Sri Lanka emerging as a new base for Asia’s scam networks

Bloomberg - The crackdown on scam compounds in Cambodia is leading some gangs to relocate to beach resorts and office buildings in Sri Lanka, in what may be the next phase of one of the world’s fastest-growing criminal industries.

A combination of visa-free travel, available building space, relatively strong telecommunications networks and a well-established informal money transfer system make the South Asian island nation an appealing destination for scammers, investigators say.

Authorities in Sri Lanka have set up a new cybercrimes unit and say they’ve arrested more than 1,000 people this year alone, most in western beach areas where tourists flock or in the capital, Colombo. “Police, along with the immigration department and the central bank, are working as a collective effort to see that this is being controlled,” said assistant police superintendent Fredrick Wootler. 

Still, observers say the country has a brief window to get its arms around what are fast-moving and increasingly sophisticated operators. “In Sri Lanka there are issues with implementing our laws, the fact that we don’t necessarily crack down on these companies – they simply use tourist visas,” Dilrukshi Handunnetti, director at the Centre for Investigative Reporting Sri Lanka, said.

When officers descended on one west coast property in April, they found more than 150 foreign nationals allegedly running a cyber-scam operation. Days later, police raided a multistory apartment building near Colombo and arrested another 120 foreign nationals.

As authorities step up the pressure, some operators appear to be shifting from large compounds to hotels, apartment buildings and office space that can be rented quickly and abandoned just as fast.

A report by a US congressional committee in July last year warned fraud networks appear to be relocating into environments marked by “regulatory stress” – jurisdictions with weak enforcement capabilities but strong digital infrastructure. 

Some of the suspected centres in Sri Lanka may be staffed by escapees from Southeast Asia’s scam centres who, with limited alternate work opportunities, are choosing to put their newfound skills to use, scam investigators said. 

Sri Lanka’s ascendancy reflects a broader pattern of scam operations that are appearing far beyond their traditional strongholds in places like the United Arab Emirates, Timor-Leste, Fiji and parts of Africa, raising concerns transnational gangs are becoming increasingly global.