KNU, Scam Centres and an Uneasy Alliance

The Fully Light Hotel and Casino, a prominent landmark in Myanmar’s Kokang region, once a centre for large-scale cyber-scam operations before Chinese pressure led to its collapse. Credit: Fully Light Casino

Don Pathan
www.stratsea.com

The collapse of the four crime families and other Kokang warlords in late 2023 reverberated throughout Myanmar, delivering an unmistakable warning to armed groups and criminal networks: that no one remains beyond reach – regardless of connections or perceived power – if they target Chinese citizens with scams.

For years, these criminal syndicates operated scam centres and conducted illicit activities along the Sino-Myanmar border. Their control of the Kokang Border Guard Force (BGF) positioned them as allies of Myanmar’s powerful military junta.

Their fortunes reversed when China determined that the situation had become intolerable. Beijing gave the Three Brotherhood Alliance (3BHA) – a coalition comprising the Arakan Army, the Myanmar National Democratic Alliance Army (MNDAA) and the Ta’ang National Liberation Army (TNLA) – an authorisation to dismantle these operations after Myanmar’s generals refused to act against their Kokang allies. The four families fled, seeking protection from the junta as their empire crumbled. With nothing to offer in exchange for sanctuary, Myanmar’s generals arrested them and extradited them to China. Many received death sentences, while others faced life imprisonment for their crimes.

Members of the syndicate that controlled the Kokang region face trial at the Wenzhou Intermediate People’s Court in Zhejiang, China, in September 2025. (Credit: The People’s Courts News Agency, China)

The End of Tolerance

The downfall of the Kokang family and BGF resonated throughout Myanmar, including with the 7,000-strong Karen BGF led by Col Chit Thu, a powerful warlord controlling substantial territory along the Thai border.

Approximately a decade ago, Chinese criminal syndicates began relocating to Karen BGF territory, constructing compounds housing entertainment complexes, brothels, casinos and cyber scam centres generating billions of dollars annually. Chit Thu maintained publicly that he merely collected rent and bore no responsibility for his tenants’ activities.

However, witnessing the merciless dismantling of the Kokang and their BGF allies instilled apprehension in Chit Thu. Hoping to distance himself from the stigma of association with the Tatmadaw, Chit Thu announced in January 2024 that his organisation had withdrawn from the Tatmadaw’s chain of command. The rebranded Karen National Army (KNA) still gets referred to by media and locals as BGF, however. Despite his efforts, Chit Thu could not escape the tarnished reputation.

By 2025, international tolerance had reached its limit. The US Department of the Treasury sanctioned KNA as a transnational criminal organisation in May. In November, a smaller group operating under a ceasefire arrangement with the junta – the Democratic Karen Benevolent Army (DKBA) and its top four leaders – joined the sanctions list. The United States simultaneously launched a new Scam Center Strike Force targeting these cybercriminals. DKBA is a signatory to the government’s National Ceasefire Agreement (NCA), a nationwide accord hastily assembled by the Thein Sein government in October 2015.

Earlier this year, Chinese Assistant Minister of Public Security Liu Zhongyi made two successive visits to the Thailand-Myanmar border, pressuring both countries to take action. Thailand complied by cutting utilities and internet access, only to see them replaced by generators, Starlink terminals and smuggled fuel. Ironically, these measures impacted local communities more severely than the criminal operations.

KNA and its criminal associates released approximately 7,000 people from the scam centres, allowing them to flee to Thailand for processing and return to their home countries. Chinese nationals comprised the largest group.

The distinction between criminals and victims – people lured by promises of well-paying jobs – remained unclear. Regardless, freeing thousands of foreign nationals did little to disrupt the overall illicit operations.

Evacuations and Optics

Eight months later, in late October 2025, an assault on KK Park, one of the Chinese-run notorious compounds in the Myawaddy area, forced approximately 1,700 mostly foreign nationals to flee across the border to Thailand. They came from 21 different countries—most were Chinese nationals.

Taking down scam centres in KK Park, Nov. 12, 2025. Credit: MITV – Myanmar International Television

Four weeks later, in late November 2025, Myanmar soldiers, this time joined reluctantly by KNA troops, attacked the Shwe Kokko compound, forcing thousands to flee as troops demolished over 100 buildings in a desperate demonstration to the international community that Myanmar’s military government takes law and order seriously.

Not everyone is departing Myawaddy, however. Many scammers have chosen to remain, dispersing throughout Myawaddy Township to continue illicit operations from privately rented homes, dormitories and hotels, according to Mizzima News.

Both KK Park and Shwe Kokko sit within Myawaddy Township, the Myanmar border town adjacent to Thailand’s Mae Sot district. The two compounds occupy territory controlled by KNA.

The crackdowns have proven inconsistent. A Thai security officer said weeks before the October assault on KK Park, KNA had been relocating Chinese site managers and “bosses” from these scam compounds to a new location north of Mae Sot.

“They (KNA) were charging substantial sums of money and splitting it with Myanmar authorities,” said a Thai security officer monitoring the border situation. The attack against Shwe Kokko a month later followed the same pattern, with site managers and those who could afford it being evacuated before what was supposedly a surprise attack, the officer said.

Mizzima News, citing local sources, reported that Chinese nationals believed to be crime syndicate members were evacuated on the evening of 17 November 2025 by KNA troops, the night before the raid on the Shwe Kokko compound.

“They won’t let us go outside. All the doors are locked. There are no more Chinese inside, only us Myanmar people and some other foreigners. The building lights are off, and we’re not allowed to use phones. I think they freed the Chinese and are keeping us as hostages,” a 22-year-old Myanmar woman inside one of the buildings told Mizzima News.

Observers suggest Myanmar wants to demonstrate to the world that it takes crime seriously and that it regards the upcoming general election as significant. However, compelling Chit Thu’s KNA to destroy the source of his wealth, from which the government gets a cut, has not achieved the desired public relations outcome.

Speaking in Bangkok, Prof Yanghee Lee, former UN Special Rapporteur for human rights in Myanmar, called on ASEAN and the international community to adopt a more active role and principled engagement to bring about change in Myanmar.

“Unfortunately, Myanmar possesses abundant natural resources that other countries want. Once the election concludes, many countries will reach out and enter the country, which will be devastating news for the people of Myanmar. It will be on our watch that the people of Myanmar will be crushed even more,” Prof Lee said.

Shifting Alliances

Indeed, the fragile dynamics between DKBA, an NCA signatory, and Karen National Union (KNU), a major rebel outfit fighting the junta, erupted on 21 November when they clashed in a brief gunfight near Min Let Pan village, approximately 16km south of Myawaddy.

According to a DKBA liaison officer in Mae Sot, stray gunfire struck their position, triggering limited retaliation—standard operating procedure in conflict zones. An escalation into a gunfight between the two groups quickly ensued. Outnumbered, the 230 DKBA militiamen surrendered their weapons to KNU.

KNU, however, characterised the incident in a 25 November statement as a “coordinated attack”. A subsequent ground assessment uncovered an active scam compound in the area housing more than 2,000 foreign workers, predominantly Chinese.

According to a Thai intelligence officer on the border, DKBA had closed the Hpalu-Wawlay Road – strategically crucial as it has been the site of intense fighting between the Tatmadaw and resistance forces – as leverage to secure the return of the 230 captured fighters. Within a week, KNU returned all captured DKBA members and their weapons.

As the Tatmadaw intensified operations to retake the area around Min Let Pan, KNU warned on 2 December that it could no longer guarantee the safety of the 900 remaining foreign nationals refusing to evacuate a compound.

In their statement, KNU spokesman Padoh Saw Taw Nee called on China to pressure the Tatmadaw to halt heavy weapons fire and aerial bombardment, warning that lives hung in the balance.

In a statement dated 6 December, KNU accused the Tatmadaw of deliberately targeting unarmed civilians with mortar fire into the Shunda Park compound, noting that some rounds strayed across the border, forcing villagers on the Thai side to flee.

KNU suggested that some people trapped in the compound might be high-value criminals and urged the international community to intervene quickly.

KNU said 2,460 out of 2,665 persons had been transferred from Shunda Park to Thai authorities. Many had fled the compound independently, refusing to surrender to Thai authorities, possibly from fear of persecution back home. The borderlands remain a volatile mosaic of shifting alliances, criminal enterprises and desperate civilians—a testament to a decades-old conflict now deeply entangled with the global scourge of cyber-scamming.

Tags: China Myanmar

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Author

• 
  Don Pathan

  Don Pathan is a security analyst focusing on conflict in Myanmar/Burma and insurgency in Thailand's far south.

KNU, DKBA and the Scam Center Economy on Myanmar’s Border

KNU-controlled Shunda Park Scam, an online money laundering operation in Minletpan area south of Myawaddy, is seen distributing food to foreign money laundering workers and arranging for their repatriation.

Don Pathan
Mizzima News

Three decades ago, a Karen National Union (KNU) splinter group decided to go their own way, citing discrimination on religious grounds.

The core leaders of the KNU were mainly Christians, while the Buddhist faction felt neglected and overlooked.

The splinter group called themselves the Democratic Karen Buddhist Army (DKBA). The name highlighted the theological differences, but the breakup had more to do with the absence of a political power-sharing system where positions are proportionally allocated along religious lines.

As expected, the split was exploited by the Myanmar military government, known at the time as the State Law and Order Restoration Council, or SLORC. A ceasefire agreement with the government came with military assistance that translated into military victory. KNU headquarters at Manerplaw was overrun in early 1995, fundamentally altering the dynamics of the ongoing civil war. For the next 15 years, the two sides were constantly at each other’s throats.

A major turning point occurred in 2009 when the Myanmar government ordered all ethnic armed groups, including the DKBA, to transform into Border Guard Forces (BGF) under the command of the country’s military, the Tatmadaw. Most DKBA fighters followed their commanders, Col. Saw Chit Thu and Brigadier General Saw Mo Shay, who formalized their units into Karen BGF battalions.

A faction of the DKBA – known as DKBA Brigade 5 or Kalo Htoo Baw – refused to go along and opted for an uneasy alliance with the KNU, their former adversaries. The following year, in 2011, the KNU and DKBA’s Brigade 5 forged closer cooperation, enough to form a united position in peace negotiations with the government, but not enough to unite into one single command.

To downplay the religious differences that led to their breakup nearly two decades earlier, the DKBA replaced the “Buddhist” label with “Benevolent” in 2012, becoming the Democratic Karen Benevolent Army.

The same year also saw the KNU and DKBA taking a leap of faith by signing the Nationwide Ceasefire Agreement (NCA) with the government. This half-baked arrangement was filled with flaws. The NCA insisted that ethnic armed organizations (EAOs) sign a comprehensive ceasefire agreement before substantive political issues were discussed.

In 2021, the Tatmadaw ousted the government of Aung San Suu Kyi from power through a coup, forcing her National League for Democracy (NLD) members to flee to the jungle and abroad.

The KNU saw no point in clinging to the NCA, while the DKBA held on to the alliance despite uncertainties and nervousness. It would be an uneasy alliance because, unlike Chit Thu’s BGF or the KNU, the DKBA didn’t have the kind of military muscle to command respect from the Tatmadaw.

In August 2022, KNU and DKBA leaders held historic meetings to discuss reunification. There were high hopes on the ground as soldiers began wearing badges of the new Kawthoolei Armed Forces as a first step toward full integration in the Land of Flowers – the historical name of the Karen lands. But factions within the DKBA were still holding out, clinging to the NCA.

It was never clear what the military regime, known as the State Administrative Council (SAC) – the name the junta gave itself after the 2021 coup – had promised them.

The relationship between the KNU and DKBA following Myanmar’s 2021 military coup has been marked by uneasy cooperation and, at times, confrontation. This relatively small outfit finds itself stuck between two giants – the Tatmadaw and the KNU. There were times when the Tatmadaw would try to pit the DKBA against the KNU. There were also times when DKBA fighters would don KNU uniforms to go into battle against the Tatmadaw.

“At the policy level, DKBA is officially aligned with the Myanmar military government. But at the operational level, where people know each other, there were times when DKBA troops would lend a helping hand to the KNU on the battlefield,” said one DKBA officer who spoke on condition of anonymity.

“Do Myanmar troops know about this? Yes, but there isn’t much they can do about it,” the officer said.

When asked why the DKBA didn’t just merge with the KNU, the officer said: “The desire to remain a standalone organization is still there. Money from the Chinese is also an important reason.”

“We want to get in on some of the action,” said the officer, referring to the Chinese investors and crime syndicates behind the scores of entertainment complexes, brothels, casinos, and scam centers that dot the Thailand-Myanmar border.

Like the much larger Karen BGF, who earlier this year renamed themselves the Karen National Army (KNA), thinking they could lead the world to believe they had left the clutches of the Tatmadaw, the DKBA tells people they are not aware of the illicit activities of the Chinese investors, whose site managers come with security details.

But the group tries to be as helpful as it can. According to an aid worker from the border: “DKBA doesn’t have the troop strength to generate a meaningful impression, so they try to be as friendly as possible.”

“When requests from foreign embassies in Bangkok ask them to help track down certain individuals from their country caught up somewhere in one of these Myawaddy complexes, DKBA tries to be as helpful as they can,” said the aid worker on condition of anonymity.

But being a nice guy in a permissive environment where extensive criminal enterprises thrive is never enough to save your own skin, especially when the tenants are criminals who have been scamming citizens of the world’s superpowers, like the U.S. and China.

And so in May 2025, the U.S. Department of the Treasury sanctioned the KNA as a transnational criminal organization, along with the group’s leader, Chit Thu, and his two sons, Htoo Eh Moo and Chit Chit, “for their role in facilitating cyber scams that harm U.S. citizens, human trafficking, and cross-border smuggling.”

The DKBA, along with the top four leaders of the organization, joined this notorious list in November 2025. On the day DKBA made the list, the U.S. also announced the establishment of the Scam Center Strike Force.

No one was really surprised by the moves from the U.S. and China, however. The writing had been on the wall for some time. The Strike Force was America’s way of displaying its seriousness. China, at the beginning of 2025, wanted to let Thailand and Myanmar know that enough is enough.

Chinese Assistant Minister of Public Security Liu Zhongyi made two back-to-back visits to Mae Sot and Myawaddy to pressure both Thailand and Myanmar to take action. Power supply, internet access, and fuel leading to these scam centers were cut off. But they were quickly replaced by powerful generators, Starlink terminals, and fuel smuggled from the Myanmar side. These measures ended up hurting local villagers more than the intended targets.

Before Liu’s trips to the border, two flights a day – planeloads of Chinese tourists – would come to Mae Sot, cross illegally to the Myanmar side to visit these entertainment complexes, casinos, brothels, and so on. They would return to Mae Sot before their Thai visas ran out or their coffers ran dry, which never seemed to be the case, said one Thai security officer who spoke on condition of anonymity.

By February, when the Thai pressure began to go into action, the flights dropped to one a day, and the seats were mostly empty. So-called tourists were screened upon arrival. Unless they had real business in Mae Sot, they were put on the return flight to Bangkok.

But the writing had been on the wall for some time. Two years before Liu’s arrival, Chinese crime syndicates were looking for safer places. A number of these illicit operations began relocating from Myawaddy to Phayathonezu, an area near the Three Pagodas Pass that sits on the border of Thailand’s Kanchanaburi province.

According to the United Nations Office on Drugs and Crime (UNODC), online scamming generates more than $40 billion a year in the Mekong subregion through crime syndicates working from various pockets in Myanmar, Cambodia, and Laos.

KNU-controlled Shunda Park Scam, an online money laundering operation in the Minletpan area south of Myawaddy, is seen distributing food to foreign money laundering workers and arranging for their repatriation.

Ongoing Assault on Scam Centers on the Thailand-Myanmar Border

On the surface, it looks like international pressure from China and the U.S. is paying off. Combined forces of Tatmadaw and KNA troops attacked two notorious scam compounds – KK Park and Shwe Kokko – in October and November 2025, respectively.

Myanmar state-run media released photos and footage of buildings being raided and torn down as thousands of panicked foreign nationals fled on foot in all directions. Many appeared to be Chinese nationals, and not all are scam operators, said an aid worker on the border.

Taking down scam centers in KK Park, Nov 12, 2025. (Myanmar Intl. TV)

But this doesn’t seem to be enough to improve Myanmar’s international image, much less that of the KNA/Karen BGF, the so-called landlords who claim to know nothing about illicit activities in the areas under their control. General elections are less than a month away, and Myanmar wants to put on its best face for the world to see that it means business. But nobody is giving them credit for any of it.

Despite the crackdowns, experts noted the inconsistencies. The Tatmadaw and allied militias have historically profited from these illicit operations. One Thai security officer on the border said that in the days leading to the attack on KK Park in early November, the KNA was taking site managers and Chinese bosses to a new location opposite Tak’s Mae Ramat district, about 55 kilometers north of Mae Sot. He said the initial migration involved about 200 people.

Meanwhile, clashes between the Tatmadaw and the KNU continue unabated. The November 21 clashes between the two sides, 16 kilometers south of Myawaddy around the Min Let Pan village, “inadvertently” brought the DKBA into the gunfight. It started with a stray bullet hitting DKBA positions, according to a DKBA liaison officer in Mae Sot.

“DKBA retaliated with warning shots, and the situation quickly evolved into a gunfight between them and the KNU. Outnumbered and outgunned, 230 DKBA militia surrendered and handed their weapons to the KNU,” said the liaison officer.

But in the KNU press statement dated November 25, the KNU described DKBA action as a “coordinated attack.” A ground assessment was conducted the following day, on November 22, during which the KNU came across scam operations and about 2,000 foreign nationals, mostly Chinese, working at this particular compound. Thai and international agencies have been notified, and help was sought from them on how investigations into these illicit activities should be conducted.

In its December 2 statement, the KNU said it can no longer guarantee the safety of more than 900 foreign nationals who are refusing to leave the scam compound, known as Shunda Park, as junta forces intensify their offensive to retake the area.

Padoh Saw Taw Nee, spokesman for the KNU, called on China to apply pressure on the Tatmadaw to stop using heavy weapons and aerial bombardment against the compound in Min Let Pan, saying the lives of 2,000 people – most of them Chinese nationals – in the area are at risk.

Many are stranded on the Moei River, wanting to cross into Thailand for safety. But the Thai Army insisted that they must go through Thailand-Myanmar Friendship Bridge 2, which links Myawaddy to Mae Sot.

“I don’t understand why Thai officials are being nitpicky about where they can cross. People are fleeing fighting. We stand to look really bad if Myanmar airstrikes kill these foreign nationals in and around Min Let Pan,” said a Thai security official on the border.

But eventually, by December 5, nearly all of the 2,400 were handed over to the Thai authorities. They may be out of the Tatmadaw’s harm's way, but they can expect a thorough interrogation once they reach their home country.

Don Pathan is a security analyst focusing on conflict in Myanmar/Burma and insurgency in Thailand’s far south.