China-linked scam centers target U.S., congressional commission warns

Washington Post

a day ago

A bipartisan commission that advises Congress on China warned Friday that 'fragmented and under-resourced' U.S. efforts to counter a multibillion-dollar scam industry, backed by Chinese criminal organizations, could see it increasingly aimed at Americans and escalate rapidly with new technologies.
The U.S.-China Economic and Security Review Commission (USCC) said in a report released Friday that U.S. losses from China-linked fraud probably far exceeded $5 billion in 2024 — up 40 percent from the previous year — with Americans emerging as the top targets for Chinese criminal organizations since the covid pandemic.
The scams — often linked to transnational crime syndicates involved in drug and money laundering operations — target Americans through text messages, social media, dating apps and jobsites. Beijing, meanwhile is using its own crackdown on the scam centers to expand its law enforcement presence in Southeast Asia, which could bolster China's leverage over regional governments and facilitate intelligence operations, the report said.
'These things are industrial-scale fraud factories that are using some of the most modern technology available, and their use of that technology is allowing them to scale these things very quickly. … I don't even think American law enforcement has figured out how to get their heads around this yet,' said Mike Kuiken, a USCC commissioner.
The commission raised concerns that Chinese criminal organizations are giving Beijing unfettered access to U.S. personal data. It pointed to recent wide-scale raids by Chinese authorities on scam centers carried out in countries including Laos and Myanmar, where they seized computers and phones that, according to the report, probably grant Beijing access to data harvested on American targets.
'They're collecting computers, communication devices and they're collecting a lot of data on Americans, which should concern us as well,' said Randall Schriver, vice chair of the commission and the former assistant secretary of defense for Indo-Pacific Security Affairs under the first Trump administration.
The report also highlighted cases where scam operators and criminal syndicates have built 'mutually beneficial' relationships with the Chinese government and its Belt and Road infrastructure program, creating special economic zones where scam centers targeting Americans have flourished. It pointed to the ongoing expansion of a criminal network led by U.S.-designated triad boss Wan Kuok Koi, which a Washington Post investigation last month showed has ties to the Chinese Communist Party and is under investigation by Southeast Asian authorities for operating scam centers.
The Chinese embassy in Washington did not comment on specifics raised in Friday's report. 'The Chinese government stands firm in combating crimes of telecom and online fraud, fighting cross-border illegal and criminal activities and protecting the lawful rights and interests of Chinese citizens,' said Chinese embassy spokesman Liu Pengyu.
The USCC report comes amid a sweeping State Department reorganization — one that began last week and has seen about 1,300 employees dismissed, including key personnel overseeing coordination of counter-scam operations in Southeast Asia.
Gone as part of the shake-up is the Office of Multilateral Affairs within the East Asian and Pacific Bureau, which coordinated with countries on U.S. policy countering scam centers targeting Americans, according to two former department officials who spoke on the condition of anonymity to avoid reprisals.
The State Department has said that 'mission-critical functions and personnel' will be reintegrated within the department. Commissioners behind Friday's report said they hoped those scam-fighting staff would remain in place.
'If the State Department is about making America safer, more secure, more prosperous, this needs to be on the agenda,' said Schriver.
The Trump administration has gutted the U.S. Institute of Peace, which laid off nearly all of its U.S.-based staff in March. The organization had played a key role in monitoring the scale of the threat posed by Chinese-backed criminal networks operating scam centers across Southeast Asia.
In its recommendations to Congress, the USCC report said that cementing cooperation with Southeast Asian allies is critical to avoid 'further entrenching Beijing's presence and influence' in the region.
'There's a law enforcement piece and there is a diplomacy piece,' said Kuiken, who said scam centers should rank higher on the U.S. agenda in future engagements with Beijing, alongside ongoing efforts to crack down on the global fentanyl trade. 'It is a complex challenge involving multiple elements of our government, but it's a very serious problem,' he said.
Research by USIP found that Chinese criminal organizations are expanding their global reach, using international money laundering networks — including operations inside the United States — to facilitate large-scale scams and mass human trafficking. These networks are used to staff scam centers, which have proliferated into the hundreds, particularly in a lawless region known as the Golden Triangle, where China's border meets Myanmar and Laos near Thailand.
Key U.S. allies like Thailand are facing growing pressure from Beijing to grant senior Chinese police officials access to the scam compounds, according to the USIP report.
'The Chinese government has worked closely with mainland Southeast Asian governments to combat transnational criminal activities in those areas, arguably providing a pretext for China to gradually assert more political influence over the region,' it said.
In a large-scale operation earlier this year, Thai authorities — acting at Beijing's urging — cut electricity to scam centers along the Myanmar border after a Chinese actor was kidnapped and held for several days in one such scam center. The USCC warned Congress that the crackdowns target groups scamming Chinese citizens, an action the USCC says is incentivizing them to shift focus to Americans.
'If the United States does not strengthen its relationships with Southeast Asian countries and help them build the capacity to tackle scam centers, these countries will likely grow more reliant on China to address transnational crime, further entrenching Beijing's presence,' said the report.
The commission said that Beijing has little incentive to crack down on operations targeting U.S. users, noting that criminal networks have pivoted toward Americans. The scams not only drain financial resources but have also had more tragic consequences, including reported suicides tied to victims' losses, the report said.
These scam operations, historically run by Chinese criminal organizations, initially targeted Chinese nationals through so-called 'pig butchering' schemes — a term describing romance scams in which fraudsters build trust over social media or messaging apps before persuading victims to send money. Buoyed by new tools including artificial intelligence and social media, as well as better connectivity in regions where they operate, scam operators have sought more Western victims.
That pivot has also fueled a growing network of money laundering on U.S. soil. Federal indictments show how hundreds of millions of dollars swindled from Americans have been funneled through sophisticated webs of bank accounts, shell companies and cryptocurrency exchanges — ultimately routing stolen funds back to criminal syndicates in Asia.
In February 2025, federal prosecutors in California charged two Chinese nationals and a U.S. accomplice with laundering more than $13 million in proceeds from pig-butchering scams through U.S.-based shell companies. Last month, the Justice Department announced a record $225 million cryptocurrency seizure tied to a sophisticated money-laundering scheme that lured U.S. victims into sending funds through fraudulent investment platforms.
'The Chinese are also clearly extending their money laundering operations into the United States, so this digital money laundering is being assisted by Chinese criminal elements within our borders,' said Shriver.
Hannah Natanson contributed to this report.