Are Scam Centers a National Security Threat to the United States?

That is not a hypothetical. It is happening right now, at a scale that demands the United States treat it not as a consumer fraud problem, but as a national security emergency.

The Scale of the Problem

In 2025, the FBI’s Internet Crime Complaint Center (IC3) documented a record-breaking $20.9 billion in reported cybercrime losses by Americans.

But here is the critical caveat: these are only reported losses. Research consistently shows that approximately 80–90% of fraud victims never file a complaint — out of embarrassment, hopelessness, or simply not knowing where to turn. When analysts attempt to account for systemic underreporting, estimated total scam losses to Americans in 2025 climb toward $120 billion or higher.

Globally, the picture is even more staggering. The Global Anti-Scam Alliance estimates total annual losses to cyber-enabled fraud exceed $1 trillion worldwide.

What Are Scam Centers?

Scam centers, also called scam compounds or cyber-fraud factories, are physical industrial facilities: fortified compounds staffed by hundreds or thousands of workers.

These operations run what intelligence analysts call a **“dual-victim” model**. On one side are the fraud targets, ordinary Americans, Europeans, and citizens of developed Asian economies, who are systematically deceived out of their life savings. On the other side are the compound workers themselves, many of whom were trafficked into forced labor through fake job advertisements, lured by promises of legitimate employment abroad.

The UN Office of Human Rights estimates that **more than 300,000 people are held in forced labor inside scam compounds globally, [drawn from at least 66 countries of origin](https://www.ohchr.org/en/stories/2026/02/matter-survival-human-cost-cyber-scam-operations-south-east-asia)**. Workers inside face shift schedules of up to 19 hours per day, electric shock punishment, confinement in what survivors describe as “dark rooms” and “water prisons,” and systematic debt bondage.

These compounds operate highly structured scam portfolios spanning major fraud typologies including pig butchering crypto fraud, task scams, “asset recovery” scams, business email compromise, sextortion and more — increasingly powered by AI-generated personas, deepfake calls, and industrialized social-engineering playbooks.

Why This Is a National Security Threat

• Social Safety Net Burden: Large-scale scam losses increasingly push elderly Americans into financial collapse, shifting private fraud losses into long-term public welfare and healthcare costs.
• Funding Hostile State Actors: Laundering networks tied to global cyber-fraud syndicates have processed stolen funds directly into the military buildup, ballistic missiles, and weapons programs of hostile state adversaries.
• Expanding China’s Security Footprint: Beijing has leveraged anti-scam policing and regional instability to expand its law enforcement and security presence across Southeast Asia, Africa, and the Pacific.
• Counterintelligence Risks: Raids on scam compounds routinely uncover massive volumes of American personal and financial data that may become accessible to Chinese state authorities.
• AI-Powered Cognitive Warfare: Scam syndicates now deploy AI-generated personas, deepfake video, voice cloning, and automated social engineering systems that can also be repurposed for espionage and influence operations.

The Trust & Safety Blindspot: The Context Gap

The fundamental limitation in modern Trust & Safety is not a lack of data, but a lack of contextual correlation. Platforms possess highly sophisticated tools to identify localized anomalies: a suspicious advertisement, an erratic cryptocurrency promoter, or a cluster of coordinated bot accounts. However, these indicators are almost always evaluated in isolation.

Under current paradigms, platforms can flag what is happening on their network, but they rarely know who is behind it. They operate without the systemic visibility required to confidently tie a single malicious account to an industrialized, multi-layered scam network operating out of a physical compound. Because defense remains siloed, enforcement is inherently reactive — treating systemic, state-protected criminal enterprises as disconnected, low-level terms-of-service violations.

Mapping and Disrupting Syndicated Fraud Networks

The operational response is clear: platforms and law enforcement must move beyond isolated account enforcement and adopt network-level disruption.

The fundamental challenge is that platforms typically evaluate abuse through the narrow lens of activity occurring within their own ecosystems, while modern scam operations span numerous digital touchpoints across social media platforms, messaging applications, email providers, domains, cryptocurrency wallets, payment services, recruitment channels, and dark web infrastructure. A single scam may involve dozens of interconnected online entities, each generating fragmented signals that appear benign or low-risk when viewed in isolation. No individual platform possesses sufficient visibility to understand the full scope of the threat.

Effective enforcement therefore requires collaboration across platforms and with trusted intelligence partners capable of correlating signals across the clear web, deep web, and dark web to reconstruct the broader operational network behind the fraud.

Once scam infrastructure is mapped through victim intelligence, threat intelligence, asset investigations, and technical correlation, platforms can identify and remove not only individual fraudulent accounts but the broader clusters, recruitment channels, payment rails, domains, and communication assets connected to the same criminal enterprise. Law enforcement agencies can leverage the same intelligence to prioritize high-value targets, coordinate cross-border investigations, seize infrastructure, sanction facilitators, and disrupt the financial networks that enable these operations to scale.

Rather than treating scams as millions of unrelated incidents, enforcement must focus on attributing activity to the underlying syndicates that orchestrate it. By combining continuous intelligence collection, graph-based network analysis, and real-time information sharing between platforms, financial institutions, intelligence providers, and government agencies, defenders can shift from reactive moderation to proactive disruption — raising operational costs, reducing victimization, and systematically dismantling the digital infrastructure that powers industrialized fraud.

At the geopolitical level, the United States should treat large-scale scam compounds as a transnational security threat rather than solely a criminal justice issue. This requires integrating anti-scam operations into broader foreign policy, intelligence, sanctions, and regional security strategies. The U.S. should work with allies and partner governments to map the ownership structures, financial facilitators, and protection networks that enable scam compounds to operate, while imposing targeted sanctions on individuals, companies, and organizations that knowingly profit from or support these enterprises. Diplomatic pressure, intelligence sharing, capacity building for regional law enforcement, and coordinated actions against money laundering networks should become core components of U.S. engagement in affected regions. At the same time, scam compounds should be incorporated into broader assessments of strategic competition, particularly where criminal networks intersect with hostile state interests, illicit finance, forced labor, and influence operations. The objective is not simply to arrest individual scammers, but to deny criminal syndicates and their enablers the permissive environments, financial infrastructure, and geopolitical space that allow this industry to thrive.

Conclusion: Naming the Threat for What It Is

The United States has spent years treating large-scale online fraud as a consumer protection issue, but the evidence increasingly points to something far more consequential. Scam compounds have evolved into industrialized transnational enterprises that extract tens of billions of dollars from American households, exploit hundreds of thousands of trafficking victims, generate vast repositories of sensitive personal data, and intersect with broader geopolitical and security challenges. The response must therefore extend beyond victim awareness campaigns and isolated account takedowns.

By combining network-level enforcement, cross-platform intelligence sharing, international cooperation, financial disruption, and sustained diplomatic pressure, the United States can begin to impose meaningful costs on the organizations behind this industry. The first step, however, is recognizing the threat for what it is: not merely fraud at scale, but a persistent national security challenge that demands a coordinated national response.

To learn more about how Alice leverages intelligence to combat these complex ecosystems, visit Alice.io or speak to one of our experts.