08 October 2025: UNODC Release Southeast Asia and the Pacific Organised Crime Threat Alert: Timor-Leste Case Study

A recently published threat alert from the United Nations Office on Drugs and Crime (UNODC) entitled “Southeast Asia and the Pacific Organised Crime Threat Alert: Strategic infiltration of vulnerable jurisdictions through criminal foreign direct investments: the case of Timor-Leste" highlights trends in criminal foreign direct investment, where transnational organised crime groups embed illicit operations within legitimate economic frameworks. The alert focuses on Timor-Leste, specifically the Special Administrative Region of Oecusse-Ambeno (RAEOA) and its Oecusse Digital Centre (ODC).

 

Following the publication of the UNODC’s threat alert and evidence of exploitation by transnational criminal networks, Timor-Leste has suspended its online gambling licensing framework. Lawmakers voted to revoke all existing licences and block new applications, citing concerns over national security, social stability and international reputation as the government strengthens its regulatory framework.

 

The Government’s decision to take actions deemed appropriate and proportionate to their significant risk exposure underscores the importance of collaboration between regulators and competent authorities in detecting and disrupting illicit financial flows. Regulators, intelligence agencies and law enforcement work together to detect and disrupt bad actors. Through supervision and monitoring, regulators provide early warning systems, flagging potential criminal infiltration that can undermine legitimate sectors. Such vigilance sends a clear message that such jurisdictions are not safe havens for criminal enterprise. Cooperation not only acts as the foundation of a strong AML/CFT/CPF framework but also provides a more stable and reputable landscape for legitimate business to thrive. 

 

Noting that in May 2025, the Isle of Man published its National Risk Appetite Statement on eGaming and Financial Crime in response to emerging risks presented by the increasingly complex criminal landscape in East and Southeast Asia, which includes the exploitation of casinos and eGaming platforms. To assist stakeholders in understanding the threat picture, the GSC has summarised key insights from this report below to highlight the emerging typologies and risks in order to support industry awareness to ensure the sector remains vigilant to evolving threats.

 

Report Summary

There is a risk that criminal syndicates invest in casinos, junket operations, and online gambling platforms, especially in Special Economic Zones (SEZs), as mentioned in recent UNODC reports. These investments would then serve as fronts for money laundering, underground banking, and cyber-enabled fraud. SEZs in Cambodia, Myanmar, and the Philippines have become hubs for scam centres, illegal casinos, and trafficking operations. 

 

 

Case Study – Overview of Events:

  • On 25 August 2025, Timor-Leste’s LEAs raided Hotel A in the RAEOA region. The search uncovered SIM cards and Starlink devices, which are known indicators of online scam operations. The individuals found on-site had IT qualifications, suggesting a trend toward professionalised scam centres.
  • Hotel A is linked to a network of businesses, including another hospitality venue in Dili and entities operating from the ODC.
  • This network overlaps with Tech Company A, which was appointed to lead Timor-Leste’s National Digital ID project—a cornerstone of the country’s digital governance strategy.
  • The chairman of Tech Company A was recently convicted in Singapore for conspiring to acquire stolen personal data for use in scams and gambling. The report noted that following the conviction the individual was prohibited by the GSC from undertaking any role in the gambling sector.
  • Gaming Company A, reportedly owned by a close associate of the Tech Company A chairman, held a domestic gambling license in Timor-Leste and operated offshore online gambling platforms.
  • This company is also linked to a lottery-branded entity that manages over 50 suspicious gambling domains, suspected of facilitating fraud and illicit gambling across Southeast Asia.
  • The network is tied to the 14K Triad.
  • Connections extend to casino developments in Cambodia, linked to money laundering and scam infrastructure.
  • The same tactics used in Cambodian scam compounds are now being replicated in Timor-Leste, involving human trafficking, forced labour, and cyber-enabled fraud.

 

Key Typologies of Criminal FDI Include:

  1. Criminals’ strategic establishment of shell companies in Special Economic Zones (SEZs) and free trade zones to exploit regulatory gaps and weak oversight;
  2. Exploitation of professional services such as lawyers, accountants, and corporate service providers to construct complex corporate structures, enabling regulatory arbitrage and enforcement evasion. These professionals may be complicit or unwitting;
  3. Criminal networks using legitimate-looking infrastructure projects, but which lack operational substance, such as renewable energy startups or digital ID systems as fronts to gain credibility and regulatory access in vulnerable jurisdictions;
  4. Exploitation of citizenship-by-investment schemes to obtain legitimate or fraudulently obtained passports facilitate jurisdiction shopping and complicating investigations and enforcement; and
  5. Transnational criminal networks investing in casinos, junkets and online gambling platforms as a means to launder money, obscure ownership and financial flows and host scam centres, often masquerading as legitimate enterprises. This was noted in the FIU’s Red Flags and Typologies Report for Online Gambling.

 

Key Takeaways

  • Understanding the risks. Stakeholders should also be aware of key typologies arising from such case studies and regularly review their own risk frameworks in order to mitigate potential vulnerabilities. Where suspicious activity is found, Operators must report their suspicions to the FIU. The GSC takes this opportunity to reiterate the importance of the “National Statement on eGaming and Financial Crime” (NRAS) and FIU typologies report on online gambling, as well as the upcoming sectoral gambling National Risk Assessment (NRA).

 

  • Effective Supervision. Regulators serve as the early-warning system, analysing transactional data, licensing applications, beneficial ownership and investment to flag potential criminal infiltration before it becomes entrenched. Their vigilance provides the foundation upon which law enforcement can act decisively and lawfully. The GSC is committed to further supporting legitimate business by working in partnership to deliver robust action against suspected criminal activity.

 

  • Preventative Measures. The application of preventative measures by the private sector will also protect against potential criminal infiltration of the gambling sector. The effective implementation of risk-based measures such as effective CDD and EDD, record keeping requirements, reporting of suspicious activity and internal controls, are also crucial controls in our regulatory framework. Regulators, law enforcement and private sector have a shared responsibility to uphold the integrity of the system and the reputation of the industry.

 

  • Collaboration. Supervisory agencies, financial intelligence units, and police authorities work hand in hand, ensuring that risk identification translates into timely interventions. By working together to detect and prevent illicit actors from exploiting the economy, supervisory and enforcement agencies help create a safer, more stable environment for responsible investors and operators. Transparent regulation and consistent enforcement deter criminal exploitation while encouraging stable and sustainable economic opportunities.

 

The GSC continues to monitor international developments to enhance its understanding of emerging threats and refine supervisory practices that safeguard the integrity of the Isle of Man’s online gambling sector and associated industries. The report has been shared internally, as the GSC continues to monitor the international landscape and emerging threats, cascading key information to staff to support a more dynamic understanding of risk to inform supervisory practices. These reports are also shared with stakeholders to improve awareness of the evolving global risk landscape in the industry and inform Operator risk assessments and activities.

 

The GSC regularly publishes outreach via its news page, and links to AML/CFT guidance and publications can also be found on the AML/CFT division homepage.

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