‘A fool and his money are lucky enough to get together in the first place.’
Gordon Gekko, Wall Street

In something reminiscent of a Hollywood movie, Cambodia appears to be fast becoming the new centre for online scams.

It does not seem that long ago when the main scam in Cambodia seemed to be trademark infringement. The fake ‘Sheraton Hotel’ in Phnom Penh (subsequently changed to ‘Sharaton’). Or the ‘McSam Burger Restaurant’, complete with its own Golden Arches. Or the ability of certain businessmen to magically remove trademark applications from the Ministry of Commerce’s Trademark Register and substitute their own applications.

Fast forward to 2022 and the latest game seems to be online scams. Once centered in Nigeria, this new style ‘419’ scam involves large scale operations in Sihanoukville and other centres using the full gambit of online communication channels to scam people, including WhatsApp, Facebook and Instagram.

Sihanoukville, transformed from a sleepy town into a Macau-style gambling haven, before a Cambodian-government crackdown outlawed online gambling and decimated the related property sector, has apparently become a centre for these scams utilising former casinos as bases for their operations.

In the past, boiler room operations were sometimes staffed by backpackers. At one point in Bangkok, they were operating out of the prestigious PwC building on South Sathorn Road. The workers were easy to spot among the suited-up accountants and lawyers that inhabited the surrounding buildings. Their uniform of cheap Khao San Road purchased shirts, pants and ties stood out among the tailored suits wandering the foyers at lunchtime.

Based on the Vice article, it seems the current crop of operations are staffed by a mix of people who are either conned into the work or voluntarily offering their skills. The impact of Covid-19 on employment in South East Asia has resulted in the unemployed across the region being lured by promises of well-paid employment in Cambodia. The operations no doubt operate under an umbrella of local officials and law enforcement protection.

One scammer’s playbook apparently includes the quote - ‘There is no un-scammable person. Only scripts that don’t fit.’

That may well be the case. I remember working with a senior foreign lawyer who had flown into Bangkok for several days. The lawyer was out of my sight for only a few hours at the end of days of meetings and was scammed by the well-known ‘Grand Palace is closed today jewellry scam’ in Bangkok.

As highlighted in the Vice article, awareness is perhaps the best form of defense against the scammers. Shutting down operations in Cambodia and neighboring countries is likely to merely force them elsewhere.

From Industrial-Scale Scam Centers, Trafficking Victims Are Being Forced to Steal Billions

July 2022

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News reports indicate that Prime Minister Scott Morrison's WeChat account - more likely his China Mainland Weixin account - has been hijacked.

As is often the case in Asia, everything is not always what it seems.

The PMs account appears to be a Weixin account, registered using a China Mainland mobile number. The registrant, a Mr Ji, seems to have been operating the account for the PM, a fairly common practice to circumvent Weixin user rules.

Mr Ji is alleged to have transferred the account (with its 75,000 followers) to Fuzhou 985 Information Technology in breach of Weixin rules. Tencent Weixin doesn't seem to care.

So, it seems it was never PM Morrison's account and he relied on Mr Li operating the account in good faith in accordance with his wishes.

Restrictions on foreigners doing business in Asia often requires the use of corporate structures or nominees to deliver control of an asset - whether a company or a social media account. The use of a bare nominee sits at the riskier end of the asset control spectrum, as PM Morrison seems to have found out.

With a bare nominee arrangement, the foreigner is reliant on the nominee acting in accordance with their wishes (usually for a fee), knowing that legally, in many Asian countries, there is no recourse if the nominee suddenly decides to act as if the asset (in this case, a social media account) is their own property to use or sell.

This issue often arises with shareholdings or land purchases. When things go wrong, the foreigner is unable to bring local court proceedings as they would need to rely on an illegal arrangement to prove their ownership.

Typically, the use of corporate structures with different voting rights delivers control while not offending local foreign ownership legislation which often focuses on shareholding percentages, and not control, as the determining factor.

However, this is less useful with social media accounts where a local phone number is required for registering the account. Key in these circumstances would be control of the phone number.

Chinese businessman reveals why he bought Scott Morrison's WeChat account

January 2022