UN warns of growing criminal threat from Mekong region casinos and SEZs

The unchecked growth of commercial enclaves and freewheeling casinos in and around Laos opens up new money laundering and drug trafficking options for criminal networks using the country to push increasing volumes of narcotics across the country. Asia, warn the United Nations.

As China and Thailand tighten their borders with Myanmar, the United Nations Office on Drugs and Crime says transnational gangs based in the lawless corners of eastern Myanmar are increasingly smuggling methamphetamine to through Laos.

In recent conversations with VOA, UNODC said that special economic zones – with relaxed regulations to attract foreign investors – and the casinos that often anchor them have also become major hubs for trafficking and money laundering. for the criminal networks that inhabit the Mekong countries of Southeast Asia.

The agency has over 140 casinos and 128 special economic zones across the region. Few raise more alarm than the Golden Triangle Special Economic Zone, which takes its name from the crime-ridden border regions where Laos, Myanmar and Thailand meet. The 10,000 hectare strip in northwest Laos is effectively run by Chinese national Zhao Wei, who owns his central Kings Romans casino.

FILE – Roman-like statues of gods are seen outside the Kings Romans casino. (Daniel Scharf/VOA)

“There are many SEZs and autonomous territories with security and crime issues scattered across the Mekong, but the GT SEZ is one of the most prolific and notorious, and Zhao Wei and his group are clearly very well funded and capable. to move money despite the sanctions,” Jeremy Douglas, the UNODC regional representative, told VOA.

The US Treasury Department sanctioned Zhao and his companies in 2018, placing him at the heart of a transnational criminal network laundering money across the economic zone for Myanmar drug lords while trafficking everything, narcotics to people and wildlife.

VOA could not reach Zhao, but he called the allegations unsubstantiated in past media interviews. Neither the Golden Triangle area nor a Lao government spokesperson responded to VOA’s requests for comment.

With Zhao’s business empire still expanding, and other gambling and economic zone projects across Laos underway, UNODC is concerned that the small landlocked country’s role in trafficking and money laundering of money in the region is growing.

Empire building

Undaunted by the sanctions, Zhao’s Dok Ngiew Kham Group is pushing ahead with the construction of an international airport just east of the Golden Triangle area in a joint venture with the Lao government. A $50 million port under construction north of the area will serve cargo ships sailing the Mekong to and from China, courtesy of Osiano Trading, a company other than a local government official told Radio Free Asia in 2020 and that Zhao owns.

Osiano is also developing what he calls on a subsidiary’s website a billion-dollar “cultural park” on the outskirts of Laos’ capital, Vientiane, including a folk village, rides and, reportedly, there, play facilities. Zhao and his team have also made public their visits to northeast and southern Loas over the past few years in search of land for other development projects. Going by the name Chio Wai, an alias listed by the US Treasury Department, Zhao is even named co-director of a recently approved resort project in Cambodia, which granted him citizenship in 2018, according to a royal decree seen by VOA. .

UNODC suspects that much of the Golden Triangle area was developed on laundered drug profits, and says Zhao’s expansion plans there and elsewhere offer new opportunities for laundering. any further. He fears the port and warehouses he is building in the north of the area, just across the Mekong from Myanmar, will also prove ideal for storing and trafficking more of the drugs. which crosses Southeast Asia and goes as far as Australia and Japan.

FILE - A sign in the Thai village of Sop Ruak on the Mekong River in the Golden Triangle region where the borders of Thailand, Laos and Myanmar meet, January 14, 2012.

FILE – A sign in the Thai village of Sop Ruak on the Mekong River in the Golden Triangle region where the borders of Thailand, Laos and Myanmar meet, January 14, 2012.

Others are also worried. Khemmarin Hassiri, who commands the Foreign Affairs Division of the Royal Thai Police, said Thailand also believes the growth of special economic zones and casino towns on its borders with Laos and Myanmar could mean more crime. . Much of the methamphetamine flowing from its neighbors ends up in or passes through Thailand.

“If there is something to facilitate illegal activities, especially for drug trafficking, we will put that on our agenda,” he told VOA.

“These are very well-known areas for drug trafficking in the past,” he said of the border regions and their economic zones. “But right now they have everything – they have drugs, they have human trafficking, they have…communication fraud, they have online gambling.”

Frontier region casinos have been attracting gamblers for decades, mostly from China, where gambling is mostly banned. Border closures and travel restrictions that followed the COVID-19 outbreak, however, caused their foot traffic to plummet, sparking a surge of online gambling sites to compensate.

Khemmarin said the number of online sites targeting Thais inside and outside the country has more than doubled since the start of the pandemic. UNODC says the number of sites in Thailand alone, where most gambling is also banned, rose from 240 to 558 between 2019 and 2021.

FILE - The Blue Shield casino operated by Kings Romans Group sits in the Golden Triangle Special Economic Zone on the banks of the Mekong River in Laos near the Laos-Myanmar-Thailand border, March 2, 2016.

FILE – The Blue Shield casino operated by Kings Romans Group sits in the Golden Triangle Special Economic Zone on the banks of the Mekong River in Laos near the Laos-Myanmar-Thailand border, March 2, 2016.

Go digital

The UN and Thai police both say it also opens the door to more criminal activity.

“Casinos are great for moving and hiding money, and even better if they’re both a traditional casino that regular players and VIPs go to as well as online,” Douglas said. “They are well known for moving unaccounted money, and online they can work with anonymous payment systems and cryptocurrencies, and together they have the ability to mix and legitimize money incredibly quickly. .”

Reports over the past month that the Lao government has granted a private company, the Laos Offshore Gaming Authority, the authority to begin licensing online gambling sites in Laos have heightened those fears. As Lao citizens are banned from gambling in Laos, sites will target foreign customers.

Khemmarin said the company “would pose a threat to the Thai people”, that the Thai government was “very concerned” about it and would soon raise the issue with Laos.

Casino towns in the Mekong region have also turned into hotbeds of human trafficking, with criminal networks luring or smuggling young men and women across borders on the promise of well-paying gambling jobs, then imprisoning them in prison-like complexes to run online scams targeting other countries.

Cambodia has become the latest epicenter of these projects. However, with the country now cracking down on its own online casinos, UNODC says their operators may start moving to Laos.

FILE - A Chinese restaurant, hotel and casino are seen in Preah Sihanoukville province, Cambodia September 27, 2017.

FILE – A Chinese restaurant, hotel and casino are seen in Preah Sihanoukville province, Cambodia September 27, 2017.

Yosson Ruangsunngamsiri, a human trafficking officer at Thailand’s Department of Special Investigations, which deals with transnational crime, told VOA he has already seen an increase in the trafficking of Thais to Laos. The Thai government issued a public notice in March urging citizens not to accept irregular work in the Golden Triangle area in particular. Khemmarin said Thai authorities are actively investigating a property inside the area suspected of trafficking Thais into the area for online scams and sending the profits to Myanmar.

UNODC urges governments to pay more attention to the growing criminal activity swirling around their countries’ casinos and special economic zones, and to develop new plans and pass tougher laws to tackle the problem.

“Governments and the region have only recently started discussing this with us and this is only the beginning, but they need to take it more seriously and be candid with each other quickly,” Douglas said.

“But in addition to acknowledging that they need to do something about casino risk and organized crime, the region needs to step up and take real action to tackle the known criminals who are involved – essentially cleaning up the industry before it doesn’t do any more damage.”

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