Phone scammers exposed: A web of deceit across the region

Phone scammers exposed: A web of deceit across the region

From a Chinese county where scammers have found a home to a millionaire mastermind in Taiwan to newer operations in places like the Philippines, Talking Point discovers the hidden world of phone scams.

BMWs, Porsches and mansions dot Chang Keng village in Anxi, where just a few years ago, farmers in one of China's poorest regions relied on tea leaves to eke a living. However, when tea prices crashed in 2011, they turned to a new business - phone scams, a fount of illicit wealth.

ANXI, CHINA: Chang Keng Township is a quiet and remote area, where 60,000 people live in 26 villages.

Their tea industry is struggling, in a county – Anxi – famed for its terraced mountain fields and tea farming history dating back to the Tang Dynasty (618 to 907).

But scattered across the villages are luxurious cars like Mercedes, Range Rovers and even Porsches, as well as a number of mansions, some as high as seven storeys and occupied by a single family.

“If you just depend on growing tea, it's almost impossible to build such a big mansion. They may have to work round the clock for many years and would still be unable to afford it,” said Beijing journalist Suki Sun.

“So, to build the mansion, where do you think the money came from?”

Opulence in China's Anxi county, where a number of mansions have been built with money from scams.
Opulence in Anxi.

There are clues to the source of their new wealth, such as a base station in Anxi that was once one of the busiest in Asia, with over a million text messages sent daily.

A sign at one village, however, said it all: “Continue to … fight against phone scamming criminal syndicates”, in Mandarin.

This is where Ms Sun, a crime journalist, has led Talking Point to – China’s infamous “scam town” – as the programme investigates the world of phone scams and its web of criminal syndicates across Asia. (Watch the two-part special here.)

WHERE SCAMMING IS ‘A TYPE OF JOB’

In Singapore, fraud cases involving impersonation of Chinese officials rose by 61 per cent last year compared with 2017, cheating victims out of S$12.7 million.

READ: Crime reports up in 2018 due to surge in scam cases: Police

For the last three years, Police Superintendent Chew Jingwei and his team at the Commercial Affairs Department's Syndicated Fraud Branch, have been trying to find out where these scammers are really from.

The syndicates behind these impersonation scams are sophisticated, transnational and “very well-organised”, he said. “They use phone-spoofing technologies to mask the calls they make to victims in Singapore.

It makes it hard for the law enforcement agencies and investigators to pinpoint the exact locations (of) the call centres.

As a “sizeable proportion” of the victims were told to remit money to China, his team has shared intelligence on cases regularly with the Chinese police.

And it is in Fujian province’s Anxi County, once one of China’s poorest regions, where “scamming has become an important source of income”, said Ms Sun, who has been tracking the evolution of phone scams for the last two years.

Beijing journalist Suki Sun has been tracking the evolution of phone scams for the last two years.
Ms Suki Sun.

“People treat it as a type of job,” she added. “There’s an interesting saying here: Out of 10 persons in Anxi, nine are scammers and one is undergoing training.”

For over a thousand years, the people of Anxi have made a living growing Tie Guan Yin, a premium variety of oolong tea. But when prices crashed owing to overproduction, some people turned to other means of livelihood.

In less than 20 years, earnings in the county grew 40 times.

Talking Point came face to face with one former phone scammer, a Mr Wang, who was able to earn S$3,000 a month in commission – “a big amount of money”, or 10 times his previous salary.

Talking Point host Diana Ser interviews Mr Wang, a former phone scammer born and bred in Anxi.
Talking Point host Diana Ser with Mr Wang, who was born and bred in Anxi.

The money was easy, but his job landed him in jail for eight years. “I thought I was doing a good job, everything was perfect and it wouldn’t be easy to catch me,” he said.

“But eventually … I was too careless and forgot to switch off my phone. So the police detected my signal and proceeded to track me.”

Anti-scam slogans can now be found everywhere, pointed out Ms Sun, “to scare the scammers that the police are stepping up their efforts”.

There is even a “wall of shame” listing people convicted of scams in Chang Keng Township. On it were 23 people who were all jailed.

A “wall of shame” listing people convicted of scams in Chang Keng Township.
Convicted and listed.

CATCHING A MASTERMIND

According to Ms Sun, it has been said that the Taiwanese taught the people in Anxi how to carry out phone scams.

“About two million people in Taiwan can trace their ancestry to Anxi, which means they have very strong ties,” she said.

“When the Taiwanese wanted to expand their scam operations in mainland China, the first place they set their sights on was Anxi.”

A typical village scene in Anxi county in China's Fujian province.
A typical village scene in Anxi.

And over in Taiwan, there have been various forms of phone scams. At the peak in 2009, the authorities handled over 18,000 reported cases – which is two people scammed every hour – said Anti-Fraud Command Centre section chief Paggy Chiu.

To better tackle this complex issue, the centre was set up in 2016, when one of Taiwan’s most notorious syndicate leaders, Zhu Zhi Wei, was making S$1.6 million a year as a phone scammer.

He had started out as a money mule and went on to run the biggest scam operation in Vietnam, for which he was jailed for four and a half years.

After serving his sentence, he continued his illegal ways, operating his boiler room – a call centre where his syndicate called victims round the world – in a posh condominium in front of the Taichung city government building.

He was getting away with his crimes until a multinational phone scam involving Taiwan and Japan led to his arrest in 2017.

At the Anti-Fraud Command Centre, established by Taiwan's Criminal Investigation Bureau.
At the Anti-Fraud Command Centre in Taiwan, established by the Ministry of the Interior’s Criminal Investigation Bureau.

Mr Lin Yen-Liang, head prosecutor at the Taiwan Taichung District Prosecutors Office, explained that catching the mastermind is the key to combating such scams successfully.

“The operating cost is all forked out by him (the mastermind), and 60 to 70 per cent of the money earned goes to him,” said Mr Lin.

“Since he isn’t physically in the boiler room, there is often a lack of evidence directly incriminating him.”

Eventually, Taiwanese prosecutors managed to convince a Japanese victim to lodge a police report in Taiwan. With a victim and concrete evidence, the law enforcers raided Zhu’s boiler room. He was subsequently arrested and sentenced to three years in jail.

The raid on the apartment of notorious syndicate leader Zhu Zhi Wei, where he was arrested.
The raid on Zhu's own apartment, where he was arrested. (Photo taken from a video by Taiwan's Criminal Investigation Bureau.)

SCAM SCHOOL

A raid on another boiler room turned up a surprise: A training centre for scammers. Among those arrested were a teacher, a translator and 17 people from Thailand who had travelled to Taiwan to learn how to become phone scammers.

“They learn about the roles they should assume in scamming their targets,” said Mr Chen Hsin-Lang, head prosecutor at the Taiwan Changhua District Prosecutors Office. “After learning, they’d then carry out the scams.”

The discovery of this “scam school” points to one thing: That scammers are venturing into new territory.

Mr Chen Hsin-Lang is head prosecutor at the Taiwan Changhua District Prosecutors Office.
Mr Chen Hsin-Lang.

“In the past, scam syndicates used to target the Mandarin-speaking community. But recently, we’re noticing that they have also expanded … to non-Mandarin speaking countries like Thailand and Japan, or English-speaking countries,” added Mr Chen.

Over the last decade, the Taiwanese authorities have managed to reduce the number of phone scam cases by over a third – by tightening cybersecurity to prevent data leaks, cracking down on dubious IP providers and restricting the scammers’ Internet access.

Also, IP addresses help lead the police to boiler rooms, where they nab the callers. And arresting the money mules – the most visible people in the syndicate – prevents the money from reaching the syndicate.

But with Taiwanese authorities closing in, the syndicates have been taking their operations overseas, first to China and then to Southeast Asia, including the Philippines, Vietnam and Malaysia.

Evidence found during a raid by Taiwan's Criminal Investigation Bureau.
Evidence found during a raid. (Photo taken from a video by Taiwan's Criminal Investigation Bureau.)

HIDDEN SCAMMERS, UNKNOWING RESIDENTS

In the Philippines, scammers from China and Taiwan are regularly intercepted by the Bureau of Immigration. But those who make it through hire locals to identify good locations for boiler rooms.

The thousands of Philippine islands, and villages in remote areas, make it easy for scammers and their bases to go undetected. Take, for example, the town of Dingras in Ilocos Norte province, some 400 kilometres from Manila.

Unbeknownst to residents, a boiler room had been set up in a warehouse in their 38,000-strong community. There, Chinese and Taiwanese scammers were making calls overseas until it was raided in an operation that was two years in the making.

The raid on the call centre in the Philippine town of Dingras in Ilocos Norte province.
The raid on the call centre. (Photo taken from a video provided by Chief Inspector Artemio Cinco Jr.)

Chief Inspector Artemio Cinco Jr from the Philippine National Police Anti-Cybercrime Group said his unit found several telephone booths and 25 scam callers holed up in the boiler room.

Such scammers typically stay in these boiler rooms for months once they arrive in the Philippines, never stepping out of their compound. They are well provisioned with food, entertainment and adequate sleeping arrangements.

“They had skin as if the sun wasn’t able to touch it for several months,” observed Chief Insp Cinco.

Talking Point host Diana Ser had not imagined that the warehouse, now abandoned, was where frenetic illegal activity had gone on for two years and that some of the calls received in Singapore could have come from that remote area.

Talking Point host Diana Ser peering through the gates of the warehouse in Dingras town.
Ms Ser peering through the gates of the warehouse.

“When I first started on this journey to find out where these scam phone calls were coming from, I naturally thought I’d end up in China,” she said.

“But in reality, behind each phone call is an international network spanning China and Taiwan (to) Southeast Asia. While this call centre has been shut down, who knows where the next one will spring up?”

It is a never-ending game of cat and mouse as phone scams evolve.

Watch this two-part special here. Talking Point airs on Channel 5 every Thursday at 9.30pm.

One of the luxury cars dotting Anxi's villages, with phone scams the source of illicit wealth.
One of the luxury cars dotting Anxi's villages.

Source: CNA/dp

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