THE Bureau of Immigration is investigating a local online gaming operator on suspicion that it could be a front for a trafficking syndicate that recruits workers for online scam hubs in the region.
The bureau launched the inquiry after a Filipino male said he ended up working in a crypto scam operation in Myanmar after he was hired by the local operator.
It is not an isolated case. In recent years, a growing number of Filipinos have been tricked into joining firms that specialize in online fraud. Notable among these Asian scam hubs is the Shwe Kokko in Myanmar, a $15-billion industrial and entertainment complex said to be run by a Chinese mafia syndicate.
Shwe Kokko started off as a money-laundering center for the syndicate but has since branched into more profitable online scamming after China banned cryptocurrency in 2021.
The Filipinos who managed to escape from Shwe Kokko recount the same ordeal of slave-labor conditions: being forced to work for as long as 18 hours and tortured when they failed to meet their quota for luring professionals into dubious crypto investments.
The same syndicate is believed to be responsible for smuggling in recruits for Philippine offshore gaming operators, or POGOs, that are actually part of its extensive cyberfraud network.
Last May, the Department of Justice and the Philippine Amusement and Gaming Corp. announced they would review the licenses issued to POGOs following a raid on one operator at the Clark Freeport Zone in Pampanga.
At least 1,000 foreigners worked for the Clark firm. They said they were forced to work long hours trading in cryptocurrency.
Twelve officers of the POGO — seven Chinese, four Indonesians and a Malaysian — were charged with human trafficking in relation to cybercrime, serious illegal detention and kidnapping, and violation of immigration laws.
The first POGOs were set up in 2016. The gaming firms that were driven out of China were looking for a new haven. The Duterte administration, meanwhile, was looking for new sources of revenue to bankroll its ambitious infrastructure projects. It was a mutually beneficial arrangement.
The POGOs did not disappoint. In 2020 they poured P7.2 billion into the national coffers.
But there was a catch: Far from relying on local hires, they brought in an army of foreign workers. At one point, more than 300,000 Chinese were working for POGOs.
Things turned around when the Covid pandemic shrank the online gaming market and the government exacted higher taxes from gaming operators. Many POGOs decided to relocate elsewhere.
The remaining POGOs quickly became social pariahs. Several operators were implicated in money laundering, prostitution, and the kidnapping and murder of Chinese individuals.
A number of them were found by the Bureau of Internal Revenue to owe P50 billion in franchise taxes.
Sen. Mary Grace Poe considered the social costs of hosting POGOs "too high."
"As much as we need the income, I don't think we are desperate enough to say that 'Never mind the cost. Let's just go with this'," she said.
Finance Secretary Benjamin Diokno said POGOs were no longer the cash cow that they used to be, with revenue from gaming operators dropping from a peak of P7.2 billion to P3.9 billion in 2021.
The lure of a windfall from crypto scamming is what is driving the cyberfraud syndicate to tap POGOs to maintain its foothold in the Philippines.
Around the world, crypto scammers reaped a record $14 billion profit in 2021, according to one report.
The US Federal Trade Commission said that from 2021 through the first quarter of 2022, more than 46,000 people reported losing over $1 billion in crypto scams.
Shutting down the Chinese syndicates' local operation will require a regionwide effort.
Immigration Commissioner Norman Tansingco said the Association of Southeast Asian Nations, or Asean, will be laying the groundwork for a united front in fighting crypto scamming.
"This is a regional issue, and we have discussed ways to combat this with other countries that have observed this as well," Tansingco said.
Only when scam hubs in the region are shut down will the trafficking of crypto scammers stop.
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