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

The UN Office on Drugs and Crime (UNODC) on Monday estimated financial losses of between $18 billion and $37 billion from scams targeting victims in East and Southeast Asia alone in 2023, with much of these losses attributed to fraud perpetrated by organized crime groups. in Southeast Asia.

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

“Organized crime groups are converging and exploiting vulnerabilities, and the evolving situation is rapidly outpacing the ability of governments to contain it,” said Masood Karimipour, UNODC Regional Representative for Southeast Asia and the Pacific.

“By taking advantage of technological advances, criminal groups are producing larger-scale and harder-to-detect fraud, money laundering, underground banking and online scams.

“This has led to the creation of a criminal services economy, and the region has now become a major testing ground for transnational criminal networks looking to expand their influence and diversify into new industries,” he added.

The report also outlines recent cases showing how under-regulated online gambling platforms and increasingly risky and often unauthorized virtual asset service providers (VASPs) that have proliferated in recent years are being used by major organized crime groups to move, launder and integrate billions criminal proceeds enter the financial system without accountability.

The cases examined also show how illegal online casino operators have diversified their business activities to include cyber fraud and cryptocurrency-based money laundering services. Extensive evidence shows the influence of organized crime within casino complexes, special economic zones and border areas to conceal illegal activities.

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

Through human trafficking for coerced crime, organized crime groups regularly coerce thousands of workers to defraud victims through illegal scam complexes, often tricking them into these centers with fake job offers.

The report also finds an increase in AI-driven crimes involving deepfakes, evidenced by a more than 600 percent increase in mentions of deepfake-related content targeting criminal groups in Southeast Asia on controlled online platforms in the first half of 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 one that represents a powerful force multiplier for criminal activity.

“These developments have not only increased 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 exploit 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 threat assessments produced by the UNODC.

It is noted that the new technical policy note describes the mechanisms, intricacies and driving forces behind the convergence of transnational organized crime in Southeast Asia.

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

Its development involved extensive mapping and analysis of thousands of so-called ‘gray and black business’ online groups, including clear web and dark web forums and marketplaces used explicitly for illegal activities.

Building on the ASEAN Regional Cooperation Roadmap to Address Transnational Organized Crime and Human Trafficking Related to Casinos and Fraud Operations in Southeast Asia, the study also provides a list of recommendations aimed at strengthening knowledge and awareness, legislation and policy, and enforcement and regulatory responses. in the region, aimed at helping governments tackle the situation.

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