With over $5 billion stolen from Americans in 2024, Chinese-led scam networks operating in Asia are emerging as a national security threat. The findings come as the U.S. faces internal cuts to federal infrastructure that could hinder its response.
What begins as a friendly greeting on social media, a phone call, or a text message has fueled a digital fraud network operated by Chinese mafias based in Southeast Asia, targeting U.S. citizens, according to a bipartisan congressional report.
The report warns that the U.S. government’s response has been fragmented and insufficient, while these criminal organizations continue to grow, leveraging new technologies to expand their operations.
The U.S.-China Economic and Security Review Commission (USCC), a bipartisan legislative branch commission, released the report in July. It asserts that these scam centers are part of a broader strategy supported by the Chinese government to increase its regional influence and justify a larger presence of Chinese security forces in countries such as Thailand, Cambodia, Laos, and Myanmar.
In many cases, these criminal operations have been tolerated — or even supported — by local authorities, some of whom benefit directly from the revenues generated by these activities.
In 2024 alone, Americans lost at least $5 billion to these networks, a figure that rose more than 40 percent compared to the previous year, the report states.
Scammers, many using artificial intelligence, dating apps, and social media platforms, emotionally manipulate their victims over several months in what are known as ‘pig butchering’ scams — a process of emotional ‘fattening’ before the financial ‘slaughter.’
Criminal groups have been able to operate with relative impunity thanks to their strategic alignment with the Chinese government’s interests, the report warns. Some promote the Belt and Road Initiative, the ambitious global infrastructure plan led by Chinese President Xi Jinping, and spread propaganda favorable to the Communist Party, while funding infrastructure projects in the region. In exchange, they have received institutional backing, contracts with state-owned firms, and official tolerance.
The USCC, created in 2000, analyzes national security risks in the U.S.-China relationship. As tensions with Beijing escalate, the commission has become increasingly influential in shaping U.S. foreign policy.
In addition to economic and diplomatic harm, the report warns that Chinese security forces have seized thousands of devices during raids in Southeast Asia, potentially accessing sensitive data from U.S. citizens.
The victims, the strategy
While Washington’s response has been limited, the real-world consequences are increasingly visible in communities across the country.
Marisel Medina, a 60-year-old resident of Florida, often receives text messages purporting to be from pharmacy providers or recruiters from the job site Indeed. The messages offer simple, high-paying jobs, but they require her to either contact a number or click on a link that redirects her to a WhatsApp-connected website.
“I always think it’s real because I’ve looked for work on that app,” Ms. Medina told Itempnews, showing her phone with a dozen suspicious messages she’s received in recent weeks. “But then I realize it’s all fake and feel disappointed.”
Scams often begin with a simple text message claiming a mistaken identity. After a brief apology, the scammer strikes up a conversation. From there, outcomes vary depending on the victim’s awareness.
According to the report, while these operations are physically based in Asia, their impact hits the U.S. hard, as Chinese criminal networks exploit popular U.S. platforms—social media, dating apps, and job sites—to find endless streams of victims.
Through carefully crafted messages, fake photos, and AI-generated profiles, scammers establish relationships that lead to financial devastation.
Daniel Strohauer (in the picture at the beginning of this article), a maintenance worker at a flower shop in South Florida, received an unusual text message on his 40th wedding anniversary. Someone was trying to make contact.
He laughed — by now, he receives such messages daily, often from women scammers seeking to lure him. At nearly 80, he’s heard of friends and acquaintances who’ve lost their life savings to these romance scams.
In 2024, Florida ranked second in the U.S. for cybercrime complaints, with nearly 43,000 cases reported to the FBI. Economic losses exceeded $1.2 billion — second only to California — making Florida one of the states hardest hit by the growing digital fraud industry, according to the FBI’s Internet Crime Complaint Center (IC3).
The congressional commission warns that without a more coordinated response — combining diplomacy, cybersecurity, cooperation with Southeast Asian governments, and pressure on major tech companies — Americans will continue to fall victim to a booming criminal industry.
At the same time, the report notes that Beijing’s tolerance for these networks is enhancing its geopolitical influence and deepening the dependence of several Asian countries on China’s operational and financial capabilities.
While the FBI has launched initiatives like Operation Level Up to alert potential victims, and the Treasury Department has sanctioned groups linked to money laundering, the U.S. response remains insufficient.
Despite the threat, President Donald Trump has avoided direct statements on Chinese criminal networks. However, the report and its warnings come at a time when the White House is weakening the federal workforce and infrastructure, undermining the government’s ability to respond to the threat posed by China.
Although Trump suggested during his first term that China was behind certain cyberattacks, he dismantled key bodies such as the Department of Homeland Security’s Cyber Safety Review Board in January, weakening the government’s ability to confront the issue. So far, his administration has not outlined a clear strategy for tackling the rise of digital mafias in Southeast Asia.
In a recent case that mirrors the commission’s findings, five individuals pleaded guilty in June to laundering more than $36.9 million from U.S. victims in a digital currency investment scam based in Cambodia.
According to the Justice Department, the scammers — including two Chinese nationals — contacted their victims through social media, phone calls, text messages, and dating apps. They gained their trust and convinced them to invest in fake projects. The money was routed through shell companies in the U.S., converted into cryptocurrency, and sent to fraud leaders in Asia.
The report leaves no room for doubt: “If the United States fails to take firm, coordinated action to address the growing threat of scam centers, it will continue to lose strategic ground in Southeast Asia to the People’s Republic of China.”
In a world where crime, technology, and power converge, inaction not only costs money — it erodes Washington’s global leadership. The U.S. is not just losing money: it’s ceding ground to an adversary that has weaponized crime as a tool of power.