How Scammers Launder Money and Get Away With It

The system is so hydra-headed that when governments strike it in one place, it pops up in another

- Selam Gebrekidan and Joy Dong

PHNOM PENH, Cambodia - Every few weeks, fireworks light up the night sky in Cambodia, set off by scammers to salute their biggest swindles.

By the time the shells pop and crackle, somebody's life savings are probably gone. Maybe the victim fell for an online romance scam or bought into a fake cryptocurrency exchange. Whatever the scheme, the money has vanished, sucked into a complex money laundering network that moves billions of dollars at a dizzying speed.

The US Federal Bureau of Investigation (FBI), China's Ministry of Public Security, Interpol and others have tried to combat scammers, who often lurk on social media and dating apps, luring people into bogus financial schemes or other ruses. Telecoms companies have blocked numbers. Banks have issued repeated warnings.

Yet the industry persists because its money laundering operation is so efficient. Unsuspecting victims worldwide lose tens of billions of dollars each year, money that must be scrubbed of its criminal origins and deposited in the legitimate economy. The money laundering system is so hydra-headed that when governments strike it in one place, it pops up in another.

This underworld peeks out in the Cambodian capital, Phnom Penh, home to a global clearinghouse for money launderers. It can be glimpsed, too, in the coastal city of Sihanoukville, a notorious refuge for fraudsters. Scammers ply their trade from call centers, operating in fortified compounds or on the upper floors of unfinished high-rises. Seaside restaurants are packed with money launderers and other criminals doing business over spicy Chinese food.

We obtained a cache of documents, a kind of money laundering handbook, and spoke to nearly a half-dozen scammers and their launderers. The documents are not linked to any one scam or victim but reveal a method for moving illicit money that has proved all but impossible to stop.