Taiwan, Telecoms and Our Outlaws of the Marsh

About 10 years ago an American friend in Taipei received a call from a pleasant-sounding woman who warned him to act quickly to prevent his bank account from being hacked. Pressured into transferring funds through his ATM, it took him a fraught half hour to lose his money to the scammers.

It was unfortunate that he was fluent in Chinese, or he would not have been targeted. He reported the crime, but there was little or no likelihood of any real investigation, let alone a prosecution. Since he voluntarily transferred the funds, there was nothing his bank could do about the situation. It was an easy and low-risk money-making strategy for the scammers and the penalty, if caught, was a smack on the wrist and a token fine.

Since then the scam has gone global and evolved to accommodate rampant social media use, spreading to messaging apps like WeChat and QQ. In addition, fraudsters use the latest telemarketing and political party tech, making automated telephone calls or “robocalls” to phish for victims.

Taiwan has even become infamous for producing scammers expert in this field. So much so that if you do a quick google you will find a Quora thread titled, “Why do many Chinese call Taiwan 'The Island of Swindlers?’”

Aside from the fact that Quora is an unreliable source, and China’s pot calling Taiwan’s kettle black is just weird; this may come as news to locals, long-term residents and even visitors, since Taiwan is one of the most peaceful and law-abiding places on Earth.

Last year, Taipei was rated the world’s third-safest city, according to the Numbeo.com Crime Index, behind Abu Dhabi and Munich. In previous years, both the Australian-based Global Peace Index and the United States’ Federal Bureau of Investigation named Taiwan the second-safest country in the world; based on its economic freedom, education, health care, human development and low exposure to crime, robbery and violence.

Yet it is undeniable that Taiwanese has produced a rogue army of engineers, programmers and “black-gold” telemarketers who are leading the world in ripping off the unwary, particularly Chinese speakers. From Beijing to Vancouver, via Malaysia, Kenya and all points between, the fraudsters are periodically tracked down and deported for causing telecom mayhem.

Photo Credit: Reuters / TPG

Local police insist a crackdown on scammers in the 1990s shifted the problem to the Chinese island of Xiamen, which is directly opposite the Taiwan island of Kinmen. They further claim that collaboration with China’s law enforcement officials in the 2000s spurred fraudsters to move elsewhere in East Asia and Africa.

Taiwan has triads, gangsters who took root with Generalissimo Chiang Kai-shek’s (蔣中正) takeover of the island in 1949. They operated KTV bars, gambling halls and took part in politics, but have moved with the times and have been identified as providing the capital and personnel for telecom scams worldwide.

A relatively moribund economy over the past two decades hasn’t helped. Tech-adept and non-violent, the crimes have the added frisson of robbing newly minted Chinese and spreading the wealth Robin Hood-style among Taiwan’s clans.

In 2016, China’s Taiwan Affairs Office accused local fraudsters of skimming more than US$1.5 billion from their citizens every year, like modern-day bandits from the pages of the Chinese classic, "Outlaws of the Marsh."

Breakdowns in cross-Strait agreements on organized crime, the absence of United Nations recognition and relatively relaxed laws allow Taiwan nationals to operate on the margins of international society.

In search of treasure and adventure, these “rebels” target corrupt Mandarins who spirit their ill-gotten gains out of China. Then, they retreat to what third-century Chinese historians called Yizhou (夷洲, “land of the barbarians”) – far from the diktats of the central government.

SFWeekly, based in San Francisco, calls them “part of an international criminal conspiracy cheating immigrants out of millions.” It details the “parcel scam,” when the caller appears to be local and a pre-recorded voice explains in Chinese that the authorities have a document about immigration. If the caller falls for it they are told the document is connected to a money laundering case and the only way to avoid arrest is by transferring money to a Hong Kong account, where they money is conveniently cleaned. The scam can also involve “insurance agents” or “online shopping sites.”

A CBS News story last week on the subject claims that since near the end of 2017, to date, Chinese immigrants in New York were fleeced of between US$1,800 and US$1.4 million, for a total of US$2.5 million. Youmail's Robocall Index says 3.36 billion robocalls were made to in April, about 112 million calls a day.

As recently as last month (April), 46 telecom fraud suspects were repatriated to Taiwan from a number of cities in Poland. On arrival in the western Taiwanese country of Miaoli, where they are based, the scammers were detained pending a trial. The authorities were criticized for going easy on the suspects, who flew back home on a regular China Airlines flight and were reportedly “smug” and “disruptive.” Two pregnant suspects were bailed.

It’s far from the first time that Taiwan’s authorities have been accused of being more tolerant than their law and order counterparts in other countries, particularly China.

In April 2016, 20 fraud suspects were deported from Malaysia to Taiwan – and released soon after landing because of a supposed lack of evidence. The next month, China’s protests convinced Malaysia to deport 32 potential perps to Beijing rather than Taipei. Around the same time, 44 Taiwan nationals in Kenya were put on a plane to Beijing, after being acquitted of illegally operating telecoms equipment. Taiwan’s authorities said this was a kidnapping, but China jailed them anyway, for up to 15 years.

In the meantime, Taiwan’s law enforcement authorities insist they have been acting according to international law. Related telecom fraud laws have been amended three times since 2014 to increase penalties. In April last year, telecom fraud was re-categorized, under the Organized Crime Prevention Act. Gang leaders now face three to 10 years in prison, with fines of up to NT$10 million.

According to the latest Ministry of Justice figures, between April 2016 and March 2018, 484 scam artists were deported back home to Taiwan from foreign countries, while 268 were sent to China.

It’s unlikely you have heard the last of the story. Just don’t rush out to an ATM when the next robocall .

Read Next: The Big International Business of Taiwanese Swindlers

Editor: David Green