Chinese police have reportedly arrested Liu Zhengxiang, a powerful online gambling mogul based in a Myanmar border zone in Shan state while attending a trade fair in China.
Police arrested Liu and 11 businessmen, including officials from the Kokang Self-Administered Zone, on the second day of the trade event in nearby Lincang City in China’s Yunnan Province, Radio Free Asia (RFA) Burma reported on Wednesday (October 4).
The report cited border trader informants as saying the arrests took place on Sunday, the second day of the trade fair, and that those detained were the most “wealthy businessmen” among some 30 people in the delegation.
The Chinese and Myanmar governments have not confirmed the arrests, but a spokesperson for the Shan State government, Khun Thein Maung, did not deny the arrests had occurred when contacted by RFA Burma.
Liu, also known as Lee Kyein Chan, is one of the more formidable examples of Myanmar-based entrepreneurs who have built business and territorial empires out of legitimate and illegal businesses with the imprimatur of ethnic militias.
A 2022 analysis by the United States Institute of Peace said Liu leveraged alleged criminal connections and the resources of his mining, hospitality, property and agricultural conglomerate Fully Light Group to support Myanmar’s military government and to set up a border guard force for Kokang.
The report said Liu is not only a “key player” in the underground online gambling scene but also controls casinos and hotels in Kokang and Myanmar’s Karen State, as well as the Gobo East Casino complex in Sihanoukville, Cambodia.
The report added that Fully Light Group operations had avoided Chinese government pressure despite alleged links to triad groups in China, illegal use of the China UnionPay payments network for online gambling, and despite alleged human trafficking and enslavement of migrant workers from no later than February 2022.
Liu's reported arrest provides more evidence that Beijing and its proxies, such as officials in Laos, are now cracking down on erstwhile criminal allies and moguls in lawless and highly corruptible regions of Southeast Asia as their geopolitical value dwindles.
The arrest follows a crackdown in Laukkaing, the capital of Kokang, in September in which 377 Chinese nationals were arrested for illegally working in the region and for “online money laundering” offences, RFA Burma said.
It also follows the arrest of nearly 1,300 Chinese nationals by the United Wa State Army in its territories in September and their repatriation.
Beijing, through regional police forces, in 2021 ordered Chinese nationals to abandon online gambling and scamming syndicates in Myanmar and return home to take advantage of an amnesty.
That call resulted in the hollowing out of some border casino operations, but in the two years since then, much of the online gambling sector has withstood this pressure and accelerated the use of slave labour, mostly out of China, Southeast Asia and the Middle East.