UN report shines light on global online scam syndicates

The progress being made in disrupting the ability of cybercriminal syndicates to perpetuate online fraud is starting to have, for better or worse, an effect.

The United Nations issued a report that notes that as more operations of the cybercriminal syndicates the perpetrate these types of crimes are disrupted in countries such as Cambodia, Laos, Myanmar and the Philippines, syndicates are responding by both moving operations to areas where the ability to enforce laws isn’t nearly as robust as it might be in a major city.

At the same time, the report noted that these groups are also moving operations into different regions, such as South America and the Middle East, in response to crackdowns and a desire to expand global operations.

In total, the report estimates cybercriminal syndicates that launch various types of online scams generated approximately $40 billion in annual profit. According to the UN report, at the core of those operations are industrial scale cyber-enabled fraud and scam centers, driven by sophisticated transnational syndicates and interconnected networks of money launderers, human traffickers, data brokers, and a growing number of other specialist service providers and facilitators.

Additionally, these syndicates now operate illicit online marketplaces across Southeast Asia, which in addition to expanding the scope of the fraud being perpetrated are also now used to launder money by circumventing formal financial systems. The UN report, for example, identifies Huione Guarantee, recently rebranded Haowang, as one of the world’s largest illicit online marketplaces. Headquartered in Phnom Penh, Cambodia, the predominantly Chinese language platform has grown to more than 970,000 users and thousands of interconnected vendors. The U.S. is now moving to cut that group’s access to the U.S. financial system for allegedly laundering billions of dollars in cryptocurrency for cybercriminal syndicates such as the Lazarus Group based in North Korea. It’s also conceivable in the current political climate that at some point countries that are perceived to not be doing enough to restrict illicit online marketplaces might one day find themselves subject to hefty tariffs.

The cyber syndicates to launch these attacks are leveraging the skills of individuals that are either willingly accomplices or are being forced to craft, for example, romance scams of lonely individuals who are susceptible to the entreaties of someone that is trying to drain their life savings.

More challenging still, these types of online scams are growing in sophistication. As generative artificial intelligence (AI) tools become more accessible, cybercriminal syndicates are using them to craft better honed cyberattacks that have fewer flaws that might raise suspicions.

The UN is calling for not just increased awareness of the activities of these syndicates but also stronger financial regulations to rescue money laundering and providing law enforcement agencies around the world with the technologies and training needed to better identify these types of transactions.

It may take a while for any such coordinated effort to have a material impact, but it’s clear cybercrime syndicates are taking advantage of the destitution of local communities to provide them with the labor needed to perpetuate online scams at levels of scale that not too long ago would have seemed unimaginable. The challenge and the opportunity now are to not just penalize syndicates and any government that provides a base for their operations, but also promote a level of prosperity that makes it far less attractive for anyone to ever want to get involved in the first place.