China’s International Criminal Gaming Diaspora

Transnational networks of human trafficking, fraud and money laundering in Singapore, Philippines, China including Hong Kong pose challenges

By: Toh Han Shih

Although Singapore and the Philippines have recently strengthened measures against scams, money laundering, and human trafficking, they face formidable challenges in the face of international criminal networks that span mainland China, Hong Kong, Singapore, the Philippines, and other jurisdictions. Questions have been raised in the Philippine Congress about associates of former President Rodrigo R. Duterte.

With gambling outlawed in China, criminal elements associated with gaming have spun out into not only the Philippines but Cambodia, Myanmar, the Marshall Islands, and other countries, with tens of thousands of luckless victims kidnapped or otherwise forced to operate gaming, investment, and sex scams that have ensnared millions of mainland Chinese looking for a gaming outlet via the internet, only to find themselves deep in credit card debt with no recourse.

An example of this is Alice Leal Guo Hua Ping, a disgraced former Filipino mayor of Chinese origin who is linked to a complex web of scam centers, as Asia Sentinel reported on May 22, with human trafficking in the Philippines, a fraudulent crypto exchange in Hong Kong and a multibillion-dollar money laundering scandal in Singapore. According to a senior committee counsel for the Philippine senate in an interview with Asia Sentinel, there are hundreds of “POGO islands” – Philippine Offshore Gaming Operators – similar to POGOs associated with Alice Guo that have sprung up across the Philippines, many operated by unscrupulous mainlanders who flooded across from China after Philippine gaming rules were broadened about two decades ago, although some do operate legitimately.

The cost to Chinese citizens from these scams has infuriated Chinese President Xi Jinping, who called on Cambodian officials to shut them down in the coastal city of Sihanoukville, whereupon thousands of mainlanders picked up and left. They have also been a problem in Myanmar border areas, where Chinese officials have called for a crackdown. With Philippine President Ferdinand Marcos Jr agreeing with Xi’s call for increased regulation of the POGOs in the Philippines, they may be on the move again, according to the trade publication Asia Gaming Brief, with “emerging countries in the Asia-Pacific region such as Timor-Leste, Vanuatu, and Papua New Guinea, as potential relocation targets” – countries where regulation is scanty and some officials are malleable. 

“In the Philippines and Singapore, the regulators and law enforcement are doing the best they can to counter money laundering. Both governments are serious about making a difference, but with the serious amount of money that is being generated by criminal activity, you have to have enough trained analysts to handle this,” said Matthew Friedman, chief executive officer (CEO) of the Mekong Club, a Hong Kong-based NGO that combats human trafficking.

The quad committee of the Philippines House of Representatives wants to summon several banks, the Philippines Anti-Money Laundering Council (AMLC), and the Philippine Anti-Organized Crime Commission (PAOCC) to its next hearing to shed light on what appears to be the massive movement of funds related to the ongoing investigation into POGOs, Philstar Global reported on October 23.

Philippines Justice Secretary Jesus Crispin “Boying” C. Remulla confirmed on September 20 that arrest warrants or commitment orders were issued against Guo and 15 other co-accused for qualified trafficking charges, the Philippines Department of Justice announced on the same day. Guo, who was born in China and was formerly the mayor of the town of Bamban in Tarlac province, is currently in custody in the Philippines. Guo had earlier fled the Philippines but was arrested in Indonesia and extradited to the Philippines in September.

Guo currently or previously held a 50 percent stake in Baofu Lan Development, Inc., a company which leased a piece of land in Bamban to a POGO named Zun Yuan Technology, according to a report of the United Nations Office on Drugs and Crime (UNODC) in October. A Chinese-born man and woman, Zhang Ruijin and Lin Baoying respectively, were among the incorporators of Baofu, Asia Sentinel reported on May 22.

Zhang and Lin have been named in charges filed in the Philippines against Guo. The three are accused of human trafficking charges by forcing people to work as scam operators for Zun Yuan. Zhang and Lin are among 10 people of mainland Chinese origin who were arrested in Singapore over a money laundering scandal involving over US$2 billion. The scandal, which erupted last year, is the biggest money laundering case in the Lion City’s history. Zhang and Lin were each sentenced to 15 months jail and deported to Cambodia after serving their prison terms in Singapore.

Along with Guo, another shareholder of Baofu is a mainland Chinese, Huang Zhiyang, who is also a shareholder of Sun Valley Clark Hub Corporation in Mabalacat City, Philippines, according to media reports. In May 2023, a police raid at Clark Sun Valley Hub Corporation uncovered more than 1,300 people working in apparent forced labor, according to the UNODC report. That included 428 Vietnamese, 301 Chinese, and 243 Indonesians. Police reported that they were “forced into working for a fraudulent cyber-enabled industry, victimizing their fellow citizens.”

“Major law enforcement operations have uncovered criminal networks operating under registered Philippine Offshore Gaming Operators (POGOs), alongside illegal POGOs and other zones controlled by criminal actors. These areas have housed transnational criminal groups engaged in a wide array of illicit activities. This includes cyber-enabled fraud, human trafficking, kidnapping, extortion, and groups providing cybercrime and money laundering-as-a-service, with some implicated in major global money laundering investigations. This ultimately led to President Marcos of the Philippines declaring a nationwide ban on POGOs (in July),” the UNODC report said.

“Many scam centers in Cambodia and the Philippines are associated with Chinese criminal networks,” the Mekong Club’s Friedman said.

A mainland Chinese, Wang Dingkai, is a co-founder of the Sun Valley Clark Hub Corporation, according to the Philippines Department of Justice. Wang and Su Weiyi, who was born in Fujian province, China, are shareholders of a defunct Cayman Islands company, Atom Holdings, according to a report of the Organized Crime and Corruption Reporting Project (OCCRP) on October 14 and a Cayman Islands court document filed on 6 March 2023. Atom Holdings was the holding company of AAX, a crypto exchange in Hong Kong, according to a US bankruptcy court document filed on February 6, 2023. The AAX platform shut down in late 2022.

AAX users filed complaints against Atom Holdings and related companies with the Singapore and Hong Kong police, and the Seychelles Anti-Corruption Commission as well as the US Federal Trade Commission, the US court document added. “Su Weiyi, a director of Atom Holdings, who is to be the mastermind behind the Atom Group and is alleged to have absconded with the keys to digital wallets holding AAX user assets estimated at US$30 million and possibly more.”

Su allegedly absconded with investors’ money, but returned to Hong Kong where he was arrested on July 18 and charged with theft, according to the OCCRP report. Through two companies, Su is connected to two mainland Chinese-born persons who were also implicated in Singapore’s multibillion-dollar money laundering scandal, Wang Shuiming and Wang Bingang, the OCCRP report disclosed. Wang Shuiming is now serving a 14-month prison sentence in Singapore, while Wang Bingang is on the run from Singapore police.

Singapore’s delicate balancing act

In an October 4 speech, Indranee Rajah, the Singapore Second Minister for Finance and National Development, announced the government is rolling out further measures against money laundering.

“Our recommendations have been carefully calibrated with two twin objectives in mind: one, to strengthen our defenses and two, to do so in a manner that keeps us open and facilitative of business and to minimize the impact on the vast majority of legitimate businesses. As you will appreciate, this is a fine balancing act – because for every step and every measure there are trade-offs. The system cannot be too lax but at the same time it cannot be too stringent, because we do not want to stifle genuine, law-abiding businesses,” said Rajah.

“This is a balance that the government always has to try and strike to ensure that legitimate business is not deterred from Singapore. It has been a well-calibrated balance,” Navindraram Naidu, Deputy Head, White Collar and Government Investigations Practice at Dentons Rodyk & Davidson, a Singaporean law firm, told Asia Sentinel. “We see an enhancement of such efforts through prompt and decisive legislative amendments.”

Singapore’s Anti-Money Laundering and Other Matters Act 2024 that was passed in August 2024 introduced new laws such as new offences of rash and negligent money laundering, provisions to facilitate inter-agency sharing of information, tightening of due diligence checks for casino operators and more flexible powers for a court to deal with seized assets where the person from whom these assets were seized from have absconded, Naidu explained.

“Scams are a transnational crime – it affects many countries, with criminals operating across borders. According to GASA (Global Anti-Scam Alliance), more than S$1 trillion (US$760 billion) was lost to scams in 2023. Singapore is no exception,” said Sun Xueling, Singapore Minister of State for Home Affairs in a speech on October 21. “Given the transnational nature of scam operations, international collaboration to combat scams is not a choice, but a necessity.”

“No government wants to be seen as a safe haven for criminal activity. You will see more countries besides Singapore and Philippines rolling out legislation in response to this problem,” said Friedman. “The more people that have been trafficked into scam centers, the more scamming that will take place. This model of human trafficking started in Southeast Asia and has moved to other parts of the world. We’re seeing it in South Asia, Middle East and Latin American countries like Mexico.”

Toh Han Shih is chief analyst of Headland Intelligence, a Hong Kong risk consultancy. Asia Sentinel editor John Berthelsen contributed to this report