Low-Tech Cambodian Police Work Foils Hi-Tech Scam
Thu July 17, 2003 11:13 AM ET
By Ed Cropley
PHNOM PENH (Reuters) - Dogged and traditional police work in Cambodia, one of Asia's poorest countries, appears to have rumbled a suspected hi-tech telecoms and investment "boiler room" scam run by a gang of international con artists.
Military police in the war-ravaged southeast Asian nation rounded up 20 foreigners earlier this week, including 14 Britons, in a swoop on a smart office building in the heart of the capital, Phnom Penh.
The suspects, who also included two Americans, an Australian, a New Zealander, a Thai and a Filipino, were undergoing a second day of interrogation on Thursday. They have not yet been charged.
Underdeveloped Cambodia, which is still struggling with the legacy of the genocidal, ultra-Maoist regime of the Khmer Rouge in the 1970s, is not noted for its expertise in fighting complex international financial crime.
But when lots of unknown Westerners were spotted coming and going at strange times of day and night from a hitherto unused office building, police started to suspect something was afoot.
They found the group were operating under the name of "Cambodian Rehabilitation and Development Program," an aid organization nobody had ever heard of.
Then, a military police raid unearthed stacks of computers and hi-tech hardware, including a $100,000 broadband Internet server commonplace in Europe or America but unheard of in a sleepy backwater like Cambodia.
"You cannot buy this sort of computer here," said Chem Sangva, deputy director of inspection at the telecoms ministry.
Closer investigations revealed the gang had set up an illegal international telephone gateway through which they were calling people in Hong Kong and Britain virtually for free to try to lure them into bogus savings schemes, he added.
WELL-KNOWN SCAM
New to Cambodia but well-recognized in recent years in neighboring Thailand, similar "boiler room" scams have conned thousands of people across the globe out of millions of dollars.
"Essentially these sort of people recruit a number of expats or backpackers who then cold-call people all over the world," said one international police investigator.
"They get them in with legitimate investments in what might be quite small amounts of money. People make a return on these initial investments, and then come back with larger sums of money which just disappears off the face of the earth."
The term "Boiler Room" gained common currency in 2000 as the title of a film, starring Ben Affleck and Vin Diesel, about fly-by-night stockbrokers involved in shady dealings to rip off investors.
Australia in particular has been a target for the fraudsters. The country's securities commission says Australians have lost at least A$400 million ($260 million) in recent years to people peddling dodgy investments over the phone.
It is not known if anybody was duped by the operations in Cambodia, but in just two weeks of operation the group racked up international calls which would normally have cost $27,278, Chem Sangva said.
Able to call Europe for $0.03 per minute via an unlicensed telephone gateway, compared to the normal $1.2 per minute, the group, which is believed to have moved recently from next-door Laos, has probably fallen foul of Cambodian law, police say.
However, given the parlous and erratic nature of the legal and judicial system, prosecuting them might be difficult.
"Cambodia does not yet have a telecoms law," said one foreign legal expert in Phnom Penh. "There is a draft, which they are working on, but it is not yet enacted." (US$1 = A$1.52) |
