How Elon Musk's Starlink enables a multibillion-dollar online scam industry

The Age

2 days ago

Zach Hope and Kate Geraghty travel to the borderlands near Myanmar, where efforts are under way to rescue thousands of trafficking victims from scam factories. See all 4 stories.
Ordinarily, Mr Lyu might have gone through unhindered – corruption and complacency had always kept Thailand's borderlands with Myanmar well lubricated. March, though, was a rotten time to be hauling contraband towards Mae Sot, a Thai smuggling hub about 500 kilometres north-west of Bangkok.
The Thai checkpoint guards were red-hot, and they pinched him just outside of town, opening his ute to allegedly find 38 boxes of premium American product disguised as innocent online shopping.
Ten days earlier, the guards at another trafficking hotbed about 200 kilometres south, in Kanchanaburi province, had arrested a Burmese man with 21 boxes of the same forbidden goods, all of it allegedly destined for the eastern Myanmar scam compounds which, for at least five years, have been stealing life savings from victims around the world in sophisticated online frauds.
Inside the boxes were not weapons or implements of torture – Myanmar already had plenty of these. What the Asian crime syndicates really needed — and likewise ordinary citizens – was an internet connection.
The preferred provider, according to military figures, non-government organisations and freed workers, remained Elon Musk's Starlink.
Mr Lyu, a Chinese national, and the Burmese man arrested earlier were allegedly carrying Starlink's small, white, portable and illegal-in-Thailand dish receivers. In Musk's uniquely screwy style, he calls them 'Dishy McFlatface'.
Starlink has been helpful for students, businesses and resistance groups in Myanmar that are contending with the military junta's internet shutdowns. Using a constellation of almost 7000 low-orbit SpaceX satellites, Starlink can connect travellers, far-flung villages and humanitarian aid efforts around the world with fast, low-latency internet.
Living up to the marketing pitch – 'connectivity where you least expect it' – it is also hooking in the scam compounds.
Underneath the satellite dish receivers, in rooms stacked with PCs and under the eyes of ruthless Chinese bosses, are the workers – the human production line, the ones who send you friend requests from good-looking Facebook profile pictures and tip you off to surefire investments.
The number of online scammers in Myanmar is believed to be more than 100,000, and possibly double or even triple this. But many of them have been duped themselves, trafficked over the border from Thailand after answering fake job ads and accepting free flights to Bangkok. Once in Myanmar, they are held captive and forced to fool under threat of torture.
The United Nations says it's an 'illicit trade crisis with global implications'. And still, there are the Starlinks. From the Thailand side of the river you can see them on distant rooftops, dozens of them in haphazard-looking clusters.
Seeking to identify which of the buildings in these estates are running scams? Spotting the Starlink receivers is a good place to start.
'As a person who used to do humanitarian work, I know communications is very important,' says Kannavee Suebsang, the secretary-general of Thailand's Fair Party, referring to Starlink.
'But if there is some kind of restriction or some kind of monitoring process – I know [SpaceX] can, technologically, do it. However, it depends on the will.'
It was unclear which side of Myanmar's complex spectrum of good and evil intended to use the two carloads of seized Starlinks, but the busts made positive news for the Thai government, which had at that time abruptly discovered concern for the extraordinary happenings just over the Moei River border. It had been purging dodgy border officials complicit in the smuggling of goods and people, and had cut the exports of fuel, electricity and internet feeding the criminal operations.
One news website described Mr Lyu's takedown by the 'dynamic anti-narcotics unit and savvy police officers' as a scene 'worthy of an action thriller'.
Cutting the line
On a Friday night in September 2022, Musk, the world's richest man, was in a panic that Ukraine's overenthusiastic deployment of Starlink might trigger a European nuclear winter.
Having offered free and discounted use of the service for the fight against the Russian invasion – for which he won global praise – Musk was now wrestling with word that Kyiv was planning a Starlink-guided submarine drone attack on the enemy's naval fleet in Crimea.
According to Musk biographer Walter Isaacson, Musk feared such a violent provocation in Crimea, annexed by Russia in 2014, would cross Moscow's nuclear red line, imperilling the world.
'So he secretly told his engineers to turn off coverage within a hundred kilometres of the Crimean coast,' Isaacson wrote in his revealing 2023 tome, Elon Musk. 'As a result, when the Ukrainian drone subs got near the Russian fleet in Sevastopol, they lost connectivity and washed ashore harmlessly.'
The anecdote raises a pertinent question: If Musk can kill coverage so precisely in Crimea, why not around the scam compounds?
If SpaceX has taken measures to do such a thing, it has not said so. Questions from this masthead remain unanswered.
'Elon Musk and Starlink are failing the first basic test of business and human rights, which is to ensure that your operations do no harm,' claims Phil Robertson, director of the Asia Human Rights and Labour Advocates consultancy.
'Starlink can pinpoint where their services are being operated from, and there are plenty of local experts who can tell Starlink where these scam compounds are.'
The view from the border
One of those experts is Captain Chinnaret Ratchavan, a veteran of the Thai military who is responsible for protecting Tak Province's border with Myanmar.
He has a fondness for Australians, developed during joint military training exercises a couple of decades ago, and so he granted this masthead unique access to areas of the borderlands that are normally closed to civilians, behind layers of checkpoints.
Thai farmers here sometimes find bodies of foreigners floating in the Moei River, Ratchavan says, a sign of just how brutal the scam factories can be.
Ratchavan feels sorry for the workers who end up trapped on the other side of the river, but he doesn't believe the line that most have been tricked and trafficked.
'They are misguided people,' he says. 'They know they are coming to work at a scam factory.'
On the drive, the captain and his men of the Ratchamanu Task Force point out the vast Myanmar crime estates, some of them wedged so close to the Moei River border that you can see the patrolling soldiers – men from Myanmar's ethnic armed organisations, which double as the mafia's landlords and security services.
One of the most notorious estates, Taichang, is on land controlled by the Democratic Karen Buddhist Army (DKBA). In addition to seven scam compounds, Taichang has all the conveniences of a regular Sin City – casinos, shopping strips and grand hotels, this masthead is told. Land has been cleared for more.
KK Park, another of the most reviled estates, is on land controlled by the group formerly known as the Karen Border Guard Force (BGF), which is aligned with the military junta that stole power from the democratically elected government of Myanmar in the 2021 coup that kicked off a complex, multi-front and ongoing civil war.
There are perhaps dozens of scam compounds over the river from Tak Province. Opposite one of them, a task force soldier pointed out the messy clusters of white dishes atop brown rooftops.
'Underneath the Starlinks are the scam operations,' he says.
The Thai crackdown
It is possible SpaceX's decisions about Starlink coverage areas – where to kill it, where to allow it – factor in people and groups who genuinely need the service and use it for legitimate purposes; some of the dozens of scam compounds clustered around the Myanmar town of Myawaddy operate in and around communities with law-abiding citizens.
Thailand considered this too when deciding in early February to cut fuel, electricity and internet feeding over the border, and it came to a resolute conclusion: starving out the mafia, or at least appearing to try, was worth any collateral damage.
The cuts have worked to a certain extent, in part because affected communities complained to the ethnic warlords abetting and protecting the crime syndicates.
Pressure was coming from China, too, whose citizens make up many of the scam victims and scam workers. Thailand implemented the so-called 'three-cut policy' on February 5 – the day before Prime Minister Paetongtarn Shinawatra met with Chinese President Xi Jinping in Beijing.
It was from about this time that the scam bosses, the DKBA and the BGF began releasing large numbers of scam workers. By late May, about 10,000 people from dozens of countries had been allowed to cross back to Thailand and fly home.
BGF leader Saw Chit Thu has long maintained his innocence, saying he is merely an unwitting landlord and, since learning of his tenants' true nature, has been trying to push them out.
'I've never had the chance to explain, and even the Thai authorities have issued an arrest warrant. I want to ask, 'What have I done wrong?' ' he told Thailand's The Nation.
On May 5, two months after the interview was published, the US sanctioned the BGF and Saw Chit Thu for his alleged role 'in facilitating cyberscams that harm US citizens, human trafficking, and cross-border smuggling'.
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Generally speaking, the crime syndicates are remarkably sophisticated, analysts say, and often integrated into legitimate or legitimate-appearing businesses.
'What really defines this criminal industry for me are the blurred lines between business, politics and crime and how well-connected these people are,' says Kristina Amerhauser, a senior analyst with Global Initiative against Transnational Organised Crime.
Business as usual
The Thai government says the three-cut policy is working. The release of 10,000 people is some evidence of this, and it is true that some compounds have scaled down or shut entirely.
But tens of thousand more people – the most profitable workers, whom the bosses call 'gold collar dogs' – remain enslaved in the compounds opposite Mae Sot and Tak Province and scam bosses continue to make their billions.
Former workers and non-government organisations have told this masthead that many of the scam compounds have back-up generators and alternative sources of fuel. Satellite internet takes care of connectivity problems.
There is also evidence the scam centres have re-opened further south around Payathonzu, according to the United Nations Office on Drugs and Crime. This is where the Burmese man was allegedly heading with his 21 Starlink boxes.
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Other operations have moved to the other great scam haven of South-East Asia – Cambodia.
'They have a lot of money and they bribe authorities. They know where to go,' the Fair Party's Kannavee Suebsang says. 'That's why it's difficult to follow them. We are two steps behind them all the time.'