China-linked scam networks operating out of Southeast Asia drained at least $10 billion from American victims in 2024, top US lawmakers alleged on 20 May, warning that the fraud ecosystem has escalated into a direct national security threat. The findings emerged from a bipartisan investigative report released by the House Select Committee on China.

Industrial-Scale Fraud, Congressional Findings

House Select Committee on China Chairman John Moolenaar described the operations as running at an 'industrial scale,' driven by criminal groups with links to China and sustained by corruption, weak governance, and illicit finance flows. 'These victims are our families, neighbours and friends, and they are being ripped off by sophisticated criminal networks linked to China,' Moolenaar said.

The committee's bipartisan report concluded that these scam networks are not isolated criminal enterprises but form part of a broader ecosystem encompassing fraud, human trafficking, cybercrime, and illicit finance. Moolenaar acknowledged that the Chinese government does not centrally direct the scam compounds, but argued its 'deliberate failure to combat this threat' has actively enabled their expansion.

Human Trafficking at the Core

Ranking member Ro Khanna, the Indian American Congressman, said many of these networks operate from compounds in Southeast Asia controlled by organised criminal groups with ties to China. 'All too often, the person on the other end of the text is a human trafficking victim, locked in a scam compound with instructions to steal as much money from victims as possible,' Khanna said.

The committee's investigation found that the headquarters of Prince Group in Cambodia was constructed by a Chinese state-owned enterprise — a detail that underscores the structural entanglement between state-linked entities and criminal infrastructure. Khanna was careful to note, however: 'While there are Chinese ties, the scam is not a vast conspiracy by the Chinese government. We can't solve this crisis without their cooperation.'

Experts Call It a 'Scamdemic'

Erin West, founder of Operation Shamrock, testified that victims were not receiving adequate assistance from law enforcement. She quoted one victim asking: 'Why in the United States in 2026, are victims having to solve their own crimes?' West characterised the crisis as a 'Scamdemic,' insisting it was 'not simply fraud' but a matter of national security.

Independent analyst Jacob Sims warned that the deeper threat lay not only in the physical compounds but in 'the political architecture that protects it,' describing Cambodia as 'an advanced case of what criminal authoritarianism looks like in the digital era.'

Jason Tower, a senior expert at the Global Initiative Against Transnational Organized Crime, said China's domestic crackdown on such operations had simply pushed scam networks offshore. 'This is not a Southeast Asia problem. This is a global China problem,' Tower said.

Legislative Response and Next Steps

Lawmakers also pressed witnesses on the enabling role of social media platforms, cryptocurrency networks, and private companies in facilitating these scams. Chairman Moolenaar urged Congress to pass the bipartisan Dismantle Foreign Scam Syndicates Act, which would establish an inter-agency task force specifically mandated to counter foreign scam syndicates. The bill's passage would mark the first dedicated legislative mechanism targeting this threat at the federal level.

With losses running into the tens of billions and human trafficking woven into the operational model, the committee's findings signal that Washington is moving to treat online fraud originating from China-linked networks as a geopolitical challenge — not merely a consumer protection issue.