A seaside hotel and former bank offices on the Isle of Man, between Ireland and the UK, were the bases from which a network of fraudsters tricked their victims in China out of millions of dollars, a BBC World Service investigation has uncovered.
The dining room and lounge of the Seaview Hotel in Douglas, the island’s capital, were packed with dozens of Chinese workers with computers connected to broadband internet.
The scam, which occurred between January 2022 and January 2023 according to Chinese court documents, used a method known as Pig Butchering or “Pig Slaughter”. It is called this because the process of “fattening the pig” is vital to its success.
The “Pig Slaughter” is a financial scam in which people are emotionally manipulated before their accounts are emptied, in which the Scammers engage with their victims on a daily basis to gain their trust and, over time, deceive them.
The BBC spent almost a year investigating how the scam was carried out from the island, which is dependent on the British Crown but has an independent government.
The BBC team also discovered other details, such as the ambition of the ringleaders of build a state-of-the-art office complex overlooking the Irish Sea. As well as obtaining court documents, the BBC has also accessed leaked documents and spoken to people within the company.
A former staff member, Jordan [no es su nombre real]told us that When he arrived on the island he had no idea of the murky world he was entering.He said he was relieved to have found what he thought was a stable administrative job.
However, he noticed that there was a lot of secrecy at his new company: for example, he and his colleagues were forbidden from taking photos at company social events. What he didn’t realize was that Many of his Chinese colleagues were actually scammers.
By the end of 2021, nearly 100 people had been transferred to the Isle of Man to work for the company referred to in Chinese court documents as “MIC.”
They had come from the Philippines, where they had worked for another company that also committed fraud. The BBC has discovered that MIC stands for Manx Internet Commerce.
In the Isle of Man, MIC was part of a group of associated companies sharing the same ownership.
An online casino, run by King Gaming Ltd, was the most prominent. In mainland China, gambling is illegal. Established on the other side of the world, the The group’s founders were able to attract Chinese customers, but also take advantage of the Isle of Man’s low gambling taxes.
A few months after being based at the Seaview Hotel in Douglas, MIC workers were moved to former bank offices on the east side of the city.
And this is where Jordan says he heard sporadic applause from their new colleagues, who worked in groups of four. He now believes that they were celebrating the fact that they had successfully scammed another victim, some 8,000 kilometres away.
Six people working for MIC in Douglas have been sentenced on their return to China for carrying out investment scams against Chinese citizens
The cases detail the flow of illicit money. The victims were lured by the defendants and their accomplices from bases on the Isle of Man and in the Philippines, according to Chinese court documents.
The “teacher”
The defendants reportedly worked in teams to lure Chinese investors to QQ chat groupsa popular Chinese instant messaging service similar to WhatsApp.
One scammer played the role of a “teacher”, and others posed as other investors. The BBC has seen evidence – including in court documents – that many of those who came to Douglas from the Philippines were involved in the scams.
Everyone used the same computer equipment, they depended on QQ for their work and, with the exception of a few managers, everyone had the same title.
The Chinese court found that the fake investors created an atmosphere of publicity and excitement around the “Professor” money-making skills, who would then tell the victim to invest money on a particular investment platform.
Dazzled by the publicity, the victim complied, only to be turned away by the scammers, who actually They controlled these platforms and could manipulate them, they will take your funds.
US$5.3 million swindled
The Chinese court said it was difficult to verify the victims’ total losses, but said they had been stolen some US$5.3 million from at least 12 people.
Based on evidence that included the defendants’ own confessions, as well as financial and travel records and chat logs, The court found all six defendants guilty.
This was not only a profitable scam but also a sophisticated one, court documents say, requiring the teams to deploy the “dismemberment” techniques with persuasion and skill.
The BBC has discovered the identity of the sole beneficiary of the companies. His name was hidden under three layers of administrative paperwork.
MIC and its affiliated companies were all held by a trust set up by an individual named “Bill Morgan” who, documents show, was also known as Liang Lingfei. The employees called him Boss Liang, Jordan says.
Chinese court documents refer to a man named Liang Lingfei as a co-founder of MIC on the Isle of Man, which was described as “a fairly stable criminal organization created to carry out fraudulent activities”Liang was not one of those prosecuted nor was he represented at the hearings.
The court said Liang was also a co-founder of the scam organisation in the Philippines. The BBC has seen evidence that many MIC employees worked there before being transferred to the Isle of Man.
Thinking about the future
The investigation has also found that Liang obtained an investor visa on the island and attended several events there. His wife also owns a house in the town of Ballasalla, near the island’s airport.
The Isle of Man group of companies was ambitious. Last year it signed a Planning agreement to build a stunning headquarters on a “green campus” on the site of a former naval training base. A spokesman for the developers described it as “the largest single private investment on the Isle of Man”.
The architects’ images show office buildings situated on a hill above Douglas seafront. Inside there would have been penthouse apartments, a spa, several bars and a karaoke lounge.
The campus was to be used by MIC staff and those working for MIC “affiliated” companies, including those involved in online gambling, according to planning documents.
According to conservative estimates, The global annual revenue of the “pig slaughter” industry exceeds US$60 billion.
“This is the first case of this kind we have seen of one of these fraudulent operations in a Western country,” said Masood Karimipour, a UN expert on organised crime who normally focuses on South-east Asia.
Trying to stop scams is like a “game of whack-a-mole” (where when you hit one, another one immediately pops up), he says, and it’s a battle that “Organized crime is currently winning,” as criminals engage in what he calls “jurisdiction hunting” where they perceive there are legal loopholes and little oversight.
Any ambitions the group of companies might have had on the Island of Man – legitimate or not – seems to have come to an end.
In April, police raided the former bank offices. They also forced their way into an address close to the island’s courthouse.
In a statement released shortly afterwards, police said the raids had been linked to a wider fraud and money laundering investigation into King Gaming Ltd IOM. Seven people had been arrested and released on bail, they added.
Since then, three other people are known to have been arrested.
Earlier this month, they were appointed judicial administrators for the group’s companies, including MIC and King Gaming Ltd IOM, at the request of the Attorney General of the Isle of Man.
The island’s gambling regulator has stripped MIC’s affiliated gambling companies of their licenses.
The park campus grounds have been cleared of trees and signs have been put up, but the redevelopment is now on hold indefinitely.
The BBC has made repeated attempts, through various communication methods, to Contact the companies involved, as well as Bill Morgan/Liang Langfei and the directors of the companies, but has not received a response.
He also tried to contact the Seaview Hotel but received no response, although there is no indication that anyone there was aware of any illegal activity taking place on the premises.
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