Scambodia: Insiders Reveals How Major Money Laundering Network Gets Away With It

Every few weeks, fireworks explode across the night sky in Cambodia. These displays, however, are not festive celebrations or cultural ceremonies. Rather, they are the bold salutes of online scammers marking their most lucrative swindles – each colorful burst signaling the a successful operation on an unsuspecting target.

Victims worldwide lose tens of billions of dollars annually to scams involving romance fraud, fake cryptocurrency platforms, and investment hoaxes. Once stolen, the money disappears quickly, funnelled into a complex international money-laundering network designed to swiftly erase any trace of its illegal origins. Authorities across the globe—including the FBI, China’s Ministry of Public Security, and Interpol—have tried repeatedly to curb this phenomenon. Telecom companies block suspicious numbers, banks issue urgent warnings, and law enforcement agencies execute raids. Yet the scams continue, resilient as ever, according to some actual journalism by the NY Times.

Transactions within this network are predominantly denominated in Tether, which allows scammers to swiftly move money across borders and through a web of intermediaries known as “money mules,” obscuring its illicit origins.

The Cambodian capital of Phnom Penh, and coastal city Sihanoukville serve as global hubs for these sophisticated money-laundering operations. In Phnom Penh, a sprawling financial conglomerate called Huione Group presents itself as a reputable enterprise with legitimate commercial activities across Southeast Asia. Huione’s recognizable QR codes are everywhere in Cambodia, facilitating transactions at hotels, supermarkets, and restaurants. Its advertisements line highways, highlighting services ranging from banking to insurance.

Integral to the money laundering operations are individuals called “matchmakers,” trusted intermediaries who connect scammers to money mules. These mules manage the bank accounts or cryptocurrency wallets that swiftly funnel the stolen funds. Transactions are strategically divided into amounts below reporting thresholds such as $10,000, and moved quickly, often converted into Tether within hours or days, greatly complicating law enforcement’s ability to trace the money’s path.

The network profits at every step. Huione affiliates earn fees for escrow services and charge for advertisements and transactions conducted on their platforms. Remarkably, this marketplace has even launched its own cryptocurrency, further facilitating illicit financial flows.

Documents reviewed in the investigation detail a highly organized system operated by a Huione affiliate known as Huione International Pay. Based at the conglomerate’s Phnom Penh headquarters, departments within this affiliate meticulously track mule accounts in numerous countries, manage customer relations with scammers, and actively monitor relevant online platforms like Telegram.

The scale of this criminal enterprise is staggering. Analytics firms Elliptic and Chainalysis have traced approximately $26.8 billion in cryptocurrency transactions since 2021 back to the illicit marketplace run by Huione affiliates. One Telegram channel alone, aptly named “Demand and Supply,” had over 400,000 active users exchanging hundreds of daily messages about money-laundering services before being shut down briefly by Telegram after an inquiry. Within a week, another nearly identical channel emerged, quickly amassing around 250,000 members.

Although Huione Guarantee, the affiliate originally hosting the marketplace, publicly denied affiliation with the broader Huione conglomerate – going so far as to change its name – the marketplace nonetheless identified Huione Group as one of its “strategic partners and shareholders.”

Operating openly in Cambodia, Huione companies benefit from weak enforcement and ambiguous corporate structures, along with significant political connections. Notably, Hun To, a cousin of Cambodia’s prime minister, serves as a director at a Huione company. Such connections contribute to the network’s apparent impunity. John Wojcik, a threat analyst with the United Nations Office on Drugs and Crime, explained: “The reality is even if Huione were dismantled, competitors would quickly replace it. We can already see competitors now positioning themselves.”

Cambodian regulators recently refused to renew the license for Huione’s payment service, citing its failure to “meet the renewal requirements.” In response, Huione immediately announced intentions to register new operations internationally, targeting jurisdictions like Japan and Canada. Cambodian regulators insist they are committed to ensuring financial transparency and safety, pledging cooperation with global anti-money laundering standards.

When problems arise – if a mule is caught or decides to run away with the money – a matchmaker arbitrates disputes, protecting scammers through deposits held in escrow by Huione affiliates. Profits flow through the system at every step, benefiting Huione’s operations and fueling expansion into luxury goods, property, and, notably, extravagant fireworks displays.

The human cost behind these operations is considerable. Many scammers themselves are victims of human trafficking, coerced into conducting fraud under threat of violence or captivity. Captive employees live in fortified compounds, forced to spend earnings in company-controlled establishments, including restaurants, casinos, and brothels. A secondary industry flourishes alongside, with sophisticated websites and applications built by software developers, stolen data purchased from thieves, and even attractive models paid to persuade potential victims via manipulated video calls.

Despite international investigations, temporary shutdowns of online channels, and occasional arrests, the industry adapts and thrives. Scammers maintain professionalism reminiscent of large corporations, managing employees, human resources departments, and extensive infrastructure.

With each stolen dollar meticulously laundered and eventually reintegrated into legitimate economies around the world, the cycle remains difficult – nearly impossible – to break. As long as billions of illicit dollars continue to flow through Cambodia’s opaque financial networks, the scammers’ fireworks over Phnom Penh will continue, illuminating nights already heavy with human misery and lost fortunes.