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A bipartisan congressional investigation has tied Southeast Asia’s industrial-scale scam compounds directly to Chinese criminal networks, costing Americans at least $10 billion annually.
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Hundreds of thousands of trafficked workers operate inside fortified compounds under threat of violence, forced to run fraud schemes targeting victims in the United States and beyond.
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The report stops short of blaming Beijing for a centralized conspiracy but identifies Chinese governance patterns as the key enabler keeping the criminal ecosystem alive and growing.
A bipartisan congressional investigation has exposed one of the most damaging fraud operations targeting Americans, tracing the operation directly to China-linked criminal networks running industrial-scale scam centres across Southeast Asia.
The Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party released the findings in a report online. Committee Chairman John Moolenaar and Ranking Member Ro Khanna led the investigation jointly.
According to the US Department of the Treasury, Americans lose more than $10 billion every year to Southeast Asia-based scam networks operating these compounds and their associated laundering infrastructure.
Moolenaar described the network as a broad web of fraud, human trafficking, cybercrime, and illicit finance that simultaneously strips American citizens of their money and threatens national security. He added that the Chinese government holds the capacity to act against these criminal groups but has consistently chosen not to.
How the Operation Works
The dominant fraud model driving these losses is commonly known as “pig butchering.” Operators build false relationships with victims over weeks or months through sustained social engineering, then direct them toward fraudulent cryptocurrency investment platforms.
Victims frequently lose retirement savings, home equity, and family assets. Beyond the financial damage, investigators documented severe psychological harm, including depression, social isolation, and in multiple cases, suicide.
The report also identified a newer targeting pattern described in Mandarin as “foreigner butchering,” reflecting a deliberate shift toward non-Chinese victims, including Americans, as Chinese domestic enforcement has increased pressure on scams targeting Chinese nationals.
The workers running these schemes inside the compounds are frequently victims themselves. The committee documented thousands of individuals recruited through deceptive means, transported across borders, stripped of identity documents, and held under constant surveillance inside fortified compounds.
According to the report, the US government estimates identified individuals from more than 80 countries were exploited in these operations.
Cambodia, Burma, and the Architecture of Impunity
The investigation focused on Cambodia and Burma as the two most consequential hubs of the criminal ecosystem.
In Cambodia, the report’s most prominent case centres on Chen Zhi, founder of Prince Holding Group, whom US prosecutors describe as the hub of a massive global scam, illegal gambling, and illicit finance network. Chen cultivated close ties to Cambodia’s ruling political structure over the years, rising to cabinet-level advisory roles and obtaining Cambodian citizenship alongside a diplomatic passport.
In October 2025, US authorities announced what they described as the largest forfeiture action in history, seizing $15 billion in bitcoin from wallets in Chen’s possession. A federal indictment and joint US-UK sanctions followed, targeting 117 individuals across his network.
Chinese authorities arrested and extradited Chen in January 2026. The committee noted that his extradition to China almost certainly places any evidence he holds permanently outside more neutral and transparent court systems.
Burma presents a structurally different picture. Scam compounds there operate inside militia-governed border territories where armed actors supply land, coercive control, and protection from enforcement.
The US Treasury Department sanctioned Karen Border Guard Force commander Saw Chit Thu for his role in facilitating scam operations, including leasing territory to criminal investors and deploying armed personnel to secure compound perimeters.
A Distributed Threat, Not a Beijing Conspiracy
The committee was direct on one central conclusion: Beijing does not centrally direct these criminal networks as an explicit tool of state policy. What the investigation found instead is a regional system in which Chinese governance patterns, selective enforcement, underground banking infrastructure, and host-state corruption reinforce each other without requiring coordinated direction from Beijing.
The financial infrastructure supporting the operation relies on hidden Chinese banking systems, virtual asset brokers, as well as shell organizations to move money across borders and keep it beyond the reach of law enforcement.
Khanna framed the investigation as an act of accountability for both American financial victims and the trafficking victims pulled into the compounds. According to Khanna, verifiable cooperation from Beijing (alongside sustained support for civil society organisations working in affected regions) is essential to delivering justice and holding the networks accountable.
The committee recommended that Congress pass the Dismantle Foreign Scam Syndicates Act, increase pressure on foreign protection networks, and treat CCP-linked organised crime as its own high-priority national security category. INTERPOL estimates that between $2 and $3 trillion in illicit proceeds move through the global financial system annually from these networks.
Dark web marketplaces remain a significant part of this criminal economy. A Suffolk man’s guilty plea for operating Empire Market underscores the ongoing fight against online criminal enterprises.
The report closed with a direct warning: distributed threats require distributed resilience, and anything narrower will leave Americans exposed and the broader system of crime, corruption, and coercion intact.
