Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: On the banks of the Mekong River and Laos there's
Speaker 2: a startling site. After traveling through small plantations of coffee
Speaker 2: and bananas, a winding road descends into what looks like
Speaker 2: a city emerging from the jungle.
Speaker 3: It completely stands out.
Speaker 2: Matt Campbell is Asia editor for Bloomberg BusinessWeek.
Speaker 3: There are really tall buildings, huge skyscrapers. There is a
Speaker 3: big shopping complex. You can hear music and see neon
Speaker 3: light shows.
Speaker 4: At night.
Speaker 2: A spectacular fountain show plays in the middle of an
Speaker 2: open plaza. Choreographed jets of water dance in sync with
Speaker 2: Chinese music and neon spotlights. In the area around it,
Speaker 2: there's an artificial lake and nearby a large casino. But
Speaker 2: amid this seemingly gleaming new city, there are allegations that
Speaker 2: something much more sinister is taking place here.
Speaker 4: Yeah, they keep my passport when I arrived for the
Speaker 4: first time in the laws LAMB.
Speaker 2: We're calling this woman City and we've altered her voice
Speaker 2: due to safety concerns. City says she was trafficked to
Speaker 2: work in what's believed to be a fast growing type
Speaker 2: of business in this area of LAOS known as the
Speaker 2: Golden Triangle Special Economic Zone. She says she was forced
Speaker 2: to work in a scam center here, duping people for money.
Speaker 4: I become a scamera and they teach me how to
Speaker 4: become a scamera.
Speaker 2: And city is believed to be one of many by
Speaker 2: the estimates that have been made, and of course they are.
Speaker 3: Estimates because to some extent this is unknowable, tens of
Speaker 3: thousands of people working in the scam business and the
Speaker 3: Special Economic Zone.
Speaker 2: The US Treasury Department has imposed sanctions on what it
Speaker 2: says is a criminal organization that runs this area, and
Speaker 2: the United Nations Office on Drugs and Crime has identified
Speaker 2: the zone as a nexus of money laundering, but the
Speaker 2: sanctions have had no obvious impact on the zone's expansion,
Speaker 2: and LAO leaders have never taken action against the chairman
Speaker 2: of the zone, a Chinese businessman named Joo Wi. Welcome
Speaker 2: to the Big Tach Asia from Bloomberg News. I'm wanh.
Speaker 2: Every week we take you inside some of the world's
Speaker 2: biggest and most powerful economies and the markets, tycoons and
Speaker 2: businesses that drive this ever shifting region. Today on the
Speaker 2: show Inside the Golden Triangle Special Economic Zone, how a
Speaker 2: hub created for economic development, became a hive of criminal
Speaker 2: activity and why authorities don't seem interested in stopping it.
Speaker 2: The Golden Triangle Special Economic Zone in Laos has been
Speaker 2: a notorious drug smuggling passageway for about a decade, but
Speaker 2: beginning around twenty twenty two, in the midst of COVID,
Speaker 2: police and diplomats in Southeast Asia took note of what
Speaker 2: appeared to be a major new business here in this
Speaker 2: part of Laos.
Speaker 3: Crypto scam centers places where workers, many of them who
Speaker 3: trafficked and held against their will, spend their time trying
Speaker 3: to befriend people online and persuading those people, generally in
Speaker 3: rich countries so US, Western Europe to some extent China,
Speaker 3: to make scam investments where they then lose all their money.
Speaker 2: One former scam center worker that Matt spoke to was
Speaker 2: a woman we're calling City. She's a young Indonesian who
Speaker 2: says she was trafficked to work there.
Speaker 3: She had a very typical experience in that she answered
Speaker 3: a job ad on Facebook. In her case, it was
Speaker 3: to work doing computer graphics, which matched quite well with
Speaker 3: her skills. She was told the job would be in Thailand,
Speaker 3: but in fact she ended up in Llows, in a
Speaker 3: building that was like a prison and where she was
Speaker 3: forced to work against her will, scanning people in the
Speaker 3: United States.
Speaker 4: They pay for everything until I arrived in Laos, but
Speaker 4: after that everything chants. They lock us, all of us inside.
Speaker 2: Matt says. City told him she had to surrender her
Speaker 2: passport and she couldn't leave the building without an access card.
Speaker 2: She was allowed to keep her phone, but her managers
Speaker 2: would routinely go through her messages. Siddy says she was
Speaker 2: taught to run the scams like this.
Speaker 4: I need to have set story for middle guy in
Speaker 4: online chatting, then I get the customer trust.
Speaker 3: Often the initial contact is made on dating sites, so
Speaker 3: someone who's actually in a fluorescent lit office in the
Speaker 3: special economic zone is posing as a young single woman
Speaker 3: who's living somewhere in the US, stringing along generally a
Speaker 3: man who they're talking to.
Speaker 4: I have a toolplace is a California and another one
Speaker 4: is Virginia. Then I say like, yeah, I'm very set woman,
Speaker 4: and then I will say I also don't have husband.
Speaker 4: That's why I come to looking. Maybe I have a
Speaker 4: lacking things for nit a guy in this online day thing.
Speaker 3: And the way this works is called pig butchering, and
Speaker 3: the metaphor it's a bit inelegant, is that you're fattening
Speaker 3: a pig and then you eventually slaughter it. And the
Speaker 3: fattening the pig is building trust, building a relationship with
Speaker 3: these online marks, and gradually and without pushing too hard,
Speaker 3: convincing this quote unquote customer to make investments in generally crypto,
Speaker 3: and like all the best scams, these ones pay off.
Speaker 4: At first it's real probate, like one thousand, two thousand.
Speaker 4: Then after that you put more until you put all
Speaker 4: of your money, and then after a very big because they.
Speaker 3: Move in for the kill, butchering the pig if you like,
Speaker 3: and then maybe you put in your whole life savings.
Speaker 3: You put it onto a crypto platform that is controlled
Speaker 3: by the scam center, and that money disappears booth it's gone.
Speaker 2: City and several other scam center employees told Matt there
Speaker 2: were consequences if the workers failed to get enough customers.
Speaker 3: They are punished severely with things like beatings or electric shocks.
Speaker 4: One off, China, Smaan didn't get the customer after I'm
Speaker 4: not sure how many loans, and they watch him with
Speaker 4: Oh way.
Speaker 3: So you saw this man being wept.
Speaker 4: Yeah, until the blood everywhere. They put this guy in
Speaker 4: front of the levator for so us. This is Funny's
Speaker 4: funey you will get if you didn't allow our rules.
Speaker 2: City was desperate to get out, but the place was
Speaker 2: heavily guarded, and she says she didn't know who to trust.
Speaker 4: I see also one time someone tried to run out
Speaker 4: from the building and he get the electric show. At
Speaker 4: three am. He get the electric show. I say, why still,
Speaker 4: this is not human So he said if you try,
Speaker 4: if you still want to go out, they will kill you.
Speaker 2: Scam Centers like this one city worked in are incredibly
Speaker 2: lucrative businesses in this unique special economic zone in laos
Speaker 2: as mad and As College Pitcha Taneka Simpipat highlighted in
Speaker 2: their investigation. A recent report by the United States Institute
Speaker 2: of Peace, a Congress funded research institution, estimated that the
Speaker 2: amount stolen by scam centers in Maycon countries likely exceeds
Speaker 2: forty three billion dollars a year. That total includes considerable
Speaker 2: losses in the US and Europe, as well as China.
Speaker 2: So who is behind this alleged criminal enterprise.
Speaker 3: The founder and the face of this project is a
Speaker 3: Chinese businessman named Chiao Wi.
Speaker 1: Totally, I am well, it's not a great thing that
Speaker 1: the Golden Triangle has a terrible reputation.
Speaker 3: Chiao Wei portrays himself as a kind of kindly godfather
Speaker 3: who is bringing development to allows in a somewhat paternalistic way.
Speaker 3: There is a lot of talk about helping the Lao
Speaker 3: people better themselves, helping them tap the prosperity of China,
Speaker 3: bringing them out of poverty.
Speaker 1: People used to say that you'd lose a kidney in
Speaker 1: the Golden Triangle, but actually this place is peaceful.
Speaker 2: Here, Jou Wai is speaking to several media outlets in
Speaker 2: a YouTube video posted earlier.
Speaker 1: This year, because we are here to promote tourism to
Speaker 1: boost the economy. Now, through our joint efforts, we're turning
Speaker 1: this place into a region that is developed economically and
Speaker 1: financially in all aspects.
Speaker 2: After the break, how did Jowwei come to run this place?
Speaker 2: And if the Golden Triangles Special Economic Zone really is
Speaker 2: a hub of criminal activity, why is he still in charge.
Speaker 2: The Golden Triangle Special Economic Zone was the brainchild of
Speaker 2: a Chinese businessman named chiao Wei.
Speaker 3: He's from the far northeast of China in halong Jiang,
Speaker 3: which is a very cold, larshly rural province. He left
Speaker 3: school for his teenage years, ended up working various sort
Speaker 3: of odd jobs, and somehow in the nineties ended up
Speaker 3: in the casino business in Macau, just next to Hong Kong.
Speaker 2: Jaoo built a large casino business in the Asian gambling capital,
Speaker 2: and then when the market got crowded in Macau, he
Speaker 2: moved the operations in the mid two thousands to Southeast Asia,
Speaker 2: to less regulated places like me and Mar and eventually Laos.
Speaker 2: And it was in Laos, this small landlocked country sandwiched
Speaker 2: between Thailand and Vietnam, where Joo developed close relationships with
Speaker 2: decision makers in the country. In two thousand and six,
Speaker 2: he struck up a deal with allow government to set
Speaker 2: up this special economic zone, which he said would bring
Speaker 2: growth and prosperity to the country.
Speaker 3: When this was beginning, the pitch to the local population
Speaker 3: was more or less that this is going to be
Speaker 3: great for you. This is going to bring a lot
Speaker 3: of development. There are going to be jobs, and you
Speaker 3: will benefit.
Speaker 2: The government entrusted thirty nine square miles and control of
Speaker 2: the project at Jow by granting him a ninety nine
Speaker 2: year lease that gave him de facto control over the city.
Speaker 2: He started with building a gambling palace and from there
Speaker 2: it's grown into what's become a small city and effectively
Speaker 2: a fortress for Joo himself.
Speaker 3: He's in charge. Lao law may theoretically apply, but in
Speaker 3: practice law enforcement regulation that's all up to the Special
Speaker 3: Economic Zones managers, namely Johwet and his Liltuture tenants. Lao
Speaker 3: police have not been able to enter accept with permission
Speaker 3: of management. So it was almost like a little empire
Speaker 3: within a sovereign country in which Jahwei and his colleagues
Speaker 3: had just about complete control, and they appear to continue
Speaker 3: to enjoy that status.
Speaker 2: And as a special Economic zone grew and more money
Speaker 2: poured in, it didn't take long for law enforcement agencies
Speaker 2: in the US and Thailand to suspect that more was
Speaker 2: going on beneath the surface.
Speaker 3: Within a few years of Jahwe setting up this place
Speaker 3: beginning construction, law enforcement officials in the region were getting
Speaker 3: reports that large amounts of methamphetamine were being trafficked through
Speaker 3: the site.
Speaker 2: In twenty eighteen, the US Treasury Department slapped sanctions on
Speaker 2: what it called the Jauwei transnational criminal Organization. It said
Speaker 2: the Special Economic Zone was a hub for the trafficking
Speaker 2: of drugs, people, and wildlife, as well as money laundering
Speaker 2: and bribery, and more recently, the Special Economic Zone has
Speaker 2: diversified into hosting scam centers. Joo said in the past
Speaker 2: that drugs and the trafficking of drugs and people are
Speaker 2: prohibited in the zone, and that quote, we definitely do
Speaker 2: not allow scamming. The Golden Triangle's Special Economic Zone management
Speaker 2: didn't respond to Bloomberg's detailed request for comment from Joo.
Speaker 2: Lao government officials also didn't respond to requests for comment
Speaker 2: on this story. After Bloomberg sent inquiries, Lao State Media
Speaker 2: reported that the government had ordered the removal of scam
Speaker 2: centers in the Special Economic Zone by late August. State
Speaker 2: media said the shutdown ordered on the scam centers came
Speaker 2: after a meeting between Jow and high ranking officials from
Speaker 2: the Lao Ministry of Public Security as well as the
Speaker 2: governor of the Lao province where the Economic Zone is located.
Speaker 2: But Matt says it's it's unclear how or whether such
Speaker 2: an order will be enforced, and he says despite the
Speaker 2: allegations of crimes from international authorities, there wasn't much law
Speaker 2: enforcement action from Laos before this latest announcement on state media, and.
Speaker 3: The reason for that is simple. The Lao government is
Speaker 3: actually an investor in the project. The Lao government, when
Speaker 3: the special economic zone was created, took a twenty percent
Speaker 3: stake in the project. We don't know if it's still
Speaker 3: a twenty percent stake. There is some indication the stake
Speaker 3: may actually have gone up. Johwet is in business with
Speaker 3: the Lao government in this project.
Speaker 2: But the crimes alleged to be happening in the Golden
Speaker 2: Triangle Economic Zone aren't just problems for the Lao government.
Speaker 2: The vast majority of the alleged scam victims are from
Speaker 2: the US, Europe and China, and in recent months, Lao authorities,
Speaker 2: presumably at the urging of the Chinese government, have arrested
Speaker 2: more than one thousand Chinese citizens who were allegedly working
Speaker 2: inside scam operations in the economic zone. They were deported
Speaker 2: back to their home country, and last year, according to
Speaker 2: the US Institute of Peace, these scam operations across Southeast
Speaker 2: Asia together stole more than three point five billion dollars
Speaker 2: from Americans. So why hasn't the US taken further action?
Speaker 3: Even if you are the TEA or the FBI, or
Speaker 3: one of these American law enforcement agencies which have global reach,
Speaker 3: at least on a good day, you are still constrained
Speaker 3: by sovereignty.
Speaker 2: Meaning there's only so much you can do about alleged
Speaker 2: crime that's happening in another country, even when it's reportedly
Speaker 2: targeting your citizens.
Speaker 3: The specially economic zone is in Laos. The Lao government
Speaker 3: doesn't appear to have a problem with it.
Speaker 2: Joo himself hasn't been charged with any crime, but he
Speaker 2: does appear to be.
Speaker 3: Careful as we know, he certainly is not traveling anywhere
Speaker 3: where he could be subject to US extradition request.
Speaker 2: And as for the young woman we're calling city, the
Speaker 2: Indonesian worker Matt talked to, who said she was forcefully
Speaker 2: held inside a scam center in the economic zone. She
Speaker 2: did eventually find a way out two months after her
Speaker 2: rival in Laos City saw her chance.
Speaker 3: The way she escaped in her account is that she
Speaker 3: was taken across the river into Thailand to renew her
Speaker 3: permission to work in Laos and took the opportunity at
Speaker 3: that point to make a run for.
Speaker 4: It because understanding us, they didn't go with us. They
Speaker 4: just sending us alone. But there they have someone, but
Speaker 4: we didn't know who is the person who's waiting for us. There.
Speaker 2: When she was taken over the border into Thailand to
Speaker 2: renew her visa, she saw a moment when it seemed
Speaker 2: like nobody was watching and jumped into attack that got
Speaker 2: her to the airport in chang Rai in northern Thailand.
Speaker 4: I'm telling the taxi guy like please us helping me.
Speaker 4: I want to go to airport. Then they follow me
Speaker 4: until to the airport. The two guys, the big one,
Speaker 4: they're looking for me and I hiding in a counter.
Speaker 3: In City's case, she made it to the airport in
Speaker 3: chiang Rai, She says she actually ended up hiding in
Speaker 3: a simcard shop behind the counter while she waited for
Speaker 3: a flight that a friend had booked for her online.
Speaker 3: And then she made it out and eventually back to Indonesia,
Speaker 3: her home country.
Speaker 2: City says she was lucky she's the only one who
Speaker 2: took off on that visa run to Thailand, but Matt
Speaker 2: says countless other traffic labors are still trapped, forced to
Speaker 2: work at the scam centers like the one city escaped from.
Speaker 2: This is The Big Take Asia from Bloomberg News.
Speaker 3: I'm wan ha.
Speaker 2: This episode was produced by Naomi Um Young Young, Jessica Beck,
Speaker 2: and Thomas lou who also fact checked it. It was
Speaker 2: mixed by Blake Maples. It was edited by Jeremy Keene
Speaker 2: and Caitlin Kenny. There was additional reporting from Papita tanaka Simpipot,
Speaker 2: and we'd like to give a special shout out to
Speaker 2: Bloomberg's Originals team. Our senior editor is Elizabeth Ponso, Nicole
Speaker 2: Beemster Bower is our executive producer, and Sage Bouman is
Speaker 2: Bloomberg's head of Podcasts. Please follow and review The Big
Speaker 2: Take Asia wherever you listen to podcasts. It helps new
Speaker 2: listeners find the show. See you next time.