 2>region for a long time. But this is now the

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<v Speaker 2>priority and I don't think they've been fast enough to pivot.

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<v Speaker 3>That's my understanding. I wanted to check with them.

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<v Speaker 2>Unfortunately, the interview with the Australian Federal Police was canceled

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<v Speaker 2>and they had a series of written questions they undertook

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<v Speaker 2>to provide answers before publication, and they didn't. I was,

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<v Speaker 2>to be honest, quite surprised and disappointed.

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<v Speaker 1>The Australian's National Crime correspondent, David Murray is reporting today

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<v Speaker 1>the Australian Securities and Investments Commission has been accused of

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<v Speaker 1>dropping the ball on an international scam syndicate that cost

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<v Speaker 1>Ossie's more than two hundred million dollars. A German police

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<v Speaker 1>representative told Dave they alerted the corporate regulator to the

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<v Speaker 1>scam in June of last year and they provided the name,

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<v Speaker 1>contact details and financial losses of thirty four thousand Australians

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<v Speaker 1>who fell victim to it, but ask has yet to

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<v Speaker 1>make contact with any of them. It all begins with

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<v Speaker 1>the handing back of Hong Kong and the famed gambling

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<v Speaker 1>enclave of Macau to China.

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<v Speaker 2>So it cracked down very hard on money laundering around

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<v Speaker 2>twenty nineteen, and it also made an example of a

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<v Speaker 2>couple of very big Chinese casino kingpins who are now

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<v Speaker 2>in jail, so that those anti money laundering measures caused

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<v Speaker 2>a flight of casinos and casino kingpins and crime syndicates

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<v Speaker 2>out of Macau, and they were looking for more permissive

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<v Speaker 2>environments and they found more than they needed in Southeast

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<v Speaker 2>Asia exactly because of these underregulated special economic zones like

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<v Speaker 2>the Golden Triangle. These are all notorious enclaves that have

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<v Speaker 2>attracted huge amounts of Chinese money, a lot of it elicit,

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<v Speaker 2>and of course the criminal syndicates behind those money flows

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<v Speaker 2>are also now deeply embedded into those economies, into the

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<v Speaker 2>politics of those areas as well.

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<v Speaker 1>And then pandemic.

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<v Speaker 2>So the pandemic forced these casinos online, and they had

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<v Speaker 2>this fantastic new market, because so did everyone else.

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<v Speaker 3>When the pandemic.

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<v Speaker 2>Closed borders forced people to stay at home.

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<v Speaker 3>What else was there to do?

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<v Speaker 2>We all did the same thing, right, We had our

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<v Speaker 2>work meetings, our social gatherings on zoom.

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<v Speaker 3>These criminal syndicates.

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<v Speaker 2>Found that they could reach so many other people as well.

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<v Speaker 3>I think people were.

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<v Speaker 2>Vulnerable because they felt lonely and maybe more amenable to

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<v Speaker 2>those kind of strange, spontaneous approaches that most of us

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<v Speaker 2>would normally be suspicious about.

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<v Speaker 3>And so you know, here was this amazing new.

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<v Speaker 2>Market, and they already had the tools to reach them

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<v Speaker 2>through the online gambling networks, they had the money laundering networks.

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<v Speaker 2>They suddenly had the cryptocurrency platforms, and tens of millions

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<v Speaker 2>of fake cryptocurrency platforms have since been created just for

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<v Speaker 2>this purpose, to be funnel money, not only as a

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<v Speaker 2>sort of draw card for people who are interested in

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<v Speaker 2>making quick money out of cryptocurrency, but as a way

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<v Speaker 2>of laundering that money, you know, through the system, because

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<v Speaker 2>once it's in a cryptocurrency account, it's gone.

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<v Speaker 1>Many experts believe China is the only country with the

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<v Speaker 1>resources and a regional influence to really tackle the so

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<v Speaker 1>called scamdemic, and that puts Australian authorities in a tough spot.

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<v Speaker 1>See the unique geopolitics of our region makes clamping down

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<v Speaker 1>on cyber scams just that bit harder. Our relationship with

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<v Speaker 1>China is out of the freezer, but it's not yet

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<v Speaker 1>fully thawed, and tensions over China's rising influence in the

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<v Speaker 1>Pacific means progress is slow. So what do we do.

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<v Speaker 2>It's a really tricky question because the things I'm hearing

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<v Speaker 2>from regional experts point to the fact that the geopolitics

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<v Speaker 2>is really getting in the way of what needs to

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<v Speaker 2>be an international cooperative effort.

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<v Speaker 3>There's no other way to get around this, right.

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<v Speaker 2>Cooperation between China, the US and Australia has in the

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<v Speaker 2>past busted some of the biggest drug syndicates operating in

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<v Speaker 2>Southeast Asia, but those days of cooperation are.

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<v Speaker 3>Gone for the moment.

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<v Speaker 2>And the other complication is that for China, this is

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<v Speaker 2>a tricky one because it's embarrassing for China as well.

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<v Speaker 2>Right China is doing quite a bit to protect its

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<v Speaker 2>own citizens. It's deporting Chinese workers, whether they have been

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<v Speaker 2>compelled or not, because it is putting pressure on countries

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<v Speaker 2>like Me and Myra in particular, but it is not

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<v Speaker 2>really doing anything about scam compounds. Once they stop targeting

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<v Speaker 2>Chinese citizens and once they stop trafficking Chinese scam workers.

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<v Speaker 2>China is the economic giant in the region. If it

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<v Speaker 2>wanted to clamp down on this, it really could, but

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<v Speaker 2>it's really only interested in making sure it doesn't hurt

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<v Speaker 2>its own citizens right now. From China's perspective, Beijing's perspective,

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<v Speaker 2>it probably doesn't see a lot of upside in troubling

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<v Speaker 2>itself with trying to clap down for the benefit of

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<v Speaker 2>Western powers that aren't playing ball.

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<v Speaker 1>Coming up why the people on the other side of

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<v Speaker 1>the scam can be victims too. Our foreign correspondents do

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<v Speaker 1>this kind of in depth reporting and analysis every day,

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<v Speaker 1>and subscribers to The Australian get unlimited access to their

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<v Speaker 1>insights and expertise. Check us out at the Australian dot

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<v Speaker 1>com dot au. We'll be back after this break. Policing

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<v Speaker 1>international scams is a double edged sword because some of

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<v Speaker 1>the people running the cons aren't there of their own

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<v Speaker 1>free will. Many are trafficked into the so called scam

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<v Speaker 1>factories by recruiters. They know they're soul dreams of well

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<v Speaker 1>paid jobs at reputable companies, but the reality is more

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<v Speaker 1>like a nightmare. New recruits to the compounds operating inside

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<v Speaker 1>special economic zones dotted around Southeast Asia are indoctrinated through

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<v Speaker 1>so called scam universities. It's a training program in which

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<v Speaker 1>they're taught the ins and outs of the Australian banking

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<v Speaker 1>system and culture. Things go downhill from there. What you're

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<v Speaker 1>hearing is a scammer being viciously attacked for their on

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<v Speaker 1>the job performance. Many scammers just like them are physically

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<v Speaker 1>and financially trapped by their employers, who force them to

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<v Speaker 1>work seven days a week and demand they pay debts

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<v Speaker 1>in the thousands of dollars if they want to leave.

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<v Speaker 1>Those who refuse to work are beaten, tortured, and raped.

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<v Speaker 1>Some are electrocuted and others are sexually exploited. They're routinely

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<v Speaker 1>deprived of food and sleep, sometimes both, and they're increasingly

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<v Speaker 1>lured to the scam factories from as far away as

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<v Speaker 1>South America, East Africa, and even Western Europe. More often

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<v Speaker 1>than not, their passports are confiscated, making leaving virtually impossible.

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<v Speaker 3>It's completely altered their lives. In many cases, it's ruined

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<v Speaker 3>their lives.

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<v Speaker 2>Young people in particular, who have finished their education, often

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<v Speaker 2>university educations, quite fluent in English, computer literate, very smart

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<v Speaker 2>young people, but facing unemployment rates within their age groups

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<v Speaker 2>of twenty twenty five percent, no chance of getting a job,

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<v Speaker 2>looking for a way out of what looks very much

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<v Speaker 2>like a dead end, and so they too were incredibly vulnerable,

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<v Speaker 2>particularly because these jobs sounded so great, they were paying

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<v Speaker 2>so much more, and in sadly actually so many cases,

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<v Speaker 2>the job prospects were being reinforced by people they knew

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<v Speaker 2>who were recruiting them because they were getting a bonus

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<v Speaker 2>and maybe that was their ticket out too, so it's

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<v Speaker 2>just this terrible, vicious cycle.

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<v Speaker 1>Amanda Hodge is The Australian's Southeast Asia correspondent. You can

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<v Speaker 1>read her full investigation into the region's scam factories, as

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<v Speaker 1>well as additional reporting by National Crime correspondent David Murray,

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<v Speaker 1>right now at the Australian dot com dot au