UNODC estimates financial losses from fraud in East and Southeast Asia to be between $18 billion and $37 billion in 2023

The UN Office on Drugs and Crime (UNODC) on Monday estimated financial losses of $18 billion to $37 billion from scams against victims in East and Southeast Asia in 2023 alone, with a large portion of those losses attributable to scams by organized crime groups is attributed to Southeast Asia.

UNODC said in its latest report that Asian crime syndicates have integrated new service-based business models and technologies such as malware, generative artificial intelligence (AI) and deepfakes into their operations, while establishing new underground markets and cryptocurrency solutions for their money laundering needs.

“Organized criminal groups are converging and exploiting vulnerabilities, and the evolving situation is quickly exceeding the capacity of governments to contain them,” said Masood Karimipour, UNODC Regional Representative for Southeast Asia and the Pacific.

“Criminal groups are taking advantage of technological advances and producing fraud, money laundering, underground banking and online fraud on a larger scale and more difficult to detect.

“This has led to the emergence of a criminal services economy, and the region has now become an important testing ground for transnational criminal networks seeking to expand their influence and diversify into new business areas,” he added.

The report also details recent cases that show how under-regulated online gambling platforms and increasingly high-risk and often unauthorized Virtual Asset Service Providers (VASPs), which have proliferated in recent years, are being used by major organized crime groups to move billions , launder and integrate Criminals enter the financial system without accountability.

The cases examined also highlight how illegal online casino operators have diversified their businesses to include cyber fraud and crypto-based money laundering services. Extensive evidence shows that organized crime uses influence within casino campuses, special economic zones and border areas to conceal illegal activities.

“It is more important than ever for governments to recognize the severity, scale and scope of this truly global threat and to prioritize solutions that address the rapidly evolving criminal ecosystem in the region,” Karimipour added.

Through human trafficking for coercive crime, organized crime groups regularly force thousands of workers to pry victims from illegal fraud centers, often luring them to these centers with fake job advertisements.

The report also notes an increase in AI-driven crimes related to deepfakes, driven by a more than 600 percent increase in mentions of deepfake-related content targeting criminal groups in Southeast Asia on monitored online platforms in the first half of the year will be occupied in 2024.

“The integration of generative artificial intelligence by transnational criminal groups involved in cyber fraud is a complex and alarming trend observed in Southeast Asia and represents a powerful force multiplier for criminal activity.”

“These developments have not only expanded the scope and efficiency of cyber fraud and cybercrime; They have also lowered the barriers to entry for criminal networks that previously lacked the technical skills to employ more sophisticated and profitable methods,” said John Wojcik, UNODC regional analyst.

The report, titled “Transnational Organized Crime and the Convergence of Cyber-Enabled Fraud, Underground Banking, and Technological Innovation: A Shifting Threat Landscape,” is the second in a series of ongoing UNODC threat assessments.

It is noted that the new technical policy brief describes the mechanisms, intricacies and drivers of transnational organized crime convergence in Southeast Asia.

It was developed through extensive review and analysis of criminal complaints, case files, court records, related public disclosures and other data collected in consultation with authorities and partners over several years.

Its development included a comprehensive mapping and analysis of thousands of so-called “gray and black business” online groups, including clear web and dark web forums and marketplaces, that are explicitly used for illegal activities.

Building on the ASEAN Regional Cooperation Roadmap to Combat Transnational Organized Crime and Human Trafficking Related to Casinos and Fraud Operations in Southeast Asia, the study also provides a list of recommendations to strengthen knowledge and awareness, legislation and policy, and enforcement and regulatory responses in the region to help governments deal with the situation.

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