These seaside apartments were a ghost city – then police say scammers moved in

From a distance, Malaysia’s Forest City looks 3D-printed: a bristle of identical white blocks clustered on an otherwise unremarkable coastline.

When it was unveiled by Chinese developers in 2016, the $100bn mega-project was pitched as “a dream paradise for all mankind”: a special financial zone that could house some 700,000 residents. But a decade later, this 14-sq-km (3,400-acre) artificial island on Singapore’s doorstep is thought to be inhabited by less than 1% of that.

Rows of eerily vacant skyscrapers loom over quiet streets. Inside empty apartments, benchtops and windows are filmed with dust.

“In 2016 they described it here like the golden city; very, very beautiful,” says Jason Deng, a 56-year-old investor who was among the first to buy in Forest City, paying “a lot of money” for five properties.

“If I had known it was not so good I would not have bought so many apartments,” he says now. “I thought it would be much, much better.”

As it turns out, this is only a golden city for some people – and they’re not the ones developers had hoped to attract.

In mid-July, Malaysian police raided two alleged scam operations spread across 32 premises in Forest City, arresting 335 people ‌and seizing assets worth about one million ringgit (£181,810; $245,000), including 313 computers, 1,557 mobile phones, 17 laptops and 10 modems.

From these two call centre hubs – one occupying 27 apartments across five storeys of a residential tower, the other spread between five bungalows – cryptocurrency syndicates ran investment and love scams targeting victims abroad, according to police.

Those arrested include 309 Chinese nationals, 19 Indonesians, three Malaysians and four Myanmar nationals. Johor police chief Ab Rahaman Arsad said authorities were working with Interpol to track down the mastermind behind the operations.

The BBC reached out to Forest City and Johor police for comment, but did not receive a response.

Experts and locals tell the BBC this is likely to be the tip of the iceberg – and a symptom of a global scam industry that is spreading, evolving, and professionalising.

“The reality is that many of these organisations now resemble multinational corporations more than a traditional organised crime network or gang,” says John Wojcik, an analyst at TRM Labs, which investigates crypto-facilitated crime. “They have dedicated recruitment teams, IT departments, money-laundering specialists and infrastructure.”

Authorities and experts agree that the Forest City operations were probably staffed by criminals who had been driven out of Cambodia, a global nerve centre for transnational scams.

Over the past five years, this criminal sector has ballooned into a multi-billion-dollar industry, built on the forced labour of brutalised trafficking victims who work under threat of torture and abuse.

Since late last year, the Cambodian government has stepped up efforts to stamp out these operations. Authorities recently estimated that 300,000 people had left the country within a few months as raids on industrial-scale compounds intensified.

But these Malaysian offshoots do not appear to have been scam “compounds” in the traditional sense.

Compared to more infamous walled complexes in places like Sihanoukville or the Myanmar borderlands, the alleged scam hubs in Forest City appear almost white collar, reportedly staffed by local residents and sitting wall-to-wall with the homes of unsuspecting neighbours.

Kevin, a tenant who also works in property sales for Forest City, believes scammers are still operating in “condominiums or serviced apartments” in the complex. He asked for his name to be changed for fear of repercussions.

“We know what they’re doing,” he says. “This is actually a very common issue in Johor city and Kuala Lumpur, but especially in Forest City. Forest City is very special.”

Part of what makes Forest City “special”, according to Kevin, Wojcik and others, is the very thing that has gained it so much notoriety: its reputation as a semi-abandoned “ghost city”.

“When we speak to clients or customers, the company teaches us to say ‘we already have 23,000 residents living in this area’,” says Kevin – but the reality, he quietly adds, is there are “less than 5,000”.

“That’s the reason” scammers have chosen Forest City to set up shop, he suggests.

“They have their own privacy… Nobody comes here.”

There are several factors which precipitated what many see as the downfall of Forest City.

Spearheaded by Country Garden, one of China’s largest property developers, and Danga 88, a private company controlled by Malaysian Sultan Ibrahim Iskandar, the project was initially dreamed up as an eco-friendly metropolis for well-heeled Chinese clients. Featuring a high-end hotel, golf course and water park, the resort-style city’s seafront offices and apartments were expected to be in high demand.

But the combined weight of the Covid pandemic, China’s spiralling property slump and constricted borrowing limits for its citizens have sunk those sky-high ambitions, and all but ground the project to a standstill.

The lights are still on, but almost no-one is home.

And that appears to have made the complex a honeypot for scammers.

“Forest City reflects the conditions organised crime have been targeting for years – a flagship location marketed as a prestigious, luxury, master-planned smart city that never came close to fulfilling that vision,” Wojcik says.

“Developments like this offer precisely what these syndicates look for: modern infrastructure, large numbers of vacant properties, and international connectivity all wrapped around the veneer of legitimate economic activity to ensure that the criminal nature of what goes on inside remains unnoticed.”

With this in mind, the glittering facade of Forest City echoes a more infamous metropolis 1,800 kilometres (1,120 miles) to the north: Shwe Kokko, the so-called resort city on Myanmar’s Thai border, which is one of the world’s most notorious scam hubs.

Built by the private Chinese conglomerate Yatai, Shwe Kokko markets itself as a safe holiday destination for Chinese tourists and a haven for the super-rich. But behind its tree-lined streets and luxury villas is a nexus of fraud, money-laundering and human trafficking.

For all its headwinds, and despite the fact that only 15 to 20% of the originally proposed project has been completed, Forest City similarly still markets itself as an up-and-coming hotbed for property investment, tech innovation and tax-free business ventures.

Such entrepreneurial packaging serves as a Trojan horse for scammers wanting to set up shop without drawing unwanted attention – and allows them to perpetrate their fraud more effectively.

Wojcik explains that “when scam syndicates can embed themselves behind seemingly legitimate businesses in ordinary commercial developments, they not only become more difficult to detect and disrupt, they become capable of exerting serious amounts of power and influence through the massive profits they generate”.

Such power and influence in turn allows scammers to professionalise in other ways.

Though human trafficking still largely fuels much of the scam industry’s labour force, there is now a noticeable trend of syndicate operators recruiting and retaining experienced scammers with higher pay and better working conditions.

Meanwhile, in the same Telegram groups where scam jobs are being advertised, career scammers are also now posting detailed resumes, outlining their experience in fraudulent activities and emphasising their eagerness to work.

“It’s a sign the industry is maturing into a more professionalised criminal enterprise,” Wojcik explains, “while coercion and exploitation still remain widespread”.

The Forest City raids highlight a transnational scam industry that is shifting in size and shape. But this is far from the first time such operations have been detected in Malaysia.

Throughout 2022, before the industry gained widespread global attention, Malaysian authorities raided several scam centres operating out of bungalows and condominiums in the southern state of Johor, the northern state of Penang and the capital city of Kuala Lumpur.

Yet while these and other major crackdowns sent a message of zero tolerance to fraud syndicates, Wojcik notes that Malaysia has remained home to influential criminal networks – and that “any signs of large-scale re-emergence deserve close attention”.

In Forest City, such signs may already be emerging.

Kevin says it’s long been an “open secret” that scams are happening here, and that “the only shocking thing is that the police were effective”.

He’s certain there are more, too – but is unperturbed at the idea that his neighbours might be defrauding people out of hundreds of thousands of dollars.

“For me, I don’t care,” he says. “It’s not my business… I work here just for the salary.”

Other residents feel the same way.

Phillip, whose name we have also changed, moved to Forest City from Singapore last year, attracted by the relatively cheap property market and the idea that he could get more value for his money. He works in tech, and says he is “very focused” on the topic of cyber protection.

“Yes they [the scammers] might be on my doorstep, they might be my neighbours… [they] could be one of the ones that’s running one of these syndicates. At the end of the day, it doesn’t matter where you go – this is going to happen.”

He says he was “not surprised” to hear about the reports of scam centres in his complex. What has surprised him is the fact that “more and more people are moving” to Forest City.

One of the reasons he chose the development where he lives is because of the peace and quiet, he says – but he’s pleased to see that it is evolving from a “ghost town” into a place where people seem to want to be.

“So many people have lost money on these developments,” he points out. “But the last three months, you see the lights on in the condos. You’ve gone from one in 20 to maybe one in five.”