\n But Laukkaing\u2019s role in the global scam trade has been widely documented by analysts, academics, reporters and the United Nations Office on Drugs and Crime.\n <\/p>\n
\n Chen\u2019s publicized confession was part of a concerted push by Chinese authorities last year to show its citizens that it is dismantling the scamming networks that have proliferated in the anarchic legal vacuums along Myanmar\u2019s borders, ensnaring thousands of Chinese nationals into their operations and stealing billions of dollars from people around the world, including the United States.\n <\/p>\n
\n Dozens of alleged cybercrime bosses and warlords have been extradited to China and prosecuted, some handed severe punishments, and thousands of other smaller players arrested.\n <\/p>\n
\n But the story behind the rise and eventual downfall of the Kokang crime families is much more complicated and sinister.\n <\/p>\n
\n It\u2019s a tale of betrayal, revenge, and the shifting political sands in a country permeated by civil war, instability and organized crime.\n <\/p>\n
\n For many impoverished farmers in Myanmar\u2019s mountainous Shan state, growing opium poppies has long been a lifeline.\n <\/p>\n
\n Far from the national power centers of Yangon, Mandalay or the military-built capital Naypyidaw, the region is part of the frontierland between Myanmar, Laos and Thailand known as the Golden Triangle, which has for decades been a haven for drug production, illegal gambling, and the trafficking of narcotics, wildlife and humans.\n <\/p>\n
\n Wedged between the Salween River to the west and China\u2019s Yunnan province to the east is the autonomous region of Kokang, where most of the local people are ethnic Kokang \u2013 Mandarin-speaking Han Chinese.\n <\/p>\n
\n Since the country\u2019s independence from Britain in 1948, Chinese nationalists, Burmese communists, Kokang warlords, ethnic rebel militias and military juntas have struggled for influence and control over the territory, with drug production and, more recently, gambling and telecoms scams, defining Kokang\u2019s economy.\n <\/p>\n
\n It\u2019s in this heady mix of lawlessness that a handful of powerful clans \u2013 known as the \u201cfour families\u201d of Kokang \u2013 built their empires, transforming the sleepy market town of Laukkaing into a glittering casino city at the heart of the global scam industry.\n <\/p>\n
\n Between them, the Bais, the Lius, the Weis, and later the Mings, built and operated more than 100 industrial parks \u2013 huge scam compounds where thousands of people, mainly Chinese, were often lured or trafficked, to work defrauding strangers with sophisticated online schemes, according to Chinese prosecutors, Myanmar officials and analysts who study organized crime.\n <\/p>\n
\n Kokang was \u201cthe extreme wild west,\u201d said Jason Tower, senior expert, Global Initiative against Transnational Organized Crime. \u201cA massive cluster of casinos on the China border that are largely focused on bringing in Chinese gamblers. I mean, that is something that should have been a major red flag.\u201d\n <\/p>\n
\n The global scam industry, much of it centered in Southeast Asia, is estimated to be worth between $50 billion and $70 billion, and last year alone conned victims in the United States out of at least $10 billion dollars.\n <\/p>\n
\n Torture, beatings and selling off workers were commonplace, Chinese state media reported, and each family used their own private militias to keep employees in check.\n <\/p>\n
\n Disobedient workers were forced into iron cages or small, dark rooms where they were beaten or kept without food or water until they complied \u2013 a method of punishment used by several of the Kokang clans, according to the Chinese investigations.\n <\/p>\n
![\"A](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/01\/ap25348292609049.jpg\")
<\/p>\n
\n \u201cIn the dark room, seven or eight people beat me together. They used PVC pipes and clubs, they even pulled out my fingernails with pliers. Then they chopped off two of my fingers with a kitchen knife,\u201d a survivor of one of the Bai scam compounds, named only as Liao, told CCTV.\n <\/p>\n
\n Another survivor, surnamed Zhu, said they were initially persuaded to carry luxury watches over the border to make some cash. \u201cOnce I got to the border, I was directly captured and sold. He said if I couldn\u2019t deliver results, he\u2019d sell me off, or bury me alive,\u201d they said.\n <\/p>\n
\n Chinese investigators also found dozens of women forced into prostitution in the compounds. The women had had their documents and phones confiscated and were locked in rooms guarded by armed men until they could work off an arbitrary debt.\n <\/p>\n
\n CNN cannot independently confirm the examples broadcast by Chinese media, but the descriptions of abuse match accounts given by survivors<\/a> rescued from other scam compounds in Myanmar, to CNN.\n <\/p>\n \n While thousands of their workers lived in terror, the families built a life of luxury, throwing lavish birthday parties and banquets attended by influential members of Myanmar\u2019s military and government. They splashed their cash on dozens of luxury cars and watches, helicopters, mansions, and expensive international real estate, Chinese investigations alleged.\n <\/p>\n \n They believed they were untouchable. And for a while, they were.\n <\/p>\n \n But their criminal hubs had become too big, too quickly, and their alleged crimes \u2013 which included the reported killing of multiple Chinese citizens who tried to escape from a Kokang compound \u2013 grew too blatant for the global power on their doorstep to ignore any longer.\n <\/p>\n \n In 2023, China finally stepped in<\/a>.\n <\/p>\n \n But before that final blow, let\u2019s rewind several years to 2009. Back then, Kokang was ruled by a communist warlord (or ethnic revolutionary, depending on who you speak to) known as the \u201cKing of Kokang.\u201d\n <\/p>\n \n Peng Jiasheng had spent much of the 1960s, \u201870s and \u201880s fighting the Myanmar military as a commander with Kokang and communist rebels, and was reportedly deep in the drugs trade.\n <\/p>\n \n He owed his fiefdom to a 1989 truce under which Peng\u2019s ethnic armed group the Myanmar National Democratic Alliance Army (MNDAA) and the military, which ruled Myanmar at the time, agreed to stop fighting.\n <\/p>\n \n Peng later claimed to have moved away from the opium trade and into the business of casinos \u2013 attracting customers from across the border in China, where gambling is illegal.\n <\/p>\n \n But in 2009, the ceasefire broke down when Peng refused to bring his armed group under central control. The military moved into Kokang, routed the MNDAA\u2019s fighters, and Peng fled.\n <\/p>\n \n The success of that operation helped make the name of one of Myanmar\u2019s most notorious generals \u2013 Min Aung Hlaing. Twelve years later, as commander in chief of the powerful military, he would order the 2021 coup that has plunged the country into a civil war that still rages today.\n <\/p>\n \n At the time of the Kokang operation, Bai Suocheng \u2013 the Bai family patriarch \u2013 was a deputy in the MNDAA and had cut a deal with the military to oust Peng. Kokang was later renamed as a self-administered zone, with Bai installed as chairman.\n <\/p>\n \n Three other MNDAA cadres joined Bai in the mutiny. Their respective networks became known as the \u201cfour families\u201d of Kokang, dominating the region\u2019s economy and political landscape.\n <\/p>\n \n \u201cThis was the most serious form of betrayal,\u201d said Tower. Peng would not forget it.\n <\/p>\n \n Bai, his family and associates had companies in hotels, real estate and, of course, casinos backed by a 2,000-strong private army, according to Chinese state media. His son, Bai Yingneng, was a key representative of the military\u2019s proxy political party \u2013 which is currently contesting national elections<\/a>, despite the ongoing civil war \u2013 and was the party chair for Kokang.\n <\/p>\n \n The other clans, headed by Wei Chaoren, Liu Zhengxiang and Liu Guoxi, controlled networks of casinos, developed major industrial and real-estate projects, and were involved in the mining and minerals business. They built up the Kokang Border Guard Force, a paramilitary unit directed by the Myanmar military. Their family members and associates had seats in the Shan state parliament.\n <\/p>\n \n Their conglomerates did business all over the country and even overseas, protected by their military and government positions. They invested in state-backed projects, and money from the casinos and the scams was then funnelled back into Myanmar\u2019s economy.\n <\/p>\n \n \u201cWei controlled the military power. Liu controlled all the finances. The Bais were playing more of that political role,\u201d said Tower. Ming Xuechang, another clan leader who came up later, \u201cwas responsible for the police up in Kokang.\u201d\n <\/p>\n \n \u201cIn terms of overall strength in Kokang, (our Bai family) is definitely number one,\u201d Bai Yingcang, another of Bai Suocheng\u2019s sons, said in a televised police interview broadcast on CCTV.\n <\/p>\n \n \u201cNo matter how wealthy the Liu family is or how powerful the Wei family may be, everyone recognizes us as the leaders. In both political and military circles, our family holds the most influence.\u201d\n <\/p>\n \n The families\u2019 cooperation also extended to local Chinese officials across the border, who worked to develop economic zones and cross-border trade fairs, analysts say, all while Kokang was becoming a haven of unregulated casinos and criminality.\n <\/p>\n \n After the Covid-19 pandemic, online scam operations became their cash cow. And it was win-win for the military, which was in desperate need of cash to fund its vicious civil war after seizing power in the coup of 2021, which removed the democratically elected government of Aung San Suu Kyi.\n <\/p>\n \n Meanwhile, China had for years played a careful game of backing Myanmar\u2019s military regimes \u2013 lending Min Aung Hlaing much-needed economic, military and diplomatic support, while also maintaining close ties to the powerful rebel militias along its borders.\n <\/p>\n \n But Beijing would soon be forced to wade into the murky conflict.\n <\/p>\n \n Peng, the dethroned King of Kokang, had always wanted to reclaim Laukkaing.\n <\/p>\n \n And the coup, coupled with China\u2019s increasing frustration with the military junta\u2019s failure to crack down on the cross-border criminal activity, provided the perfect opportunity for the ailing warlord, who was approaching his tenth decade.\n <\/p>\n \n Now under the reins of his son, Peng Daxun, the MNDAA had formed alliances with two other powerful ethnic armed groups. And in October, 2023, the so-called Three Brotherhood Alliance launched an offensive<\/a> to boot the military from Myanmar\u2019s northeast.\n <\/p>\n \n \u201cOperation 1027\u201d captured strategic border towns and military outposts, and severed vital transport routes for cross-border trade with China. In January 2024 the MNDAA retook Laukkaing, and Peng Jr. declared Kokang liberated. Peng Sr. did not live to see the final stand, having died in 2022.\n <\/p>\n \n Announcing the offensive, the alliance pledged to not only overthrow the military, but also \u201ceradicate telecom fraud, scam dens and their patrons nationwide.\u201d Following the capture of Laukkaing and other areas of the Kokang region thousands of trafficked victims were sent back to China, along with suspected ringleaders, Chinese authorities said at the time.\n <\/p>\n \n Analysts said China likely green-lighted the operation after months of publicly pushing the junta to crack down on the cross-border crime.\n <\/p>\n \n For the Bais, the Lius, the Weis and the Mings, the jig was finally up.\n <\/p>\n \n At least 65 people connected to the families \u2013 including key members \u2013 were arrested, handed over to Chinese authorities, and prosecuted.\n <\/p>\n \n In September, 2025, 11 members of the Ming crime family \u2013 which operated one of the largest scam compounds in Kokang, the infamous Crouching Tiger Villa \u2013 were sentenced to death by a Chinese court. Among their crimes were fraud, intentional homicide, and intentional injury.\n <\/p>\n \n Family head Ming Xuechang, who had also served as member of a Myanmar state parliament, reportedly killed himself during his arrest. His son, Ming Guoping, who was a leader in the junta-aligned Kokang militia, his daughter and granddaughter were also arrested, and 17 others prosecuted, a court statement said.\n <\/p>\n \n Five members of the Bai crime group, including Bai Suocheng and his son Bai Yingcang, were sentenced to death in November. Some 21 members of the syndicate were prosecuted, with defendants handed prison terms of between three years and life.\n <\/p>\n \n Chinese prosecutors in October also brought charges against members of the Wei clan, including the leaders, brothers Wei Chaoren and Wei Huairen. Along with their nephew Chen Dawei, they face charges of telecoms fraud, intentional homicide and extortion among other crimes.\n <\/p>\n \n Members of the Liu gang face similar charges, including fraud, extortion, illegal detention, running casinos, organizing prostitution, and drug trafficking.\n <\/p>\n \n It wasn\u2019t just the Kokang kingpins that China went after last year.\n <\/p>\n \n More than 57,000 Chinese nationals suspected of fraud have been arrested and repatriated to China from Myanmar since 2023, according to China\u2019s Public Security Ministry.\n <\/p>\n \n The ministry in December issued a list<\/a> of 100 wanted fugitive suspects linked to financing and operating telecoms and online scams, including other members of the \u201cfour families\u201d \u2013 with a $28,300 reward for tips that lead to their arrest.\n <\/p>\n \n Documentaries and detailed investigations into the capture of some of the major and lesser players were broadcast as China attempted to alleviate fears from citizens at home and show it is being tough on scams.\n <\/p>\n \n But last year also saw China pivot to focus more on the scam centers along Myanmar\u2019s border with Thailand.\n <\/p>\n ![\"This](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/01\/gettyimages-91588027.jpg\")
<\/p>\n![\"Wei](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/01\/shutterstock-editorial-14325256f-1.jpg\")
<\/p>\n![\"Liu](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/01\/shutterstock-editorial-14325256e-20260103004854589.jpg\")
<\/p>\n![\"Alleged](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/01\/231218161927-02-china-myanmar-scam-warlords-cnn-intl.jpg\")
<\/p>\n![\"A](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/01\/intermediate-people-s-court-of-wenzhou.jpg\")
<\/p>\n![\"In](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/01\/ap25350613558972.jpg\")
<\/p>\n![\"Alleged](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/01\/gettyimages-2201458911.jpg\")
<\/p>\n
![\"Chinese](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/01\/gettyimages-2245761030.jpg\")
<\/p>\n