News
Sri Lanka fast becoming hub for international scam operations
View(s):- Globally known as scam camps, scam farms or scam factories, the existence of these in Sri Lanka came to light only this year
- Law enforcement authorities fear its widespread nature in the country could seriously impact the banking system
By Sandun Jayawardana
Sri Lanka has evidently become an attractive destination for international criminal networks operating so-called “scam camps,” according to police.
This is a new development for Sri Lanka, with the existence of these camps coming to light this year following several high profile raids.
A series of major police raids in the Western Province that led to the arrest of nearly 200 foreigners over the past week has revealed the widespread nature of the problem. Law enforcement authorities warn that the scams could even have a serious impact on the country’s banking system.
A vast majority of those arrested are Chinese nationals. Several Indian and Thai nationals too are among those taken into custody. The Kandy Range Crime Investigation Unit yesterday arrested 114 Chinese nationals on suspicion of engaging in online financial scams after raiding a hotel in Kundasale. Police said they seized more than 100 computers and nearly 300 mobile phones in the possession of the suspects. The Chinese nationals, including about 20 women, had been renting out 47 rooms of the hotel at the time police raided the location.
Police arrested 114 Chinese nationals and seized computers and mobile phones during yesterday's raid in Kundasale. Pic by Shane Seneviratne
In the early hours of last Sunday (6), the Criminal Investigation Department (CID) raided a hotel along Hanwella Road, Gampaha, and a private establishment in Hanwella following a tip-off that a group of foreigners were staying at these places and were carrying out financial scams through social media and over the phone. They arrested 40 foreigners at the two locations on suspicion. They included 30 Chinese (29 males and one female), four Indians (one male and three females) and six Thais (two males and four females). Investigators also seized 499 mobile phones, 24 laptops and 29 desktop computers suspected to have been used in the scams. The next day, a further 19 Chinese nationals were taken into custody from a location in Nawala. On Tuesday (8), officers from the Panadura North Police Station arrested 20 Chinese nationals staying at a hotel in Gorakana on charges of not possessing valid visas to remain in the country. Among the assortment of items seized from the location were 442 mobile phones, three desktop computers, 19 laptops, two video cameras and 115 SIM cards.
The CID is still investigating whether there is a link between the foreigners arrested in Hanwella and Gampaha and those taken into custody during subsequent raids. Initial investigations point to scam camps being operated from all these locations, according to police. Investigators are also examining whether these groups are involved in the recent incidents of financial scams targeting banking customers, which included scammers stealing One Time Passwords (OTPs) of customers.
Large scale “scam camps,” also referred to as “scam farms” or “scam factories” are known to operate in countries such as Myanmar, Thailand, Cambodia, Laos and the Philippines. In such places, many of those working in these camps had been lured there by criminal syndicates who deceive them into believing they are applying for legitimate jobs.
While police have arrested foreigners involved in financial frauds in the country before, it is only this year that authorities started seeing scam camps being operated by foreigners for the first time, Police Spokesman Deputy Inspector General (DIG) Nihal Thalduwa told the Sunday Times. The camps are mostly being operated from small hotels, villas and private business establishments. “The scammers tend to look for smaller hotels or similar places with a small number of staff. They would rent the entire place for an extended period and are willing to pay more than the asking price to persuade the owners to agree.”
He said the several types of scams have been carried out from these camps. The most common one is known as an “investment scam.” These are mainly operated through social media such as Facebook, where victims are persuaded to ‘invest’ in fake projects. As soon as a victim sends the scammers the cash for the ‘investment’, they usually transfer the funds overseas, mostly through cryptocurrencies.
Another type is known as “pig butchering scam.” Here scammers target middle-aged persons through social media and lure them into starting a relationship. They then ask their victims to deposit funds to bank accounts of their choice using various pretexts.
Investigations have revealed that these scammers have targeted victims in Southeast Asian countries such as Indonesia, Thailand and China, as well as some South Asian countries.
Locals, ranging from university students to pensioners have also been targeted, and with millions of rupees already suspected to have been siphoned off overseas, such large scale scams are having a negative impact on the country’s banking system.
While the scams are conducted largely by foreigners, locals have also been roped in as accomplices, for activities such as opening bank accounts, sometimes under the pretext of giving them a loan.
Police have also run into difficulties in their investigations, owing to the language barrier. Most of the data on mobile phones, desktop and laptops used by the foreign suspects are in Chinese. Last month, a team of 10 investigators from China’s Special Criminal Investigation Unit arrived in Sri Lanka to assist the CID in suspected online financial frauds committed by Chinese nationals in Sri Lanka. The team was sent by the Chinese government following a request made through Sri Lanka’s Foreign Ministry. They arrived in the backdrop where Chinese nationals made up more than 70 of the nearly 100 foreign suspects arrested by police from the beginning of this year for alleged online financial fraud.
The best way to prevent such scams is for people to be vigilant, DIG Thalduwa stressed. “If you are the owner of a small hotel and foreigners or locals come and ask you to lease out the entire place to them for an extended period and they are willing to pay more than the asking price, it should immediately arouse suspicion,” he noted. “We recommend the owner or owners to at least include a clause in the lease agreement enabling them to inspect the premises at any given time to check what’s going on. If the owners aren’t doing that, they could also end up facing serious consequences under the law since they’d be allowing their premises to be used to commit crimes.”
He also repeated earlier warnings to the public not to divulge personal information to unauthorised third parties no matter how convincing they may sound. “Don’t give out your OTP. If you have a suspicion regarding any financial matter, reach out to your bank for clarification.” The DIG said banks too should be vigilant regarding suspicious activity and should immediately respond to queries from customers regarding any suspicious activity or clarifications they needed from the banks.
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