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The Isle of Man’s gambling regulator has rejected and described as “disappointing” a United Nations report that links the co-founder of a purged online gambling licensee to criminal operations in Southeast Asia.
In the latest inter-government analysis of online gambling and global crime, the United Nations Office on Drugs and Crime (UNODC) on October 7 released a report into cross-border criminal networks in Southeast Asia and the merging of cyber-scamming, criminal financiers and advanced technology.
The bulk of the report focuses on the familiar intersection of regional criminal operations such as scamming and human trafficking with the online and land-based gambling segments, with recommendations targeting members of the Association of Southeast Asian Nations (ASEAN).
But several sections of the report focus on alleged Asian criminal links to the Isle of Man, and particularly to financial and commercial transactions involving online gambling licensees.
In a subsection titled “Expansion of Asian crime syndicates beyond the Golden Triangle”, the UNODC report reviews the April 2024 police raid on licensees King Gaming Limited and Dalmine Limited and an affiliated virtual asset company, and their subsequent deregistration by the Gambling Supervision Commission (GSC).
Seven suspects were arrested during the raids, and three more were arrested the following month. All were released on bail, but police have declined to comment on the status of their cases, or if the suspects remain on the Isle of Man.
The UNODC report cites a decision by a court in China’s Henan Province, first revealed by the BBC in August, that convicted six of some 100 employees moved by the licensees’ parent company from gambling operations in the Philippines to the Isle of Man.
It also names one of the co-founders of the parent company as Liang Lingfei, a Chinese-born Dominican national who travels under the name “Bill Morgan”, the co-founder of Isle of Man-registered Manx Internet Commerce (MIC).
The BBC report alleged that “dozens of Chinese workers” brought from the Philippines ran MIC cyber-scamming operations out of the Seaview Hotel and former bank offices in Douglas, the Isle of Man’s capital, between January 2022 and January 2023.
The UNODC report alleges that one of the “co-founders” cited in the Chinese court document, whom the UNODC report identifies only by code, is “listed as Chairman of a Mekong-based [sic] payment and investment firm which has been reported for investment fraud on various scam alert websites”.
A fragment of the Chinese court document shown in the BBC report names two co-founders of this business group, with Liang Lingfei confirmed and the other name redacted by the BBC. It was not immediately clear which of the two is the focus of the UN report.
The UNODC then alleges that the co-founder “appears to have developed strong connections to Zhao Wei and the GTSEZ [Golden Triangle Special Economic Zone in Laos] in recent years prior to his expansion into the Isle of Man”.
Zhao Wei, who controls the Golden Triangle zone, has been blacklisted by the US government over suspected criminal activity, including “drug trafficking, human trafficking, money laundering, bribery, and wildlife trafficking”.
“While the precise nature of their business dealings remains unclear, the individual features in official GTSEZ media packages relating to a major launching ceremony dating back to December 2018 where [the co-founder] can be seen being appointed as the President of a Chamber of Commerce and Industry by Zhao Wei,” the UNODC report says.
Although the UNODC report does not directly criticise the Isle of Man, it implies that financial transaction monitoring and other controls are substandard and that background checks on the codenamed individuals and companies were insufficient.
Jim Hughes, the GSC director of operations, said on Friday (October 25) that the regulator was “disappointed to read in the UN report an allusion to lax regulatory controls in the Isle of Man”.
“The GSC conducts its regulation in line with international standards,” he wrote in an emailed response to questions from Vixio GamblingCompliance.
“The GSC’s mutual evaluation by [Council of Europe financial transactions overseer] Moneyval in 2016 gave the GSC a very high technical mark for its AML/CFT [anti-money laundering and counter-terrorism financing] framework and we do not agree with the UNODC report’s conclusion that we have inadequate controls,” Hughes said.
“The GSC has entry controls in place for businesses seeking licences and an ongoing supervision regime.
“Further, since 2016 the GSC has continued to strengthen its supervisory reach and last year created a new, dedicated division to carry out AML/CFT inspections and enforcement, a division that is fully resourced with skilled and experienced staff.”
Hughes added that the GSC has shown that it acts on its “regulatory remit” wherever it detects non-compliance, “as can be seen with recent, publicised enforcement cases”.
Still, local online gambling regulation has come under closer media scrutiny following the arrest of the ten nationals — reportedly all Chinese nationals — and licence cancellations.
Since then, the GSC has tightened monitoring, released new enforcement protocols, fined a gaming platform ex-licensee in a separate case and last week released licensee compliance surveys.
However, adding to potential embarrassment for the Isle of Man government is a case of mass human trafficking and coerced labour on Isle of Man soil, uncovered only in recent weeks.
There is no evidence of the 241 workers being involved in the gambling industry. But the scandal reinforces that the distance between European jurisdictions and Southeast Asian crime zones has substantially narrowed.
A senior lawyer at local firm BridsonHalsall Advocates and expert on immigration syndicates said on October 17 that she had discovered more than a dozen exploited foreign workers on the Isle of Man after interviewing a Filipina who had been scammed into performing menial work.
Maria Bridson said during an event at the Promenade Methodist Church Hall that she had interviewed “Jenny” after being alerted to her circumstances: arriving on the island expecting legitimate white collar work but being forced to process shellfish while being paid below the minimum wage.
Jenny was living in cramped conditions, subject to arbitrary deductions and a steep departure “fee” at the hands of the syndicate, and threatened with being sent to the police and deported if she complained, the Isle of Man Today reported on Tuesday (October 22).
“When I met Jenny she was pale and scared. When I went back to meet her a second time there were 15 other people waiting to see me, men and women all who had the same story,” Bridson said.
“They had all paid between £1,500 and £25,000 [$1,950 and $32,400] for their jobs here in the Isle of Man,” she said.
Many of the migrant workers Bridson interviewed reported suffering sexual assault and/or racism.
“It’s really humbling to watch adult men and women cry in front of you. And ever so scared for exactly the same reasons as Jenny — they were all in debt and the very worst thing that can happen for them is to be sent home penniless and in shame.”
Bridson said the Isle of Man Constabulary is investigating several cases of organised immigration crime.
The Department of Home Affairs and the Isle of Man Constabulary did not respond to Vixio requests for comment before time of publication.
