Li, Hsi-ho
Commissioner
Criminal Investigation Bureau
Republic of China (Taiwan)
Fraud is disrupting people’s livelihoods in the postpandemic era
The internet is very much part of daily life in the postpandemic world.
Working, studying, shopping, and conducting other transactions online
have become commonplace. But the digital financial services that have
developed from these activities are an easy target for criminal
organizations and have also made investigating crime more complicated
for the police. In 2021, Taiwan reported fraud-related losses of NT$5.61
billion (equivalent approximately to US$186 million), indicating that
fraud has seriously damaged national economic development. There is
little doubt that fraud poses a formidable challenge to countries
worldwide.
In recent years, fraud has become more diverse and sophisticated and
scammers are working in new and constantly evolving ways. Schemes
involving cryptocurrency—recently a hot commodity—have inflicted
heavy losses on victims. When Taiwan’s police investigate cases, they
often encounter difficulties arising from the fact that servers, recipient
accounts, and cryptocurrency exchange platforms used by perpetrators
are based overseas. This prevents officers from stopping the transfer of
money in time to help the victims and makes it more difficult to track
down suspects.
The inflow of profits from fraud and other illegal activities involves
money laundering, tax evasion, and other crimes that undermine
domestic financial regulatory systems and erode the sovereign authority
of governments. Police cooperation between Taiwan and other countries
would help reduce the number of fraud cases and contribute to the
administrative efficiency of governments worldwide.
International cooperation is needed to combat the use of virtual
currencies for money laundering
Virtual currencies are a high-risk-high-reward commodity. They have
grown increasingly popular in investment markets. As the average
person does not fully understand how virtual currencies work, these
investments have become a common instrument of organized fraud.
Taiwan police have recently discovered that money laundering by
criminal groups using virtual currencies mostly involves proceeds from
investment fraud. Victims are lured into registering with a fake
investment platform and when they try to withdraw funds after making a
profit, the customer service system—operated by the criminal
group—requires them to pay additional taxes of 10 to 20 percent before
the withdrawal can be approved. Even if the payment is made, the
criminal group continues to fabricate further demands that the account
be replenished in order to cover, for example, transaction fees.
Criminal organizations have shifted their tactics from buying mule bank
accounts to using virtual currency wallets, thus lowering the risk of
police detection when funds are withdrawn. The gangs open phony
accounts with virtual currency exchanges, where identity verification
procedures are relatively relaxed. Once a victim makes a deposit into a
designated account, the scammers quickly transfer the money multiple
times, eventually moving it to a cold wallet. It is then switched to
another exchange where it is converted into legal tender. Crypto wallets
that do not require user authentication and have no upper limit on
transactions are a convenient tool for money laundering. The victim,
perpetrator, and location of the crime are usually in different countries.
Thus, transnational cooperation is needed to effectively crack down on
the common practice of concealing illegal gains and converting them
into legal assets.
Taiwan’s police strive to protect victims of organized human
trafficking
Anticipating that the number of job seekers would increase due to
involuntary unemployment driven by the pandemic, criminal
organizations set up call centers in various parts of the world and
recruited people on a large scale through online advertising. The
scammers used attractive slogans like “easy job” and “fast financial
freedom” and promised stable and legal employment in other countries.
Victims only discovered after arriving that the jobs involved fraud or
were not what they expected. Some even had their passports confiscated,
were deprived of their freedom, and were beaten or sold to other
unlicensed businesses if they refused to comply. If they asked to quit,
they were forced to pay exorbitant fines or threatened with organ
removal to compensate the gangs.
Human trafficking is a serious issue that needs to be addressed by the
global community. Fraud rings take advantage of the convenience of the
internet to recruit people of different nationalities through multiple
channels to work in scam call centers around the world. Taiwan police
have long spared no effort to crack down on this type of transnational
crime. This year, they have received reports of Taiwanese citizens being
held against their will and forced to engage in fraudulent activities in
Cambodia, the Philippines, the United Arab Emirates, and other
countries by illegal organizations set up by Chinese nationals.
International cooperation is urgently needed to rescue the victims and
fight such crimes.
In 2021, Taiwanese and Vietnamese police jointly cracked down on a
fraud ring in Taiwan that was forcing Vietnamese migrants who had
overstayed their visas to engage in scams targeting their fellow
compatriots. The racket earned the criminals VND3.29 billion
(equivalent to about US$140,000). In cooperation with other foreign law
enforcement agencies, Taiwan’s police have uncovered several cases of
organized crime outside Taiwan linked to cross-border fraud and human
trafficking. They worked with Montenegro in 2020 and with Turkey in
2021 to clamp down on organized crime involving perpetrators, victims,
and locations in multiple countries. In the joint operation with
Montenegro, 92 suspects were arrested for defrauding more than 2,000
victims of a total of NT$632.78 million (equivalent roughly to US$21
million). These cases not only underscore the importance of cooperation
among countries to combat crime but also highlight the need for
concerted efforts to protect human dignity and values.
Taiwan’s contribution will benefit the world
Taiwan has a high regard for the rule of law and human rights. The
Constitution of the Republic of China (Taiwan) upholds the ideal that
national sovereignty resides with the people and explicitly provides for
the protection of people’s rights and freedoms. The government strictly
prohibits any action that infringes on the rights of others. Transnational
crime often involves multiple countries and areas, which can hinder
investigations. In the postpandemic world, criminal tactics will continue
to evolve and new methods will emerge. In investigating new forms of
criminal activity, experience is invaluable. Taiwan is willing to share its
experience in solving crimes. Today, telecommunications and cyber
fraud are conducted across borders and transnational crime rings are
organized and departmentalized. This poses a challenge to the
sovereignty of nations and undermines livelihoods, economies, and law
and order. Taiwan is keen to exchange intelligence with partners and
assist other countries in staving off threats from overseas and combating
organized crime within their borders.
Police officials are entrusted with the heavy responsibility of
maintaining law and order. Their top priority is to protect people’s lives
and property. Given that crime has taken on increasingly diverse forms,
police are facing even greater challenges. To fight modern crime, law
enforcers need a firm understanding of the latest criminal developments
so that they can prepare for the future and be ready to respond
decisively. Looking ahead, Taiwan’s police will continue to work with
partners worldwide. No place should be overlooked in fighting the
pandemic or tackling crime. The international community can count on
Taiwan.
