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The ‘scamdemic’ costing Australians billions · The Front

• 0:03
  Speaker 1: From The Australian. Here's what's on the front. I'm Christinamio.
• 0:07
  Speaker 1: It's Monday, May twenty. Voters aren't convinced by the Treasurer's
• 0:14
  Speaker 1: promise that the government's big spending budget, handed down last
• 0:17
  Speaker 1: Tuesday won't push up inflation. That's according to new data
• 0:22
  Speaker 1: from Newspoll. Less than a third of people believe they'll
• 0:25
  Speaker 1: be better off even with energy subsidies, tax cuts and
• 0:28
  Speaker 1: rent assistance. You can read our experts analysis of the
• 0:32
  Speaker 1: latest Newspoll results at the Australian dot com dot au.
• 0:38
  Speaker 1: Save your money. That's the recommendation of a high ranking
• 0:41
  Speaker 1: United States Navy official, Gloria at Valdez, says the government's
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  Speaker 1: five billion dollar planned upgrades to the Australian Navy's aging
• 0:48
  Speaker 1: Colins class submarines has never been attempted and it could
• 0:52
  Speaker 1: leave us vulnerable if it doesn't work out. Australia's corporate
• 0:59
  Speaker 1: regulator to notify thirty four thousand scam victims of their predicament.
• 1:04
  Speaker 1: That's despite a heads up from international law enforcement agencies
• 1:07
  Speaker 1: almost a year ago. It follows an investigation by The
• 1:11
  Speaker 1: Australian which revealed weaknesses in our banking and government regulations
• 1:15
  Speaker 1: make Australians easy targets for Southeast Asian scam factories. That's
• 1:19
  Speaker 1: today's episode. A warning before we start. This episode contains
• 1:31
  Speaker 1: mention of torture, physical violence and sexual exploitation. Not too
• 1:40
  Speaker 1: long ago, the marriage of a South Australian public servant
• 1:43
  Speaker 1: where calling John hit a rough patch. It was during
• 1:46
  Speaker 1: that time that he received a Facebook friend request from
• 1:49
  Speaker 1: an attractive Ukrainian woman named Vira. She told him she
• 1:54
  Speaker 1: was recently single and living on the Sunshine Coast where
• 1:57
  Speaker 1: she ran a business importing kid's clothing. After a couple
• 2:01
  Speaker 1: of days, the conversation moved to WhatsApp. It's an encrypted
• 2:05
  Speaker 1: messaging platform, meaning sensitive information can be exchanged more freely.
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  Speaker 1: Vera asked John if he had any interest in cryptocurrency.
• 2:13
  Speaker 1: As it happened he did. He'd recently invested a bit
• 2:16
  Speaker 1: of money on a legitimate crypto trading site called coinspot.
• 2:21
  Speaker 1: With Vera's encouragement, John opened a new crypto trading account
• 2:24
  Speaker 1: on a different website, and this time he went big.
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  Speaker 1: Within twenty days, he'd poured more than two hundred thousand
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  Speaker 1: dollars into the scheme. All of the cash he and
• 2:35
  Speaker 1: his wife had saved up over several years to buy
• 2:38
  Speaker 1: a house. It was only when he tried to withdraw
• 2:41
  Speaker 1: his money that John realized he'd been duped. We've all
• 2:49
  Speaker 1: heard enough scam horror stories to know where this story ends.
• 2:53
  Speaker 1: There was no Verra. She was concocted by a team
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  Speaker 1: of scammers running countless similar scams somewhere in Asia.
• 3:01
  Speaker 2: That is still an active profile, and I can see
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  Speaker 2: from that profile it is still drawing new people in.
• 3:09
  Speaker 1: Amanda Hodge is The Australian's Southeast Asia correspondent.
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  Speaker 3: So anyone out there, if you're in contact with Vera Pittskaya,
• 3:17
  Speaker 3: I suggest you block her now because it's a real worry.
• 3:23
  Speaker 1: It's called pig butchering by those in the business. Just
• 3:27
  Speaker 1: like pigs being fattened for slaughter. Victims are slowly, expertly
• 3:31
  Speaker 1: lured into a false sense of confidence by their new
• 3:34
  Speaker 1: online love interest, then they go in for the kill.
• 3:39
  Speaker 1: Southeast Asia is quickly becoming the pig butchering capital of
• 3:42
  Speaker 1: the world, with countless scam factories targeting thousands of people
• 3:46
  Speaker 1: online every year. To say it's a big problem would
• 3:50
  Speaker 1: be an understatement. Experts estimate scamming is now the third
• 3:54
  Speaker 1: biggest economy in the world, behind the United States and China,
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  Speaker 1: bringing in trillions of dollars every year, and Australians like
• 4:03
  Speaker 1: John are increasingly being targeted because our banking and government
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  Speaker 1: regulations are easier to get around than those in place
• 4:09
  Speaker 1: in the US or Europe. One form of scammer Amanda
• 4:13
  Speaker 1: spoke to on a recent trip to King's Romans in
• 4:15
  Speaker 1: Northern Laos made it crystal clear this is by design.
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  Speaker 4: Because the bearing system and the government they make us
• 4:27
  Speaker 4: too easier than Europe. At the office, they said, like
• 4:32
  Speaker 4: America is dumb and more change more expert to scam
• 4:38
  Speaker 4: Australian because they are more smarter than America.
• 4:44
  Speaker 1: If Australian authorities are aware of the extent of the problem,
• 4:47
  Speaker 1: it's not clear what they're doing about it.
• 4:50
  Speaker 2: My understanding is they haven't quite pivoted towards scamming it.
• 4:54
  Speaker 2: They're so heavily focused on transnational drug syndicates, which is
• 4:59
  Speaker 2: fair enough and has been the biggest issue in this
• 5:01
  Speaker 2: region for a long time. But this is now the
• 5:03
  Speaker 2: priority and I don't think they've been fast enough to pivot.
• 5:07
  Speaker 3: That's my understanding. I wanted to check with them.
• 5:09
  Speaker 2: Unfortunately, the interview with the Australian Federal Police was canceled
• 5:13
  Speaker 2: and they had a series of written questions they undertook
• 5:16
  Speaker 2: to provide answers before publication, and they didn't. I was,
• 5:20
  Speaker 2: to be honest, quite surprised and disappointed.
• 5:24
  Speaker 1: The Australian's National Crime correspondent, David Murray is reporting today
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  Speaker 1: the Australian Securities and Investments Commission has been accused of
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  Speaker 1: dropping the ball on an international scam syndicate that cost
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  Speaker 1: Ossie's more than two hundred million dollars. A German police
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  Speaker 1: representative told Dave they alerted the corporate regulator to the
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  Speaker 1: scam in June of last year and they provided the name,
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  Speaker 1: contact details and financial losses of thirty four thousand Australians
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  Speaker 1: who fell victim to it, but ask has yet to
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  Speaker 1: make contact with any of them. It all begins with
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  Speaker 1: the handing back of Hong Kong and the famed gambling
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  Speaker 1: enclave of Macau to China.
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  Speaker 2: So it cracked down very hard on money laundering around
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  Speaker 2: twenty nineteen, and it also made an example of a
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  Speaker 2: couple of very big Chinese casino kingpins who are now
• 6:16
  Speaker 2: in jail, so that those anti money laundering measures caused
• 6:21
  Speaker 2: a flight of casinos and casino kingpins and crime syndicates
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  Speaker 2: out of Macau, and they were looking for more permissive
• 6:29
  Speaker 2: environments and they found more than they needed in Southeast
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  Speaker 2: Asia exactly because of these underregulated special economic zones like
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  Speaker 2: the Golden Triangle. These are all notorious enclaves that have
• 6:42
  Speaker 2: attracted huge amounts of Chinese money, a lot of it elicit,
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  Speaker 2: and of course the criminal syndicates behind those money flows
• 6:51
  Speaker 2: are also now deeply embedded into those economies, into the
• 6:56
  Speaker 2: politics of those areas as well.
• 6:59
  Speaker 1: And then pandemic.
• 7:01
  Speaker 2: So the pandemic forced these casinos online, and they had
• 7:05
  Speaker 2: this fantastic new market, because so did everyone else.
• 7:08
  Speaker 3: When the pandemic.
• 7:10
  Speaker 2: Closed borders forced people to stay at home.
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  Speaker 3: What else was there to do?
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  Speaker 2: We all did the same thing, right, We had our
• 7:17
  Speaker 2: work meetings, our social gatherings on zoom.
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  Speaker 3: These criminal syndicates.
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  Speaker 2: Found that they could reach so many other people as well.
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  Speaker 3: I think people were.
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  Speaker 2: Vulnerable because they felt lonely and maybe more amenable to
• 7:32
  Speaker 2: those kind of strange, spontaneous approaches that most of us
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  Speaker 2: would normally be suspicious about.
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  Speaker 3: And so you know, here was this amazing new.
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  Speaker 2: Market, and they already had the tools to reach them
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  Speaker 2: through the online gambling networks, they had the money laundering networks.
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  Speaker 2: They suddenly had the cryptocurrency platforms, and tens of millions
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  Speaker 2: of fake cryptocurrency platforms have since been created just for
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  Speaker 2: this purpose, to be funnel money, not only as a
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  Speaker 2: sort of draw card for people who are interested in
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  Speaker 2: making quick money out of cryptocurrency, but as a way
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  Speaker 2: of laundering that money, you know, through the system, because
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  Speaker 2: once it's in a cryptocurrency account, it's gone.
• 8:17
  Speaker 1: Many experts believe China is the only country with the
• 8:20
  Speaker 1: resources and a regional influence to really tackle the so
• 8:23
  Speaker 1: called scamdemic, and that puts Australian authorities in a tough spot.
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  Speaker 1: See the unique geopolitics of our region makes clamping down
• 8:32
  Speaker 1: on cyber scams just that bit harder. Our relationship with
• 8:36
  Speaker 1: China is out of the freezer, but it's not yet
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  Speaker 1: fully thawed, and tensions over China's rising influence in the
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  Speaker 1: Pacific means progress is slow. So what do we do.
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  Speaker 2: It's a really tricky question because the things I'm hearing
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  Speaker 2: from regional experts point to the fact that the geopolitics
• 8:53
  Speaker 2: is really getting in the way of what needs to
• 8:56
  Speaker 2: be an international cooperative effort.
• 8:58
  Speaker 3: There's no other way to get around this, right.
• 9:01
  Speaker 2: Cooperation between China, the US and Australia has in the
• 9:04
  Speaker 2: past busted some of the biggest drug syndicates operating in
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  Speaker 2: Southeast Asia, but those days of cooperation are.
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  Speaker 3: Gone for the moment.
• 9:13
  Speaker 2: And the other complication is that for China, this is
• 9:16
  Speaker 2: a tricky one because it's embarrassing for China as well.
• 9:19
  Speaker 2: Right China is doing quite a bit to protect its
• 9:24
  Speaker 2: own citizens. It's deporting Chinese workers, whether they have been
• 9:29
  Speaker 2: compelled or not, because it is putting pressure on countries
• 9:32
  Speaker 2: like Me and Myra in particular, but it is not
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  Speaker 2: really doing anything about scam compounds. Once they stop targeting
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  Speaker 2: Chinese citizens and once they stop trafficking Chinese scam workers.
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  Speaker 2: China is the economic giant in the region. If it
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  Speaker 2: wanted to clamp down on this, it really could, but
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  Speaker 2: it's really only interested in making sure it doesn't hurt
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  Speaker 2: its own citizens right now. From China's perspective, Beijing's perspective,
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  Speaker 2: it probably doesn't see a lot of upside in troubling
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  Speaker 2: itself with trying to clap down for the benefit of
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  Speaker 2: Western powers that aren't playing ball.
• 10:15
  Speaker 1: Coming up why the people on the other side of
• 10:18
  Speaker 1: the scam can be victims too. Our foreign correspondents do
• 10:21
  Speaker 1: this kind of in depth reporting and analysis every day,
• 10:24
  Speaker 1: and subscribers to The Australian get unlimited access to their
• 10:28
  Speaker 1: insights and expertise. Check us out at the Australian dot
• 10:31
  Speaker 1: com dot au. We'll be back after this break. Policing
• 10:50
  Speaker 1: international scams is a double edged sword because some of
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  Speaker 1: the people running the cons aren't there of their own
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  Speaker 1: free will. Many are trafficked into the so called scam
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  Speaker 1: factories by recruiters. They know they're soul dreams of well
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  Speaker 1: paid jobs at reputable companies, but the reality is more
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  Speaker 1: like a nightmare. New recruits to the compounds operating inside
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  Speaker 1: special economic zones dotted around Southeast Asia are indoctrinated through
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  Speaker 1: so called scam universities. It's a training program in which
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  Speaker 1: they're taught the ins and outs of the Australian banking
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  Speaker 1: system and culture. Things go downhill from there. What you're
• 11:28
  Speaker 1: hearing is a scammer being viciously attacked for their on
• 11:31
  Speaker 1: the job performance. Many scammers just like them are physically
• 11:36
  Speaker 1: and financially trapped by their employers, who force them to
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  Speaker 1: work seven days a week and demand they pay debts
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  Speaker 1: in the thousands of dollars if they want to leave.
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  Speaker 1: Those who refuse to work are beaten, tortured, and raped.
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  Speaker 1: Some are electrocuted and others are sexually exploited. They're routinely
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  Speaker 1: deprived of food and sleep, sometimes both, and they're increasingly
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  Speaker 1: lured to the scam factories from as far away as
• 12:00
  Speaker 1: South America, East Africa, and even Western Europe. More often
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  Speaker 1: than not, their passports are confiscated, making leaving virtually impossible.
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  Speaker 3: It's completely altered their lives. In many cases, it's ruined
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  Speaker 3: their lives.
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  Speaker 2: Young people in particular, who have finished their education, often
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  Speaker 2: university educations, quite fluent in English, computer literate, very smart
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  Speaker 2: young people, but facing unemployment rates within their age groups
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  Speaker 2: of twenty twenty five percent, no chance of getting a job,
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  Speaker 2: looking for a way out of what looks very much
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  Speaker 2: like a dead end, and so they too were incredibly vulnerable,
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  Speaker 2: particularly because these jobs sounded so great, they were paying
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  Speaker 2: so much more, and in sadly actually so many cases,
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  Speaker 2: the job prospects were being reinforced by people they knew
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  Speaker 2: who were recruiting them because they were getting a bonus
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  Speaker 2: and maybe that was their ticket out too, so it's
• 13:01
  Speaker 2: just this terrible, vicious cycle.
• 13:08
  Speaker 1: Amanda Hodge is The Australian's Southeast Asia correspondent. You can
• 13:14
  Speaker 1: read her full investigation into the region's scam factories, as
• 13:17
  Speaker 1: well as additional reporting by National Crime correspondent David Murray,
• 13:20
  Speaker 1: right now at the Australian dot com dot au