Combatting the Scamdemic
A California Response to an Escalating National Security Crisis
The following is Operation Shamrock Founder and CEO Erin West’s statement for the record for the Little Hoover Commission Hearing on Financial Scams & Fraud, held September 25, 2025.
By statute, the Little Hoover Commission is a balanced bipartisan board comprised of 13 members — five public members appointed by the Governor, four public members appointed by the Legislature, two Senators and two Assemblymembers — and staffed by seven permanent employees and occasional student interns.
Statement for the Record
Little Hoover Commission: California’s Independent Voice for Reform
Hearing on Financial Scams & Fraud
September 25, 2025 | Sacramento, California
Erin West, Founder and CEO, Operation Shamrock
Combatting the Scamdemic: A California Response to an Escalating National Security Crisis
URGENT: The Crisis Has Expanded to Target Our Children
I am Erin West, a career prosecutor who left the courtroom after 26 years to fight the scamdemic full-time. What began as financial fraud draining retirements has now escalated into a national emergency. Last year, I testified before the House Financial Services Committee about the devastation pig butchering scams were inflicting on American families. Since then, the crisis has exploded. It is no longer only about stolen retirement savings, broken families or human trafficked victims—it is about the sexual exploitation of American children.
Ground-breaking research from International Justice Mission reveals at least 493 child sextortion cases already traced to scam compounds, with more than 18,000 additional child exploitation reports tied to the same networks. This is so much more than fraud. This is:
A family crisis stealing life savings and driving children to suicide.
A human rights crisis built on slavery and torture.
A national security crisis fueling Chinese military expansion in the Southeast Asia.
In addition to the dramatic new development threatening our children, the scamdemic has gotten exponentially worse in the last 12 months:
The physical footprint has grown
The level of violence inside the compounds has been documented
The enemy has sharpened its skills using technology
State-sponsored networks continue to operate with impunity
National security risks continue to grow
That’s the problem.
According to data from the 2024 FBI IC3 report, California is once again the state with the highest number of victims AND the most money stolen in internet crime.
Here’s the statewide solution from a career prosecutor who has driven the local and state law enforcement response from the beginning: a coordinated statewide solution that leverages the unique capabilities of the already existing state-funded high tech task forces. Pursuant to Senate Bill 1734 and codified in Penal Code 13848, the California High Technology Theft Apprehension and Prosecution program was created to meet a 1998 demand for more specialized enforcement in computer and network intrusion and financial fraud. More than 25 years later, it’s time to revisit this language and update it considering today’s threats.
What California must do immediately:
Demand Appointment of a California Scam Czar – to manage a statewide intelligence center to drive disruption and recover victim losses.
Fund specialized analysts at every state funded high tech task force – 5 task forces, like the REACT task force where I worked, already exist and could be leveraged to corral statewide data and create focused responses. We should fund expert analysts in cryptocurrency tracing and child exploitation.
Create a single California reporting portal – let’s stop the piecemeal reporting to California agencies who are nonresponsive and collect the specific data that will allow us to piece together the networks.
The Addition of Sextortion Mandates an Immediate Government Response
A groundbreaking study released weeks ago by International Justice Mission has uncovered the chilling convergence of two forms of exploitation: child sextortion and the Southeast Asian scam compounds that have been systematically draining American wealth. The research identified 493 cases of child sextortion directly linked to scam compounds, with an additional 18,017 child exploitation reports containing IP addresses traced to known Southeast Asian scam sites across Cambodia, Myanmar, and Laos. At least 40 locations throughout Cambodia, Laos, and Myanmar associated with forced scamming were found to also have links to financial sextortion of children.
This represents a catastrophic escalation. These criminal syndicates are no longer content with just stealing American savings—they are now sexually exploiting our children for profit, using the same infrastructure and methods that have already proven devastatingly effective against adult victims.
From October 2021 to March 2023, the FBI received over 13,000 reports of online financial sextortion of minors, involving at least 12,600 victims—primarily boys—and leading to at least 20 suicides. In the six-month period from October 2022 to March 2023, the FBI observed an increase in reporting of financially motivated sextortion incidents involving minor victims of greater than 20% compared to the same period the previous year.
The IJM research reveals this is not coincidental. The same criminal infrastructure being used to steal billions from American adults is now being weaponized against our children. These trafficking victims at the compounds may be coerced into running financial sextortion scams which have impacted children, creating a double layer of victimization—both the trafficked workers forced to commit these crimes and the American children being sexually exploited and extorted.
THE PROBLEM: The Scale of Criminal Operations Is Unprecedented
With the addition of sextortion to the menu of criminal activity run by transnational organized crime in Southeast Asia, the criminal infrastructure we face represents the world's fastest growing and most dangerous illegal industry. Cryptocurrency scams reached unprecedented levels in 2024, with the FBI’s Internet Crime Complaint Center (IC3) reporting that cryptocurrency-related crimes generated $9.3 billion in losses from nearly 150,000 complaints—representing a staggering 66% increase from the previous year.
The key issue of note here is this — exponential, unabated increase year on year.
The growth of transnational organized crime is rapidly exceeding our ability to catch it.
Conservative estimates place annual revenue generated by regional scam syndicates between $50 and 75 billion, though the United States Institute of Peace estimates global financial losses have reached $64 billion annually. This makes transnational fraud perhaps the most dominant economic activity in the entire Mekong sub-region—equivalent to nearly half of total GDP in Cambodia, Myanmar, and Laos.
But these aren’t just numbers. These are real people – your cousin, your neighbor, your Uber driver – who have lost everything that they have.
Just yesterday I spoke to a 70-year-old retired high school drama teacher who had her entire life savings stolen from her and was deceived into taking out a loan on her previously-paid-off home and opening numerous credit cards. She now has taken on a $16-hour job to avoid bankruptcy.
Worse yet, victims are still not getting help from law enforcement. A California woman told me this week that when she couldn’t get help from the Sacramento police, she escalated to the Chief, who told her that they are overrun with murders and robberies and cannot help her.
Another victim told me yesterday that he tried to report to the Orange County Sheriff, but was told that they had no jurisdiction and it was up to FBI to solve this crisis.
Considering the lack of federal response, these solutions do not serve Californians. We must handle the problem internally.
Increase in Footprint
These operations have industrialized at unprecedented scale. Satellite imagery reveals the construction of entire "scam cities"—massive walled compounds built from farmland in just three years. KK Park in Myanmar grew from empty farmland in 2020 to a fortified city housing an estimated 10,000 enslaved workers by 2023, with construction continuing around the clock. Similar compounds operate across at least 10 countries, with cement trucks crossing international borders daily to expand these criminal facilities.
Since I testified I’ve been on the Thai side of the banks of the Moei river twice and have personally witnessed the growth of KK Park, one of the original scam cities built for the sole purpose of housing human trafficked workers and forcing them under torture to steal money from the rest of the world. The first two photographs show the initial rapid growth of KK Park from 2020 to 2023. The final two photographs have been taken since I’ve testified and show continued construction with room to grow.
The very same boom in construction is happening elsewhere in Southeast Asia. In November 2024, I drove 1000 miles through Cambodia and witnessed the intense growth of construction country-wide. Out of corn fields and dirt patches in the middle of nowhere rise massive dormitory-style towers built for the sole purpose of running scam operations.
The sheer scale is jaw-dropping.
The Human Rights Abuses Rise to the Level of Torture
In Southeast Asia, organized criminal syndicates have forcibly coerced hundreds of thousands of people into online scam operations. Estimates from 2023 indicate that at least 120,000 in Myanmar and 100,000 in Cambodia are being held and made to conduct scams under conditions tantamount to torture, forced labor and other serious human rights abuses. As we enter late 2025, the visible increase in the number of scam facilities leads to the conclusion that two years later, the number of people forced into slavery is likely twice or even three times that amount.
Amnesty International’s 2025 report revealed that victims are sold between compounds, confined in prison-like facilities with armed guards, and tortured with electric shock batons if they refuse to work or escape.
I’ve spoken to an African man who verified Amnesty’s report: this 23-year-old Ugandan, who goes by “Small Q” was lured to Asia with promises of IT work, only to find himself trapped in a walled compound guarded by men with assault rifles. When he tried to escape, they shot at him and then hung him by his arms for three days.
I am currently in contact with a Ugandan man in forced labor in Cambodia, who tells me that he is unable to walk after being repeatedly struck with an electric baton.
Physical evidence corroborates these accounts. In the Philippines I toured a compounded raided by the government and saw the torture rooms where victims would be chained to the walls and beaten.
Raided Compound in Metro Manila, Philippines, 2024. Photo: Erin West
The Enemy Has Sharpened Its Skills Using Technology
Chinese organized crime syndicates operating from Southeast Asia have weaponized artificial intelligence and expanded their operations globally. AI deepfakes are now so sophisticated they fool facial recognition software, with scammers using AI-generated audio and video to impersonate romantic partners, financial advisors, and law enforcement. Recent victims report being convinced they were video-calling former beauty queens, complete with matching moles and mannerisms, when they were actually speaking to AI-generated deepfakes. Voice cloning creates pitch-perfect audio in any language or accent, while scammers purchase deepfake software for as little as $200.
This technological evolution threatens to scale their operations from thousands to millions of simultaneous victims—including our children. Criminal organizations now operate “Scam-as-a-Service” platforms, selling ready-made templates, scripts, and automated tools like franchise opportunities. They maintain actual HR departments posting fake job listings on legitimate job sites, run training programs teaching psychological manipulation, and use performance management systems with daily targets and bonuses.
State-Sponsored Criminal Networks are Operating with Impunity
What makes these criminal operations uniquely dangerous is their integration with state power structures. Academic research reveals that endemic corruption, reliable protection by governments, and co-perpetration by party elites are the primary enablers of this trafficking-cybercrime nexus. State institutions in Cambodia, Myanmar, and Laos systematically and insidiously support and protect the criminal networks involved in transnational fraud and related human trafficking.
Transnational organized crime expert Jacob Sims recently observed that this represents “the first time in modern history that a nation has industrialized human trafficking as a pillar of economic development.” The pattern of state complicity is undeniable. More than a third of the Cambodian compounds (20 of 53) were subject to police or military interventions, yet Amnesty documented human rights abuses continuing at all 20 locations even after state intervention. In the most egregious cases, compounds were “raided” multiple times – with one compound experiencing at least four police interventions – yet torture and trafficking continued unabated. Police interventions are “largely controlled by scamming compound bosses” who simply hand over requested individuals at the gate while keeping the torture facilities operational.
This is not traditional organized crime operating in the shadows—this is vertically integrated criminal industry that is a core feature of ruling party strategy. Sims reports that in Cambodia alone, formal estimates of scam revenue range from $12.5 to $19 billion per year, equivalent to as much as 60% of GDP and significantly eclipsing the country’s largest formal sector. The ruling Cambodian People's Party maintains power through a highly effective suppression of domestic dissent, monetized and sustained by extractive and predatory activities, chief among them scam profits.
The significant influx of sophisticated Chinese criminals has injected new capacity and capital into these state-abetted criminal undertakings. Sims notes that as criminals were pushed out by reforms in China and pulled in by the gravitational force of fully criminalized political-economic environments, their presence and capital infusion has served to ossify authoritarian dominance while creating the most powerful criminal network of the modern era.
A Generational Wealth Transfer Fueling Regional Militarization and National Security Threats
The sheer scale of the transfer of a generation’s worth of wealth into the hands of organized crime syndicates is reason enough to sound national security alarms but only covers part of the risk. Simultaneously we are seeing Chinese military expansion in Southeast Asia through two critical infrastructure projects that pose direct threats to U.S. national security:
Ream Naval Base: China has gained preferential access to Cambodia's Ream Naval Base through extensive upgrades and construction, with Chinese warships maintaining an almost continuous presence since December 2023. Two Chinese navy ships have are docked, making exclusive use of a new Chinese-funded pier while no other foreign vessels, including Japanese destroyers, were permitted to dock at the upgraded facilities. China and Cambodia officially opened a joint logistics and training center at Ream in April 2025, providing China with a strategic foothold near the South China Sea.
Dara Sakor Airport: The Chinese-built Dara Sakor International Airport features a 3,400-meter runway capable of handling military aircraft, built as part of a $3.8 billion development covering 20% of Cambodia's coastline under a 99-year Chinese lease. The U.S. Department of Defense has raised concerns that the airport could serve as a PLA Air Force base, with the facility positioned to operate in tandem with Chinese island-bases in the South China Sea.
While it seems unclear why the Chinese would spend $350 million on an airport which appears to be located in the middle of nowhere on an isolated point, its strategic location is obvious when you zoom out to see that it is 38 miles from the Ream naval base.
National Emergency Requiring Immediate Action
Children are now collateral victims of organized criminal networks operating at scale with state protection. These operations generate hundreds of millions in illicit revenue, yet enforcement remains weak. If scam compounds continue expanding into crimes against children, the consequences will be catastrophic.
We are facing a convergence crisis where:
American wealth continues flowing to organized crime at unprecedented rates
American children are being sexually exploited by the same networks
Enslaved trafficking victims, including children, are tortured with electric shock batons to force them to target Americans
The perpetrators operate with virtual impunity from state-protected Southeast Asian compounds where torture occurs with government acquiescence
Revenue generated by this criminal industry comprises more than 40% of the combined GDP of Cambodia, Myanmar and Laos
We are simultaneously watching Chinese military expansion and regional destabilization
THE SOLUTION: The Whole-of-Government Solution We Need
The American response remains tragically disorganized. We are wasting resources, replicating efforts, and losing the war one household—and now one child—at a time. What we need is not another task force or committee—we need a fundamental reorganization of how we approach this threat using the intelligence infrastructure we already have.
A California Scam Czar and Coordinated Task Force
We must immediately identify a California Scam Czar empowered to coordinate a whole-of-state response that addresses both financial fraud and child exploitation simultaneously. This isn't about creating new bureaucracy—it's about recognizing that every agency with tools in its arsenal must be at the table. Each possesses unique capabilities that, when properly coordinated, can devastate these criminal networks and protect both American wealth and American children.
Leveraging Our Already Existing Task Forces for Intelligence Sharing
We don't need to build new intelligence infrastructure—we need to properly utilize the ones we already have. Our high tech task forces were designed exactly for this type of information sharing and threat analysis. Instead of expecting California’s hundreds of local law enforcement agencies to develop both cryptocurrency expertise and child exploitation investigation capabilities, we should position specialized analysts at our state task forces.
This approach solves multiple problems simultaneously:
Expertise Concentration: Rather than training thousands of local investigators in complex blockchain analysis and child sextortion patterns, we place expert analysts at each task force center to serve their entire region.
Pattern Recognition: Task forces can identify regional patterns across multiple jurisdictions—when the same criminal network contacts both adult investment victims and children for sextortion in different counties, when similar platforms target the same geographic area, or when money flows follow predictable regional routes.
Rapid Triage: Task force analysts can quickly evaluate whether funds are still recoverable and children are in immediate danger, routing urgent cases back to local authorities for immediate action while escalating complex multi-jurisdictional cases to federal partners.
Intelligence Development: Task forces can develop comprehensive threat pictures, tracking how these criminal networks operate in their areas and feeding actionable intelligence both up to federal agencies and laterally to other task forces.
Enhanced Child Protection Protocols: The sextortion connection demands immediate enhancement of our task force capabilities:
Dedicated Child Protection Analysts: Each task force must have specialists trained in both cryptocurrency tracing and child exploitation investigation methods
Real-time Cross-referencing: Systems to immediately identify when IP addresses associated with financial scams are also linked to child exploitation reports
Rapid Response Protocols: Given that sextortion can lead to self-harm and suicide among teenage victims, task forces need emergency response capabilities for child cases
Divide and Conquer Strategy
Our state government's strength lies in our diverse agencies' specialized capabilities. We must acknowledge these respective strengths and divide tasks accordingly:
Local Law Enforcement: Until a better statewide reporting system is created, local law enforcement should continue serving as the frontline for victim reports and human connection. When analysis indicates funds can be quickly recovered or children are in immediate danger, local authorities should act immediately using their established community relationships and rapid response capabilities.
Statewide Task Forces: Serve as the critical intelligence bridge between local cases and national threats. Specialized analysts statewide task forces evaluate all regional cases, identify patterns, conduct blockchain analysis, cross-reference child exploitation databases, and determine whether cases require local action for fund recovery/child protection or federal escalation for broader criminal enterprise investigation.
Federal Agencies: Focus on what they do best—dismantling criminal enterprises. The FBI builds cases against syndicate leaders using intelligence developed by California task forces. Treasury freezes assets and imposes sanctions on key criminals identified through multi-regional analysis. The State Department coordinates international pressure based on comprehensive threat assessments. Immigration and Customs Enforcement targets the human trafficking networks that supply forced labor to these compounds.
The Stakes Have Never Been Higher
This is no longer just about fraud—it's about a systematic transfer of Californian wealth to organized crime networks operating with state protection, combined with the sexual exploitation of American children and the direct funding of Chinese military expansion, all built on a foundation of slavery, torture, and human trafficking documented by Amnesty International as constituting crimes against humanity. We are funding our adversaries while they destroy both American families' financial security, our children's innocence and safety, and our strategic position in the Indo-Pacific—and we are doing so by directly funding an industry that enslaves at least 300,000 people and systematically tortures them to force compliance.
Every dollar sent to these scams funds torture facilities and generational wealth destruction. When Americans lose money to pig butchering or their children are targeted for sextortion, they are directly financing compounds with armed guards, barbed wire, "dark rooms" for torture, and electric shock batons used against trafficking victims who refuse to work. These victims include children as young as minors who have been trafficked, enslaved, and tortured to force them to target American families. The scope of this transfer of generational wealth from hard-working Americans to criminal networks cannot be understated—as a nation, we are witnessing the systematic destruction of American financial security to fund our adversaries' expansion.
The technology gap is closing rapidly. Artificial intelligence will soon allow these criminals to operate child exploitation at unprecedented scale alongside their financial scams, while the proceeds continue to fund Chinese military expansion and regional destabilization. We have a narrow window to act before this crisis becomes completely unmanageable.
We know what works because we've done it before—when we've coordinated efforts, shared intelligence, and moved quickly, we've recovered funds and disrupted operations. The Operation Shamrock Crypto Coalition started with 85 participants in 2022 and exploded to 2,500 active members from local, state, federal, and international agencies across all 50 U.S. states and multiple countries, credited with tens of millions of dollars in victim recoveries. This first-of-its-kind public-private partnership demonstrates the task force model's potential by assembling all participants in the scam lifecycle: social media companies, banks, cryptocurrency exchanges, law enforcement at all levels, NGOs, diplomacy, and victim services.
Operation Shamrock's working groups focus on specific issues that align perfectly with task force capabilities: mapping criminal enterprises, assembling sanctions information, educating financial institutions about red flags, and increasing law enforcement capacity to assist victims. The task force model gives us the infrastructure to do this at scale, protecting both American wealth and American children while countering the funding streams that enable hostile military expansion by leveraging existing relationships and capabilities rather than building new bureaucracies.
What we lack is not capability—it's coordination and proper utilization of our existing intelligence infrastructure.
I look forward to working with you to keep our country safe.
The stakes could not be higher: American wealth, American children, American national security. This is the most powerful criminal network of the modern era—and they have declared war on us.
It is time to fight back with the full force of the U.S. government.
With urgency,
Erin West
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