Combatting Transnational Telecom Fraud – Manila Standard


By Li Hsi-ho

“The Constitution of the Republic of China (Taiwan) upholds the ideal that national sovereignty belongs to the people and explicitly provides for the protection of people’s rights and freedoms”

The internet is an integral part of everyday life in the post-pandemic world.

Working, studying, shopping and performing other transactions online have become commonplace.

But the digital financial services that have grown out of these activities are an easy target for criminal organizations and have also made criminal investigations more complicated for the police.

In 2021, Taiwan reported fraud-related losses of NT$5.61 billion (approximately US$186 million), indicating that fraud has seriously harmed the national economic development.

There is no doubt that fraud poses a formidable challenge to countries around the world.

In recent years, fraud has become more diverse and sophisticated, and scammers are working in new and ever-changing ways.

Schemes involving cryptocurrency – recently a hot commodity – have inflicted heavy losses on victims.

When Taiwanese police investigate cases, they often encounter difficulties due to the fact that the servers, recipient accounts, and cryptocurrency exchange platforms used by the perpetrators are based overseas.

This prevents officers from stopping the money transfer in time to help victims and makes it harder to find suspects.

The influx of profits from fraud and other illegal activities involves money laundering, tax evasion and other crimes that undermine national financial regulatory systems and erode the sovereign authority of governments.

Police cooperation between Taiwan and other countries would help reduce the number of cases of fraud and contribute to the administrative efficiency of governments around the world.

International cooperation needed

Virtual currencies are a high-risk, high-reward commodity. They have become increasingly popular in investment markets.

Since the average person does not fully understand how virtual currencies work, these investments have become a common instrument of organized fraud.

Taiwanese police recently discovered that money laundering by criminal groups using virtual currencies mainly involves the proceeds of fraudulent investments.

Victims are tricked into registering with a fake investment platform and when they attempt to withdraw funds after making a profit, the customer service system, run by the criminal group, asks them to pay taxes additional 10-20% before withdrawal can be approved. .

Even if the payment is made, the criminal group continues to fabricate further demands for the account to be replenished to cover, for example, transaction fees.

Criminal organizations have changed their tactics from buying mule bank accounts to using virtual currency wallets, reducing the risk of detection by police when funds are withdrawn.

Gangs open fake accounts with virtual money changers, where identity verification procedures are relatively loose.

Once a victim makes a deposit into a designated account, the scammers quickly transfer the money multiple times, eventually transferring it to a cold wallet. It is then transferred to another exchange where it is converted into legal tender.

Crypto wallets that do not require user authentication and have no upper limit for transactions are a handy tool for money laundering.

The victim, the perpetrator and the scene of the crime are usually in different countries.

Thus, transnational cooperation is necessary to effectively suppress the common practice of concealing illegal gains and converting them into legal assets.

Human trafficking

Anticipating that the number of job seekers would increase due to involuntary unemployment caused by the pandemic, criminal organizations set up call centers in various parts of the world and recruited people on a large scale through online advertising. line.

The scammers used attractive slogans such as “easy job” and “quick financial freedom” and promised stable and legal employment in other countries.

Victims only discovered after arrival that the jobs involved fraud or did not meet their expectations.

Some even had their passports confiscated, deprived of their liberty and beaten or sold to other unlicensed companies if they refused to comply.

If they asked to resign, they were forced to pay exorbitant fines or threatened with organ harvesting to compensate the gangs.

Human trafficking is a serious problem that needs to be addressed by the global community. Fraud rings are taking advantage of the convenience of the Internet to recruit people of different nationalities through multiple channels to work in fraudulent call centers around the world.

The Taiwanese police have for a long time spared no effort to crack down on this type of transnational crime.

This year, they have received reports of Taiwanese citizens being detained against their will and coerced into engaging in fraudulent activities in Cambodia, the Philippines, the United Arab Emirates and other countries by illegal organizations established by Taiwanese nationals. Chinese. International cooperation is urgently needed to rescue victims and combat these crimes.

In 2021, Taiwanese and Vietnamese police jointly cracked down on a fraud ring in Taiwan that forced Vietnamese migrants who had overstayed their visas to engage in scams targeting their compatriots.

The racket earned the criminals 3.29 billion VND (equivalent to around US$140,000). In cooperation with other foreign law enforcement agencies, Taiwanese police uncovered several cases of organized crime outside of Taiwan related to cross-border fraud and human trafficking.

They worked with Montenegro in 2020 and with Turkey in 2021 to crack down on organized crime involving perpetrators, victims and locations in multiple countries.

In the joint operation with Montenegro, 92 suspects were arrested for defrauding more than 2,000 victims out of a total of NT$632.78 million (equivalent to approximately US$21 million).

These cases not only highlight the importance of cooperation between countries to fight crime, but also highlight the need for concerted efforts to protect human dignity and values.

Taiwan’s contribution

Taiwan attaches great importance to the rule of law and human rights.

The Constitution of the Republic of China (Taiwan) upholds the ideal that national sovereignty belongs to the people and explicitly provides for the protection of people’s rights and freedoms.

The government strictly prohibits any action that infringes the rights of others. Transnational crime often involves multiple countries and areas, which can hamper investigations. In the post-pandemic world, criminal tactics will continue to evolve and new methods will emerge.

For investigating new forms of criminal activity, experience is invaluable. Taiwan is ready to share its experience in solving crimes.

Today, telecommunications and cyber fraud are conducted across borders and transnational criminal networks are organized and departmentalized.

It challenges the sovereignty of nations and undermines livelihoods, economies and law and order.

Taiwan is keen to share intelligence with partners and help other countries counter threats from abroad and fight organized crime within their borders.

Police officers are entrusted with the heavy responsibility of maintaining public order. Their top priority is to protect people’s lives and property.

As crime has taken on increasingly diverse forms, the police face even greater challenges.

To combat modern crime, law enforcement must fully understand the latest criminal developments so that they can prepare for the future and be ready to respond decisively. Going forward, the Taiwanese police will continue to work with partners around the world.

No place should be overlooked in the fight against the pandemic or the fight against crime. The international community can count on Taiwan.

(Li Hsi-ho is Commissioner, Criminal Investigation Bureau, Republic of China)


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