Banks (Page 12)

The large, beautiful structures that emerge from the meadows on the Myanmar part of the Moei creek are so jarring that you find yourself squirming to make sure you haven’t imagined them.

Eight years ago there was nothing over there in Karen State. A long-running legal war and a few roughly-built concrete structures have made this region of Myanmar one of the poorest places on earth, all combined with trees. But now, on this area along the border with Thailand, a little town has emerged like a dream. It is known as the Golden Raintree or Shwe Kokko.

It is accused of being a city built on schemes, home to a profitable yet lethal connection of scams, money-laundering and human trafficking. She Zhijiang, the person responsible for it, is awaiting extradition to China while he is imprisoned in Bangkok.

But Yatai, She Zhijiang’s firm which built the city, paints a very unique perspective of Shwe Kokko in its promotional videos – as a resort town, a healthy holiday destination for Taiwanese tourists and shelter for the super-rich.

Shwe Kokko’s story is also one of the unbridled ambition that has swept away from China in recent years.

She Zhijiang dreamed of building this glittering city as his ticket out of the shadowy world of scams and gambling which he inhabited.

But by aiming so high, he has attracted Beijing’s attention, which is now eager to stop the fraudulent activities along the Thai-Myanmar border, which are increasingly targeting Chinese citizens.

Publicity about the scams is also hurting Thai tourism – Thailand is shutting down power to compounds over the border, toughening its banking rules and promising to block visas for those suspected of using Thailand as a transit route.

Shwe Kokko has been stranded in Myanmar’s post-coup, war-ravaged country, unable to attract the investment and visitors it needs to continue.

Yatai is trying to fix the city’s sinister image by allowing journalists to see it, holding out hope that more favourable reporting might even get She Zhijiang out of jail.

So they sent the BBC to Shwe Kokko.

Finding the location is challenging.

Ever since construction began in 2017, Shwe Kokko has been a forbidden place, off-limits to casual visitors.

Access became even more difficult as the civil war in Myanmar grew even more after the military coup in 2021. It takes three days from the country’s commercial hub Yangon – through multiple checkpoints, blocked roads and a real risk of getting caught in armed skirmishes. Crossing Thailand takes only a few minutes, but careful planning is required to avoid Thai police and army patrols.

She Zhijiang’s colleagues took us on a tour, highlighting the newly-paved streets, the luxury villas, the trees–” Mr She believes in making a green city”, they told us. Wang Fugui, who claimed to be a former police officer from Guangxi in southern China, was our guide. He ended up in prison in Thailand, on what he insists were trumped-up fraud charges. He became one of his most dependable lieutenants there after getting to know She Zhijiang.

At first glance, Shwe Kokko has the appearance of a provincial Chinese city. There is a constant procession of Chinese-made construction vehicles going to and from building sites, and the signs on the buildings are written in Chinese characters.

Yatai is vague about the tenants of all its buildings, as it is about many things. They told us that “rich people from many nations rent the villas.” And what about the businesses? ” Many businesses. Hotels, casinos”.

However, the majority of the people we saw were local Karen, who are one of the ethnic minorities in Myanmar, who visit Shwe Kokko daily for work. We saw very few of the overseas visitors who are supposed to be the customers of the hotels and casinos.

Yatai claims Shwe Kokko has stopped a number of scams. It has put up huge billboards all over town proclaiming, in Chinese, Burmese and English, that forced labour was not allowed, and that “online businesses” should leave. However, local people quietly informed us that the scam business was still operating.

Starting a decade ago in the unchecked frenzy of Chinese investment on the Cambodian coast, then moving to the lawless badlands of Myanmar’s border with China, the scam operators have now settled along the Thai-Myanmar border. The Myanmar military and a roiling gang of rebel armies and warlords are battling it out for control of Karen State around them.

The scams have grown into a multi-billion dollar business. They involve tens of thousands of workers who are kept in locked-down buildings where they defraud people all over the world of their savings.

Some work there willingly, but others are abducted and forced to work. Those who have fled have enslaved and suffered horrifying experiences. Some have come from Shwe Kokko.

We had the opportunity to speak with a young woman who had recently worked in one of the scam centers. She had not enjoyed it and been allowed to leave.

She claimed that her role in the modeling team, which consisted primarily of attractive young women, was to attempt to establish an intimate online relationship with potential victims.

” The target is the elderly”, she said. You begin a conversation by saying,” Oh, you look just like one of my friends.” Once you make friends you encourage them by sending pictures of yourself, sometimes wearing your night clothes”.

Then, she explains, the conversation shifts to get-rich-quick schemes, such as crypto investments, where the women claim that’s how they made a lot of money.

” When they feel close to you, you pass them on to the chatting section”, she says. The chatting partners will continue to communicate with the client to convince them to purchase shares of the crypto company.

During our brief time in Shwe Kokko we were only allowed to see what Yatai wanted us to see. Even so, it was obvious that the scams continue to exist and are likely still the city’s main industry.

Our request to see inside any of the newly-built office buildings were turned down. They kept telling us that those were private. We were escorted at all times by security guards seconded from the militia group which controls this part of the border. We were not permitted to enter the buildings ‘ construction sites or the exteriors. Many of the windows had bars on the insides.

The young woman who used to work in a scam center said,” Everyone in Shwe Kokko knows what goes on there.”

She dismissed Yatai’s claim that it no longer permitted scam centres in Shwe Kokko.

That is a lie, I tell you. There is no way they don’t know about this. In those high-rise buildings, the entire city is doing it. No-one goes there for fun. Yatai has no way of knowing.

She Zhijiang reportedly received a call from Bangkok’s Klong Prem Prison, where he is currently imprisoned, saying,” I can promise that Yatai would never accept telecom fraud and scams.”

Yatai wanted us to hear from the man himself, and hooked up a ropey video link. We had to rely on Mr. Wang to answer our questions and keep our eyes off the prison guards because only Mr. Wang could be seen conversing with him.

Not much is known about She Zhijiang, a small-town Chinese entrepreneur who Beijing alleges is a criminal mastermind.

He left school when he was 14 and started learning computer coding in Hunan province, China, a poor village. He appears to have moved to the Philippines in his early 20s and into online gambling, which is illegal in China. He began to make his money at this point. In 2014 he was convicted by a Chinese court of running an illegal lottery, but he stayed overseas.

He managed to obtain Cambodian citizenship by investing in gambling companies there. He has used at least four different names.

He and a Karen warlord Saw Chit Thu, who controls the Moei River in Myanmar, made a deal in 2016 to create a new city together. She Zhijiang would provide the funds, the Chinese construction machinery and materials, while Saw Chit Thu and his 8, 000 armed fighters would keep it safe.

Yatai’s glitzy videos depicted a high-rise wonderland of hotels, casinos, and cyberparks, promising a$ 15 billion ( £12 billion ) investment. Shwe Kokko was described as part of Xi Jinping’s Belt-and-Road Initiative or BRI, bringing Chinese funds and infrastructure to the world.

In 2020, China publicly split its support for She Zhijiang, and the Myanmar government opened an investigation into Yatai, which was operating casinos before they were made legal in Myanmar.

She Zhijiang was detained and imprisoned in Bangkok in August 2022 following a Chinese request to Interpol. He and his business partner Saw Chit Thu have also been sanctioned by the British government for their links to human trafficking.

She Zhijiang claims to have been a victim of double deception by the Chinese government. He says he founded his company Yatai on the instruction of the Chinese Ministry of State Security, and insists that Shwe Kokko was then a part of the BRI.

He claims that because he refused to give them control of his project, China’s communist leadership is turning against him. They wanted a colony on the Thai-Myanmar border, he says. She Zhijiang’s business relationship has been denied by China.

While he denied any wrongdoing on Yatai’s part, She Zhijiang, however, admitted to” a high probability” that scammers were coming to Shwe Kokko to spend their money.

” Because our Yatai City is completely accessible to anyone who wants to enter and leave freely. Refusing customers, for a businessman like me, is really difficult. This is my area of weakness.

It is, however, stretching credulity to believe that Yatai, which runs everything in Shwe Kokko, was unable to stop scammers coming in and out of the city.

Other than scams, it’s also difficult to imagine any other business choosing to operate here. With Thailand cutting off power and telecommunications, electricity comes from diesel generators, which are expensive to run. Additionally, Elon Musk’s Starlink satellite system, which is also very expensive, is used for communication.

Yatai’s strategy is” to whitewash the project to create a narrative that Shwe Kokko is a safe city”, says Jason Tower, from the United States Institute for Peace, which has spent years researching the scam operation in Shwe Kokko.

He claims that they may even be “begin moving some of the more notorious components of the scam industry, like torture, into other areas.”

But he doesn’t think the plan will work:” What kinds of legitimate businesses will go into Shwe Kokko? It’s simply not appealing. The economy will continue to be a scam economy”.

When we were eventually allowed to see inside one casino in Shwe Kokko, run by a genial Australian, he told us they were going to close it down.

Local Karen were the only customers inside, playing a well-known arcade game where they had to shoot digital fish. We were forbidden from doing any interviews. The roulette and card tables were not present in the back rooms. The Australian manager said the casino- built six years ago- had been popular and profitable when there were just one or two of them, before the civil war. However, these days, with at least nine customers in place, there were not enough customers to turn around.

The real money was in online gambling, which he said was the main business in Shwe Kokko.

It is impossible to determine how much money is made through online gambling and how much is made through blatant criminal activity, such as money laundering and fraud. They are usually run from the same compounds and by the same teams. When we inquired about the amount of money they made, Yatai refused to answer with even a ballpark figure. That is private, they said. Although the business has registered in Hong Kong, Myanmar, and Thailand, these are essentially shell companies with very little revenue or income passing through them.

We turned down Yatai’s offer to see the go-kart track, water park and model farm that they have built. Although we were unable to enter Yatai’s own luxurious hotel, we did see one more casino while being served breakfast there. It seemed empty.

The only other place we were permitted to visit was a karaoke club, which had incredible private rooms and gigantic domes that were completely obscured by digital screens and where large tropical fish and sharks swam. They also ran video loops extolling the vision and virtues of She Zhijiang. Except for a few young Chinese women who worked there, this club also appeared deserted.

They wore opera masks to avoid being identified, and danced unenthusiastically to music for a few minutes before giving up and sitting down. Interviews were not permitted. We were allowed to talk to a local Karen member of staff, but she was so intimidated by this we got little more than her name.

She Zhijiang has left Shwe Kokko’s running to a young protégé, 31-year-old He Yingxiong, in his absence. He lives with Wang Fugui in a sprawling villa they have built on the banks of the Moei River, overlooking Thailand, and guarded by massive Chinese bodyguards. They play mahjong there, eat the best food and beverages, and watch business closely.

Mr He has a slightly different explanation from his boss for the scams still operating under their noses. We are just developers of properties, he said. ” I can guarantee that this kind of thing does not happen here. However, even if it does, the locals have their own legal system, so it is their responsibility to handle it. Our job is just to provide good infrastructure, good buildings and supporting industries”.

However, this region of Myanmar has neither a legal system nor a functioning government. It is ruled by the various armed groups which control different bits of territory along the Thai border. Their leaders decide who can start or run a business, using their profits to help pay their battles with the Myanmar military or against one another. Many of them are known to be hosting scam compounds.

Mr. He acknowledged that the war had allowed Yatai to purchase the land for such a low price. Karen human rights groups have accused Saw Chit Thu of driving the original inhabitants off their land, with minimal compensation, though it is clear Yatai is also providing badly needed jobs for the locals.

The lawlessness of Karen State appeals to illegal businesses, but that doesn’t help Shwe Kokko’s reputation.

Neither do recent headlines.

A 22-year-old Chinese actor, Wang Xing, was duped into Thailand with an offer to work on a movie shoot, and last month he was freed from a scam center on the border. His disappearance spurred a barrage of questions on Chinese social media, forcing the Thai and Chinese authorities to mount a joint operation to free him.

Chinese tourists have been putting off travel to Thailand because they worry for their safety. Other rescues have followed. Some scam victims have emailed the BBC asking for assistance, and rescue organizations claim there are still thousands of people trapped. Nearly all are in smaller compounds along the border south of Shwe Kokko.

Yatai emphasized to us that they are not the same as these heinous operations, which are essentially a collection of sheds constructed in forest clearings. That is where all the bad things happen now, they said. They discussed Dongmei, a cluster of low-rise buildings run by a well-known Chinese crime lord known as Wan Kuok Koi, also known as Broken Tooth, and KK Park, a notorious compound south of the border town of Myawaddy.

That distinction hasn’t helped She Zhijiang, who once had the ear of politicians, police bosses and even minor royalty in Thailand. He appears to have lost even the influence he once had in prison today to obtain special privileges. He has complained of being roughed up by the guards.

His attorneys are contesting the Interpol red notice used to justify his arrest, but China’s voice will likely be the one that will determine his fate.

From our interview with him, Shi Zhijiang seemed genuinely outraged over his sudden reversal of fortune.

” Before, I had no understanding of human rights, but now I really understand how horrible it is to have human rights violated,” he said. ” It is hard to imagine how the human rights of ordinary people in China are trampled upon when a respected businessman like me, who used to be able to go to the same state banquets as Xi Jinping, does not have his human rights and dignity protected in any way”.

It appears he actually believed he could create something that would, one day, transcend Shwe Kokko’s vile beginnings as a scam city.

What happens to it now is hard to guess, but if the Thai and Chinese governments keep acting to shut down the scams, the money will start to dry up.