A new report, launched in early October, has found that Asian crime syndicates have integrated new service-based business models and technologies, including malware, generative artificial intelligence (AI) and deepfakes, into their operations; they have also established new underground markets and cryptocurrency solutions for their money-laundering requirements.
“Organised crime groups are converging and exploiting vulnerabilities, and the evolving situation is rapidly outpacing governments’ capacity to contain it,” says Masood Karimipour, United Nations Office on Drugs and Crime (UNODC) Regional Representative for Southeast Asia and the Pacific. Leveraging technological advances, criminal groups are “producing larger-scale and harder-to-detect fraud, money laundering, underground banking and online scams”. This has resulted in the creation of a “criminal service economy”, with the region emerging as a “key testing ground for transnational criminal networks looking to expand their influence and diversify into new business lines”, he adds.
The report, 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 analyses produced by the UNODC. It outlines recent cases that demonstrate how under-regulated online gambling platforms and increasingly high-risk and often unauthorised virtual asset service providers (VASPs) that have proliferated in recent years are being used by major organised crime groups to move, launder and integrate billions in criminal proceeds into the financial system without accountability.
The cases examined also highlight how illegal online casino operators have diversified business lines to include cyber-enabled fraud and crypto-based money-laundering services. “It is more critical than ever for governments to recognise the severity, scale and reach of this truly global threat, and to prioritise solutions that address the rapidly evolving criminal ecosystem in the region,” says Mr Karimipour.
UNODC estimates financial losses of between US$18 billion (S$24.18 billion) and $37 billion from scams targeting victims in East and Southeast Asia in 2023 alone, with a high proportion of these losses attributed to scams committed by organised crime groups in Southeast Asia.
The report also notes a rise in AI-driven crimes involving deepfakes, demonstrated by a more-than-600% increase in mentions of deepfake-related content targeting criminal groups in Southeast Asia across monitored online platforms in the first half of 2024.
“The integration of generative artificial intelligence by transnational criminal groups involved in cyber-enabled fraud is a complex and alarming trend observed in Southeast Asia, and one that represents a powerful force multiplier for criminal activities,” says John Wojcik, UNODC Regional Analyst. Not only have these developments expanded the scope and efficiency of cyber-enabled fraud and cybercrime, they have “lowered the barriers to entry for criminal networks” that previously lacked the technical skills to exploit more sophisticated and profitable methods, he explains.
The report also provides a list of recommendations geared towards strengthening knowledge and awareness, legislation and policy, and enforcement and regulatory responses in the region, intended to assist governments to address the situation.
Scam Snapshot: Singapore
In Singapore, in the first half of 2024 (1H 2024), there were 26,587 scam cases – an increase of 16.3% from the 22,853 cases over the same period a year earlier. Victims lost S$385.6 million in 1H 2024, compared to $309.4 million in 1H 2023. These updates were shared at the Mid-Year Scams and Cybercrime Brief 2024 by the Singapore Police Force (SPF).
The majority (86.0%) of total reported scams involved mostly self-effected transfers, which may be a result of deception and social engineering involving an array of complex scam methods. In most of these cases, scammers did not gain direct control of victims’ accounts; instead, they manipulated victims into directly performing the monetary transactions.
According to SPF, overall, the average amount lost per scam case, across all reported scam cases, has increased to $14,503 in 1H 2024 – up 7% from $13,541 in 1H 2023.
In terms of total amount lost, the top three scam types were: investment scams, job scams and government officials impersonation scams.
© 2024 Institute of Singapore Chartered Accountants