Protecting Americans from Global Scam Operations and US Response

United States Senate Foreign Relations Committee will come to order. Uh thank you uh to our witnesses for uh being here today and thank you for everyone else who is attending. Uh we're glad to have everyone attend these meetings as uh room will allow. Uh we do have a rule in this committee that uh there'll be no interruptions and uh no uh there'll be no attempt to contact. either a member of this committee or one of the witnesses uh during this hearing, and uh the consequences are serious if you do. So uh with that I want to uh the way this is gonna work, I'm gonna make an opening statement, Senator Shaheen will. We'd like to hear from our witnesses and then uh what we will do is open it up to a round of questions uh for members who are here or who show up so uh we'll start by saying thank you to our witnesses for testifying today. on what is a really, really important issue. Uh, right now across the ocean there are entire cities, cities devoted to scamming Americans. In Cam- Cambodia, in Laos, and in Burma, scam center operations have become a multi-billion dollar criminal enterprise that enables a range of illegal activity like human trafficking, money laundering, illicit uh drug trade, and even arms trafficking around the globe. presenting a growing threat to Americans' wallets and to our national security. We have all received one of these strange phone calls or texts. In fact, as common as it is, uh, I'm wouldn't be surprised if somebody in this room receives one of those during this hearing. Just last year, Idahoans reported losing thirty-four million dollars uh to on-line investment scams. That's just Idaho. Nationally, Americans are losing billions each year to these scammers and these losses continue to grow to the benefit of our adversaries. Many of these scam centers have uh close ties to Chinese transnational criminal organizations who take orders from the Chinese Communist Party and work to promote the CCP's foreign uh policy priorities. These criminals have created an industry that traps hundreds of thousands of victims of human trafficking in scam compounds. They trick their uh victims with false jobs advertisements, take their passports, and in co- in some cases torture people to force them to steal your money. Fortunately, the administration is working to end this horrible practice with its scam center strike force. It has blocked more than eight hundred million dollars of cryptocurrency transactions from going to these Chinese criminal groups. But that number is just a drop in the bucket compared to the scale of the problem. Uh, as these scam centers uh evolve to use AI and other technologies to stay ahead of law enforcement, it is more important than ever that we mount an effective response. This will require entire US government working with our international partners to address the pipeline of human trafficking and build complex legal cases against these criminal groups who are often aided and abetted by foreign governments. Uh, this issue is not a partisan issue. It is clearly a bipartisan issue. It affects every American, and these scammers don't care whether you're a Republican, a Democrat, they just want your money. I hope today that our witnesses will share more about the State Department's role in this effort. How uh are we uh working uh with partners like the UK, Australia and Japan, whose citizens have also lost money to these scam operations uh to stop these crimes? We'd like an answer to that question. What can we do to help for uh foreign law enforcement agencies to build strong cases against the beneficiaries of these scam centers and insure, uh, they are shuttered for good? Another question we'd like answered. And finally, what are we doing to hold the governments of countries that host and enable these scam operations accountable? I look forward to learning the answer to these uh questions from our witnesses, as well as hearing their recommendations for what additional authorities or increased international cooperation efforts may be needed to protect the American people from this growing threat. Thank you to the witnesses for being here. With that, I'd like to turn over to the distinguished ranking members. Senator Shachina.

Thank you, Mister Chairman, and thank you to our witnesses for being here today. As the chairman says, behind many of the on-line scams targeting Americans are scam compounds, where trafficked workers are forced to defraud victims on-line, Just a few years ago, these compounds were concentrated in a handful of countries. But today, scam operations have spread to countries across Africa, the Middle East, Asia, and even in the Western Hemisphere. Americans lose more than twelve billion dollars, billion with a B, a year from schemes perpetrated by overseas scam compounds. We have that poster just to remind everybody of about the total. Global losses are now estimated to exceed one hundred billion dollars each year. And every senator on this committee has constituents whose lives have been upended by sophisticated on-line fraud. In Hollis, New Hampshire, one seventy-eight year old lost about a hundred and fifty thousand dollars after being lured into a fraudulent on-line investment scheme. At another Granite State resident rep- reported purchasing a vehicle on-line and lost six thousand two hundred dollars and never received a call car, and his calls went unanswered. We've had a scam in New Hampshire targeting our Easy Pass system that's gone out to everybody who has an Easy Pass in the state. Yes.

I got one of those.

Yes, right. At a time when families are already feeling squeezed, they can't afford to lose their hard-earned savings to fraud. This hearing looks beyond those individual stories to the transnational criminal organizations behind many of these sophisticated fraud schemes, and why law enforcement alone is not going to be able to dismantle them. These networks have direct consequences for U. S. national security. They span multiple countries, often eroding the rule of law and exploiting weak governance, and they thrive on corruption. They rely on victims from over eighty countries who have been trafficked and forced to carry out these scams. And they generate billions for transnational criminal organizations, many with links to China. Fighting them requires diplomacy, support for human trafficking vis victims, international law enforcement cooperation, sanctions, and strong partnerships with foreign governments. Now, the good news is that the United States has begun responding to this threat. The administration has elevated countering scam compounds to be a national security priority. It's imposed sanctions on scam operators and human traffickers, and it has pursued criminal prosecutes prosecutions and launched a government-wide effort to combat these networks. These are important steps, but the criminal networks are adapting just as quickly, and when one country cracks down, they move somewhere else. Without a coordinated global response, it becomes a game of whack-a-mole. If these criminal organizations operate across borders, our response has to be to operate across borders. That means preventing recruitment, supporting trafficking survivors, working with our allies and partners, and holding both criminal organizations and the governments that enable them accountable. That's exactly the approach Senator Cornyn and I put forward in the Scam Compound Accountability and Mobilization or Scam Act. Figured you'd like that acronym, which passed the Senate by unanimous consent. The bill would build on the administration's work by making that coordinated international response a permanent part of US policy. Today's hearing is about how we build on that progress. I look forward to hearing from our witnesses about what's working, about where the gaps remain, and what it will take to build a response that is every bit as coordinated as the criminal networks were trying to defeat. Again, thank you both for being here.

Senator Shaheen, thank you uh for those remarks. We're uh fortunate to have two people from the State Department, Assistant Secretary. First of all, Michael Desambre, who's Assistant Secretary for Bureau of East Asian and Pacific Affairs. Thank you for coming. We also have David Bedard, who's a Deputy Assistant Secretary, and he's with the Bureau of International Narcotics and Law Enforcement Affairs, also from the State Department. So if you would uh give us the uh benefit of uh what you think we should know, gentlemen, we'll start with you, Mister uh Desambre, and then we'll go to Mister Bedard. Give us your thoughts and then we'll open it to uh questions from from from the committee. So, Mr. Sombri, the floor is yours.

Chairm- Chairman Rish, Ranking Member Shaheen, and distinguished members of the committee. Thank you for the opportunity to testify on protecting Americans from global scam operations and how the department is countering criminal on-line scams in the East Asia and Pacific region. In Burma, Cambodia and Laos, criminal scam operations have reached an unprecedented industrialized scale. What began as isolated fraud rings have become a sprawling illicit economy. operating from compounds staffed by professionalized and sometimes coerced workforce. Credible sources report that hundreds of thousands of individuals from dozens of countries are trafficked into these operations across these three countries alone. This is an industry with its own infrastructure, labor force, and supply chains. Expert agree, experts agree that Chinese origin transnational criminal organizations are the major force driving the scam economy, with the vast majority of operations led and managed by Chinese nationals. Americans have become significant targets. As Senator Shaheen just indicated, initial twenty twenty five estimates placed reported losses from Southeast Asia-based scam groups at twelve point five billion US dollars, a conservative figure. As our analysis nears completion, we anticipate actual losses to be significantly higher. It is estimated that these groups inflicted up to a hundred and fourteen billion in losses on East Asia and Pacific countries in twenty twenty five. They are also resilient. When pressured in one location, they relocate and adapt, reducing their physical footprint while sustaining scam intensity through technology. In Cambodia, some compounds closed by police raids open operations elsewhere in the country. The Department of State's strategy is to identify vulnerabilities across the transnational criminal organizations and apply sustained pressure at scale to disrupt their criminal actions and impose costs on the organizations that includes going after the bosses financiers of the criminal organizations, in addition to disrupting their physical and digital infrastructure, financial flows, and communication networks. Dismanting leadership and cutting off financing is one of the critical ways to break the criminal networks rather than merely temporarily disrupting them. On March sixth, twenty twenty six, President Trump signed executive order one four three nine zero, directing the Secretary of State, Treasury, War, and Homeland Security and the Attorney General to develop a whole of government action plan to identify, disrupt, and dismantle these networks. The growing scale of the threat demands a unified response. Estimated losses to Americans in twenty twenty-five were triple the level in twenty twenty-three with Americans in all fifty states targeted. My INL colleague, David Bedard, will detail the inter-agency and department action plans. Our diplomatic message is consistent. Countries must target transnational criminal organization bosses. not just the low-level operations, and dismantle the entire scam ecosystem. We are raising this issue with Cambodia, Burma and Laos, and other regional partners, and with China. We've encouraged China to demonstrate that it is not abetting these crimes by allowing Chinese crime bosses to be held accountable internationally. We must drive up costs for these transnational criminal organizations, restrict their access to victims, and make clear that there is no safe haven jurisdiction that can shield them from the reach of the United States. We have backed this message with action. On July twenty third, Secretary Rubio announced a visa restriction policy targeting individuals involved in cybercrime and cyber-enabled crime, and we intend to use it. In twenty twenty five, a section three eleven rule cut off Huey and group's access to US dollar accounts. Sanctions and US law enforcement action against the Prince group helped trigger an international take-down of the organization its CEO Chun-ji, and over one hundred and forty affiliates. Chun-ji was also the target of a DOJ indictment and the forfeiture of approximately fifteen billion in cryptocurrency, the largest such forfeiture in history. On April twenty-third, Treasury sanctioned Cambodian Senator Khok An and twenty-eight individuals and entities in his scam network. And on April twenty-twenty-six, DOJ's scam center strike force charged two Chinese nationals tied to a Burma-based scam center targeting Americans and froze over seven hundred million in cryptocurrency. In April, in partnership with INL, I led the launch of a thirteen country coalition of our allies and partners, most affected by the threat and capable of acting against it. The counter scams contact group includes Australia, Canada, Indonesia, Japan, Malaysia, New Zealand, the Philippines, the Republic of Korea, Singapore, Thailand, the United Kingdom, and Vietnam. We are using this group to collectively raise the cost on scam groups through law enforcement action, asset seizures, financial sanctions, diplomatic pressure, and information sharing, while reaffirming reaffirming US leadership in the region. The threat originates abroad, but endangers tens of thousands of Americans nationwide. I credit the committee for elevating attention on this fight, including through the bipartisan Scam Act. As part of the administration's whole government effort, the Department of State will continue to do all we can, including in East Asia and the Pacific, to drive up the costs on these criminal scam groups and drive down the harm to Americans. Thank you, and I welcome your questions.

Thank you very much. We appreciate that. Uh, m- uh, Mr. Bedard, uh, tell us what we need to know.

Chairman Risch, and thanking Mem- Ranking Member Shaheen and distinguished members of the committee, thank you for the opportunity to testify on behalf of the Department of State in our work to protect American citizens from criminal on-line scams. U. S. losses are staggering, but behind the t- but the true cost is not in dollars alone. Behind every statistic is a human story, as each of you both right both rightly pointed out. Those are the people that we do this work for. While Burma, Cambodia and Laos remain the epicenter, operations are expanding across South Asia, Africa into the Western hemisphere and beyond. Global money laundering and human trafficking networks compound the problem, along with inadequate screening of trafficking victims and criminals exporting the trade craft on a global scale. As countries crack down, scammers are diversifying beyond large industrial scale compounds into smaller decentralized operations in hotels and residential areas. making them harder for law enforcement to detect. Chinese or origin transnational criminal organizations drive the Southeast Asian scam economy. They operate as loosely affiliated businesses, and many are poly-criminal, running scams, trafficking drugs on people, and offering cybercrime as a service. These organizations operate in layers. There's a leadership tier that colludes with government officials, a management tier running day-to-day operations, and scam workers, many of them trafficking victims, others that are willing participants. Across every layer sit the facilitators, the complicit officials, the lawyers, the accountants, the bankers, the crypto-converters who keep this illicit economy running. These networks exploit a persistent vulnerability. Criminal operations are borderless, but law enforcement's not. They base themselves in jurisdictions with weak legal frameworks and limited technical capacity betting that fragmented responses cannot keep pace. In March, President Trump signed the executive order one four three nine zero. combating cybercrime, fraud and predatory schemes against American citizens, and directed the Secretary of State to demand enforcement action from foreign governments. The State Department is coordinating with the National Security Council and the Homeland Security Council on an international approach, built around four lines of effort. First, a global diplomatic campaign, pressing key countries to act through high-level demarches, joint statements and coordinated action. Our regional bureaus, such as the one Assistant Secretary de Sangre leads, leads diplomatic engagement with foreign capitals to build political will, while INL engages the ministries of interior, public security and justice, and the law enforcement agencies that do the operational work. We also work multilaterally to raise international standards and align partners with the common approach. INL led the adoption of the first ever UN resolution on combating cyber fraud, which was cosponsored with Japan and the United Kingdom. Second, imposing cost on the transnational criminal organizations and their enablers. and the complicit officials who give them safe haven. Our tools include visa restrictions, support for asset seizures, extradition requests, and targeted sanctions to deny these networks the resources and to drive them to change their behavior. On July twenty third, Secretary Rubio announced new visa restriction policy targeting cyber criminals, in particular those engaged in cyber scams and sextortion. Third, operational law enforcement cooperation. We cannot arrest our way out of this from Washington DC. we rely on foreign law enforcement. We're warranted INL provides training and equipment so foreign partners can investigate these enterprises and their financial flows, in cooperation with US law enforcement. Thailand is a strong example. Following the evacuation of thousands of scam workers from compounds in Burma, INL funded FBI deployments to embed agents with the Royal Thai Police in the anti-cyber scam center, giving US law enforcement its first ever opportunity to interview individuals coming directly out of scam compounds. Those interviews and evidence transformed our understanding of scam compound leadership through operations and their trade craft. FBI and Thai personnel used INL funded digital forensics tools to examine more than eight thousand phones and fifteen hundred hard drives. That work has supported multiple federal indictments and arrests targeting scam leaders and facilitators. Fourth, prevention and outreach. Partnering with tech platforms to take down scam infrastructure working with financial institutions to block illicit transactions, and educating Americans through public awareness campaigns. Together, these lines of effort will produce investigations, arrests, and prosecutions of cybercriminals who target Americans. They will impose a deterrent effect on the criminals and their enablers, and they will deepen our understanding understanding of criminal tradecraft to better protect Americans at home. We appreciate the bipartisan interest in this issue and welcome the committee's continued engagement as we implement the executive order. We look forward to working with you to protect Americans from these threats. Thank you and I welcome your questions.

Uh, well thank you very much, uh, Mister Bedar. We'll now do a a round of questions, uh, uh, with members who are here. Very, it's a fascinating subject, really, and uh, uh, I'm gonna start, I'm I'm gonna ask either, I don't know which, either one of you uh wanna take this on. Um, you you know, we we talk about what's happening here in America and I think we as Americans take for granted the fact that this is a capitalist uh country, not uh a socialist or communist country, so that the vast majority of Americans, not all, but the vast majority have access to some type of capital that they can uh, that can be stolen. Uh, so uh obviously we are a target uh for this uh because we are a wealthy country. So the the the question I would have for you is I I'm sure there are some other countries where people do have access uh to capital. What what other countries are are notoriously a target for these scammers? And are we coordinating with those countries? What whichever one you wanna go.

Senator, thank you very much for that question. I think unfortunately we're seeing most countries around the world being targeted, even those countries where you don't think that they have large amounts of capital accumulated. As I mentioned in my opening remarks, estimates are that in Southeast Asia there's been a hundred and fourteen billion that has been stolen from people resident in in Southeast Asia. So it is a problem in in every country around the world. But coordinating internationally is clearly an important role that we see ourselves in the State Department to do. And and that's why earlier this year, David Bedard and I launched this uh international contact group, focusing on those countries, both where they're being affected, but also where they've got the ability to really work with us on some of the aspects, particularly in terms of financial seizures and asset seizures. So including Japan, UK, Korea, Australia, New Zealand, Singapore, Canada, that those are all countries being affected by this as well to varying degrees, but every single one of them is being affected and we are coordinating with them because it is a global issue.

Uh that uh that's important obviously uh that that we do coordinate um the uh I guess the reason I ask that question is it it just amazed me uh the the type of scams they have I think everybody here got the one that Senator Shaheen referred to about the traffic tickets or the uh uh

Yes.

We we don't have tolls out west, but uh it I was getting a claim for t for tolls that we we didn't have, so uh i and that that's not a big amount of money. I we hear about the big scams where people lost thousands uh or even millions of dollars, uh but the this was a particularly small one, but if they get enough people I suppose it it adds up. So um thus um that question. Um in any event um appreciate that, and I think that um Uh as we go forward uh we we're gonna recognize that uh there are countries that are are involved in this at the level of their government. Uh China always wrings their hands when we arrest somebody and and uh disassociates themselves with them but the more you deal with China the more you realize that that thing goes right up through the government what uh what role does China play in all of this in in in enabling these things?

Senator, thank you. I I think we, as mentioned, we do understand that most of these transnational criminal organizations are led by Chinese nationals or ethnic Chinese individuals and so, clearly, there is a role of of China in that regard. Many of those are actually located outside of China, though, so whether it's in Cambodia, Burma, or Laos, there's Chinese nationals or ethnic Chinese individuals uh running those transnational criminal organizations. But you're absolutely correct that that corruption as part of these countries, whether it's in Cambodia, Burma, Laos, others, uh, is is clearly

So let's talk about the ramifications. What uh what programs have have uh you used that you have found most effective in combating uh what's going on, both from a preventative uh uh nature and a remedial nature nature?

Sure, maybe I'll I'll talk briefly and then I'll turn it over to to Das Bidhar to speak about some of the law enforcement cooperation um I mean one of the the benefits that we've seen in the State Department of having the regional bureaus now sort of running the foreign assistance is that we can use foreign assistance to really direct on these problems as they arise. So starting in October of last year, on on the sidelines of ASEAN, you know, we announced fifty-two million dollars in funding focused on, you know, four main areas. One is prevention, second is financial disruption. third is victim protection, and then third is law enforcement assistance. And I'll I'll have Dasvidar talk about the law enforcement assistance. But we're definitely finding that working with the governments, helping them understand the issues and trying to ensure that they go after the scam centers and the scam bosses has been the most important thing, because up until recently there's been a lot of focus on just knocking down the scam centers which then they just proliferate somewhere else you knock them down to one place they go somewhere else and so really we're working on within sort of our like-minded countries as well as working with Cambodia, uh, really trying to make sure they go after the scam bosses and and maybe Das Bedard.

Mr. Bedard.

Thank you, Assistant Secretary. Uh, as an example of the law enforcement assistance that we give, uh, I'll highlight what we work uh, the work that we do in in Bangkok uh with the Royal Thai Police. Um, INL and HSI have recruited uh a number of Royal Thai Police officers with particular skill sets in cyber scam um knowledge and cyber and financial expertise, uh into a transnational criminal investigation unit. Uh so these people are very focused on the problem that is emanating from Southeast Asia and the same criminals that are targeting uh Thai are also targeting Americans and we think that there's a mutual benefit benefit there. I mentioned the uh the victims that are uh leaving Burma and entered into uh Thailand. Uh INL funded those deployments of the FBI agents to process the eight thousand phones and the fifteen hundred hard drives. uh we were able to work with the Royal Thai Police based on years of experience, years of law enforcement assistance that was provided to to the Thai, building up their capabilities and and really letting them be good partners for US law enforcement. This work supported multiple federal indictments. Assistant Secretary DeSambre mentioned the two Chinese transnational uh nationals that were uh indicted that came directly out of this work. Uh and we think that this work can be replicated throughout the world because this is not just focused in Southeast Asia uh as mentioned by Senator Shaheen. uh this is proliferating across the world and we're looking to replicate this model elsewhere.

Thank you, gentlemen. Sir Shaheen.

Well, thank you, that is is very informative. Um, I don't know if either of you caught the piece this morning on one of the network morning shows about scams, but they were um interviewing somebody who had worked on this issue for a number of years who made the point that right now We've got thirteen different agencies that have responsi- overlapping responsibilities to deal with scams, and there's nobody who is heading that effort up across those agencies. Um, he was saying, you know, this is one of the we need to treat this like combat and so we need somebody in charge. How how um how appropriate is that criticism and How do you coordinate with other agencies that are working on this? I'd, either one of you.

Thank you for the question, Senator, and I won't comment on the appropriateness of the criticism, but I do understand that there this is a whole government approach, and many agencies are focused on this. Uh the President's executive order uh demands and uh is uh looking for uh coordination on this issue. Uh it is a national security priority for the President and one that we certainly take seriously. Uh the action plan that was directed by the president is currently in in in the inter-agency review process uh to uh de-conflict uh some of the concerns that you have raised uh and we certainly uh think that uh the task force that will be implemented through that executive order will solve uh the problems that you may be referencing.

So earlier this year the bipartisan House Select Committee on China released a report that identified overseas scam compounds as a convergence transnational organized crime, human trafficking, illicit finance and corruption, with direct implications for US national security and strategic competition with the Chinese Communist Party. All of those issues you both raised in your testimony. But at Are we raising these concerns with the highest levels in China? Um, I'm thinking about fentanyl, which has been a huge scourge, um, for substance misuse in the United States and in New Hampshire. a congressional delegation met with President Xi a couple of years ago and raised this concern. And until that high-level meeting, we were not getting it any real cooperation from the Chinese government to address that. So, is that the level at which we should be raising these concerns?

Senator, I can tell you that we are raising these concerns, transnational criminal organizations, both fentanyl and scam centers, at the highest levels with China.

With President Xi?

Mm-hmm.

Has President Trump raised this issue with President Xi?

President Trump has raised transnational criminal organizations with President Xi.

And what kind of a response did he get?

Well, I think we've seen some action for from them, for example, on the fentanyl area, uh, where they have scheduled the various different precursor chemicals and otherwise.

Right. But I I certainly would agree with that on the fentanyl issue.

Yes.

But I'm really talking about scams now, too. What what are we seeing from the Chinese on scams and have they been willing to acknowledge that um Chinese nationals are leading many of these operations and that they need to be cracking down in China on it.

We have been seeing in the last six months, you know, greater crackdown, you know, by the Chinese in various different countries. So I think actually you've seen in Cambodia a lot of the, you know, crackdowns over the last six months which have actually been, you know, to some degree very successful in decreasing the amount of scam compounds in Cambodia. I think our understanding is much of that has been driven by Chinese desire as those scam compounds had been targeting Chinese nationals. So I think one of the benefits, shall we say, of the expansive or the expanding nature of the targeting out of the scam compounds is that they've been targeting many more countries and those countries including China are now much more willing to work you know, themselves and also with us to try to go after these scam compounds.

So the scams are actually targeting Chinese citizens in China.

Yes, that as well as our citizens.

Yes. Um, I I know, excuse me, one of the places that we know has um some of these compounds is Burma um or Myanmar, where we don't really have um any leverage because of the government there. So how do we work with countries like that, where they may have a government that's either unfriendly to the United States or is uh a very dysfunctional government.

Senator, that i- that is a very good question, and it it's obviously challenging in those countries. And and the more we can work with the different groups within countries and and Burma is a good example. You know, really focusing on advancing American interests and stopping scam centers is one of those interests. So we are willing to engage with all the different parties in Burma to try to accomplish that so we can you know protect American citizens from being scammed by the compounds in Burma.

And when we do that, Do we get pushback from the government there or

I mean, obviously engaging with the different organizations to the extent that there is uh corrupt involvement it's always a challenging uh challenging discussion. Uh, I can say we're getting better traction in in Cambodia, for example, than we are in Burma and Laos at the moment.

Thank you. Thank you, Mister Chairman.

Thank you. Uh, Senator Ricketts.

Thank you, Mister Chairman. As we've discussed, overseas Scam centers are center store operations that completely destroy people's livelihoods. Just to take a few recent examples from my home state of Nebraska. A man in Lancaster County lost over fifteen th- oh, sorry, fifty thousand dollars in three years to a scammer that he met in an area internet chat room. A woman in Hall County lost over twenty thousand dollars online in just four months in an online romance trap. And a Lincoln man in his seventies lost his retirement in a months-long online cryptocurrency scam. Sadly, this is just the tip of the iceberg. Scam centers operating across Southeast Asia are some of the biggest culprits. In recent years, they've evolved into sophisticated transnational criminal enterprises as we've discussed here. The United States, through sanctions, asset seizures and law enforcement operations, has taken aggressive action to address this. We're also working with partners through bilateral channels such as in organizations such as Interpol and ASEAN. However, currently there is no standing international body exclusively to coordinating intelligence, financial investigations, sanctions, and law enforcement against these scam networks. In the past, the US has created dedicated multinational task force when transnational threats reach strategic significance. For instance, the giant F South was stood up in the nineteen nineties to better address drug trafficking cartels. Mister Bedard, given that today's scam center networks are similarly transnational, Combining cybercrime, human trafficking, money laundering and cryptocurrency, has the threat reached the point that we should establish a comparable multi-national coordination mechanism?

Thank you for the question, Senator. Uh, this is certainly an issue and one that uh domestically in the executive order there the president is directing us to create a task force to address this. Uh, through that there's an international plan and we will certainly work with our international partners uh to share intelligence and address this transnational crime, as you mentioned. I will say the work that we're doing with Interpol, we think that there are very productive channels for us to work through. Interpol is standing up a global task force themselves and we will do what we can to support that task force rather than create duplicative task forces. Uh, we see other countries that are working on this problem doing that, and we have some concerns and wanna make sure that is truly multinational and we fit in where the preponderance of the the countries that are concerned about this, are working.

So what would be the biggest advantages of of forming these uh coalitions?

The biggest advantage is certainly intelligence sharing. I think the the challenge that we have, we have a a thirteen country contact group and and working with each of those countries that have different regulations that different have d have different authorities uh and having a task force allows each of those countries to bring their comparative advantage to this fight so that we can take uh take this fight to these perpetrators wherever they fit they are.

Over the past few years, Beijing has devoted significant resources to dismantling scam centers that target Chinese citizens. We just discussed that. However, the selective enforcement has increasingly put Americans and other foreigners in the crosshairs of Chinese scam center operators. As evidence of this, in twenty twenty four, Communist China reported a thirty percent decrease in money lost to online scams, while the United States witnessed a forty percent increase. Many of these criminals have been repatriated from scam centers in Southeast Asia back to Communist China and released from prison. They have now set up smaller scam networks within Communist China itself. and they are exclusively targeting foreigners. This shift is due to a lack of enforcement by the Communist Chinese officials when victims are overseas. Assistant Secretary Desambre, to what extent do you believe Communist China's current enforcement posture is encouraging scam operators to shift their focus from Chinese victims to Americans or other foreign nationals?

Senator, thank you very much for that question. We we've definitely seen the pressure that China puts on countries like Cambodia to ex- to extradite back to China the various uh scam bosses that are caught within the uh within their network. And we're really working very closely with our international contact group that we mentioned to try to focus on putting diplomatic pressure on these countries not to disp you know deport them back to China but to give us access to those individuals to make sure intelligence is gathered so that we can actually ensure that we can go after all the scam bosses and make sure they aren't sent back to China and able to continue to operate against American citizens.

What about the idea that China is selectively enforcing the law on these scam operators that are targeting Chinese citizens, but not really worrying about Americans or other foreigners?

I I don't have any specific information on that, Senator, it wouldn't surprise me if that were to be the case. When when they are sent back to China, we don't have great transparency as to what happens to them. Uh, some of them may be, you know, incarcerated, uh, and others may not. We have no, we don't have that transparency.

Uh, are there additional steps that we can be taking to make sure that Beijing prosecutes fraud against foreigners, um, and American citizens, as opposed to just fraud on S- Chinese citizens?

Well, definitely, it is it is a topic that we discussed with China and we'll continue discussing with China understand that there's been various efforts on the FBI to work with uh Chinese MPS as well and I presume they're talking to them about those topics.

Good. Thank you, Mr. Chairman.

Thank you. Senator Kaine.

Uh, Mr. Chair, thank you for holding this hearing. It's really important and hearing,

Clear.

you know, whether it's Idaho residents losing forty-three million in a year, or Senator Ricketts talking about his constituents, or Senator Shaheen with twelve million annually, I mean, this is infuriating. It is absolutely infuriating. Um, the many of us are on either the armed service or the intel committee, and a number of years ago, as we were hearing about cyber attacks from adversaries against United States, an interesting pattern was sort of um becoming manifest, which is often cyber attacks from Russia were against defense or critical infrastructure, but cyber attacks originating from China were just sucking up consumer information, you know, a medical device manufacturer or the OPM or there might be a consumer company with a lot of US customer data and that was the subject of cyber attack and now we see why the strategy of sucking up American consumer data uh was something that China was focused on a number of years ago as these attacks you know go after people who have easy passes or who have other kinds of consumer information that has been reached uh through these just really outrageous activities um one of the things that I cuz every time I hear one of these stories it really makes me angry, is if you're watching this hearing, um, or if you have a, you know, somebody who knows about this hearing, m- maybe you wanna know whether something's a scam. And the government has resources to try to help you figure it out. Let me just give you one example. The US Senate Select Committee on Aging, chaired by Senator Scott and Senator Gillibrand, is the ranking member, has a fraud hotline specifically designed to help you figure out whether something is a scam. And it's manned Monday to Friday from nine to five uh Eastern time. And the phone number on that hotline is eight five five, three O three, ninety four seventy. You can just go online and say Senate Committee on Aging. And there's a lot of fraud resources on that web site. There's a hotline, there's information from the CFPB, from the FTC, from the Department of Justice Criminal Division. So if you're wor worrying about, if you even have an inkling, an inkling that something might be a scam, there are people who can help you figure it out. So let me ask to our witnesses, are there other resources that you would suggest? I've given a Senate committee on aging um website and uh hot hotline um which refers you to other resources within the federal family, but are there other resources that you would suggest, if anybody's got an inkling they're being defrauded, where they can go for help.

Senator, obviously as you indicate, this is a huge issue and we are laser focused on protecting Americans, uh, all over the world and from activities all over the world. We in the State Department are focused obviously on countries outside the United States and so what we're doing actually outside the United States

Yeah.

is very much in line with those programs in the United States is trying to help educate people on how to avoid being scammed and that process has been going on for a long time we've actually been pivoting more recently to really focusing on the enforcement in coordination with INL and others on the law enforcement because unfortunately,

Yep.

as much as we try to prevent people to be victims of the crimes, it seems to continue. And so we really need to go after the bosses,

Yep.

which is really what we're trying to do.

A- and those who are perpetrating fraud get more and more sophisticated. They can use AI tools. They can, you know, generate voices that sound similar to voices that people might be familiar with. So the sophistication level is is increasing. Um, I very much appreciate the work that you all are doing on the enforcement side. There's just so much more, I think, education we can do on our side, um, to, to give people tips about what to avoid, but also if you have an inkling here's a place you can go and try to get some help. Um, the, there's been a good bit of focus on, uh, scams originating from Southeast Asia, but I think it is important for folks to know, even though that's been the predominant, that is not the only place from which these uh scams originate. Here is an interesting one. In twenty twenty three Peruvian authorities rescued forty-three Malaysians who had been human trafficked to Lima and forced to conduct telecom fraud demonstrating that this course of compound model is not just limited to Southeast Asia um the Justice Department in July twenty twenty six just recently in a very laudable way, announced guilty pleas in a sophisticated call,

Senator Kaine, thank you very much for raising Senator Kaine, thank you very much for raising uh your concerns. This is certainly a a a threat that is uh expanding globally. Um as Senator Ricketts mentioned, romance scams are are out of West Africa, Nigeria, Cote d'Ivoire. It's extortion as well. We have Indian call center scams. There's uh Jamaican lottery scams. There's cartel uh time share scams. It's it's certainly proliferating and and the concern as you as you've mentioned, uh is that the trade craft that uh these trans Chinese transnational criminal organizations are using in Southeast Asia is being exported around the globe. Uh, we've had concerns from Sri Lanka as well about scam centers rising there. INL has a global footprint and we certainly want to address this concern, uh, where it's predominantly affecting Americans in Southeast Asia, but also getting ahead of the concerns as it expands globally.

And and, Mister Chair, as I hand it back to you, here's what we ought to worry about, that this will just multiply because imagine you're a criminal nar- you know, a criminal group and you just wanna make money. Okay, let's say if I sell drugs, I've gotta buy them, I gotta have arms, I gotta move them, I gotta have boats, some of my people are gonna get killed, if you're doing human trafficking that's hard, but to go online and just rip people off, I mean the the costs of investment up front are very, very low, the risks are much lower than in other kinds of criminal activity, and so that will probably push more of these criminal groups even more into these, into these, so I th I have a feeling, I'm really glad we're doing this hearing today, I think this is a problem that's gonna grow in a real geometric way.

Uh I I think that's a really good observation, I mean these all of these people they're in it for money, and uh what's the easiest way to get money, what's the safest way to get money, and this certainly is ahead of these other uh uh more kinetic type of things that you're talking about. Senator Merkley.

Thank you both very much uh for being so engaged in this in this topic,

Well

and I appreciate this this hearing.

There's so many

I'm thinking about an uh Oregon citizen in Roseburg who was uh uh caught in an online gold investment scam and then went to a recovery service which also turned out to be a scam so was uh double scammed. I was just looking up that organization on the internet, online justice, it now goes to a blank page uh but um it's easy to reinvent such a a firm uh overnight with a new name and a different uh web site. Or and that individual in Roseburg lost a hundred and forty five thousand dollars. An individual in uh Portland who was uh uh contacted by a celebrity imposter and that celebrity imposter said that they were opening a a an acting school in New York uh and uh the person was convinced that was a worthy thing to to do and invested a hundred thousand dollars of course it uh uh disappeared there are so many different strategies people posing as financial advisors uh doing the long scams of building uh online relationships romantic relationships uh individuals posing as as uh representatives of their their bank and so on and so forth. So I think about all of that I'm so glad we're doing everything we can internationally, I wanted to say a a special thank you to the individuals who have been uh taken into these environments as international workers. uh like a Ugandan uh who was recruited, spent seven months in in a Miramar compound, eventually escaped, was willing to share the story about what happened inside, and another individual uh from Cambodia who uh was again given a job offer, uh thought it was legitimate minor work uh but was uh also uh caught and in that web of a a military compound where they couldn't escape, and they had to pose. But here's the thing I'm thinking about. which is a couple of things one that a lot of individuals still don't transfer their money into crypto online they go to these uh crypto ATMs and we've heard reports that more than a majority of the transactions of those crypto ATMs involve scams is that a piece of the puzzle, that you all have been looking at