▶ 0:16:44Chair Risch: The united states senate foreign relations committee will come to order. Thank you to our witnesses for being here today and thank you for everyone else who is attending. We are glad to have everyone attend these meetings as room will allow, but we do pay rule in this committee that there will be no interruptions. There will be no attempt to contact a member of this committee or one of the witnesses during this hearing. The consequences are serious if you do.
▶ 0:17:12Chair Risch: With that, the way this is going to work -- I am going to give an opening statement. Senator shaheen well. We would like to hear from our witnesses. Then, we will open it up to a round of questions for members who are here or who show up. I will start by saying thank you to our witnesses for testifying today on what is a really, really important issue. Right now, across the ocean, there are entire cities devoted to scamming americans.
▶ 0:17:41Chair Risch: In cambodia, and laos, and in verma, scam center operations have become a multibillion-dollar criminal enterprise. It enables a range of illegal activity like human trafficking, money laundering, the illicit drug trade, and even arms trafficking around the globe, presenting a growing threat to american wallets and to our national security. We have all received one of these strange phone calls or texts.
▶ 0:18:10Chair Risch: In fact, as common as it is, I would not be surprised if somebody in this room receives one of those during this hearing. Just last year, idahoans reported losing $34 million to online investment scams, and that is just idaho. Naturally, americans are losing billions each year to these scammers, to the benefit of our adversaries. Many of these scam centers have close ties to chinese transnational criminal organizations.
▶ 0:18:40Chair Risch: They take orders from the chinese communist party and work to promote the ccp's foreign policy priorities. These criminals have created an industry that traps hundreds of thousands of victims of human trafficking in scam compounds. They trick their victims with false jobs advertisements, take their passports, and in some cases torture people to force them to steal your money.
▶ 0:19:08Chair Risch: Fortunately, the administration is working to end this horrible practice with its scam center strike force. It has blocked more than eight hundred million dollars of cryptocurrency transactions from going to these chinese criminal groups. At that number is just a drop in the bucket compared to the scale of the problem. As these scam centers evolve to use ai and other technologies to stay ahead of law enforcement, it is more important than ever that we mount an effective response.
▶ 0:19:36Chair Risch: This will require the entire U.S. government working with their international partners to address the pipeline of human trafficking and build complex legal cases against these criminal groups, who are often aided and abetted by foreign governments. This issue is not a partisan issue. It is clearly a bipartisan issue. It affects every american. The skimmers don't care whether you are a republican or democrat. They just want your money.
▶ 0:20:08Chair Risch: I hope today that our witnesses will share more about the state department's role in this effort. How are we working with partners like the u.k., australia, and japan, whose citizens have also lost money to these crimes? We would like an answer to that question. What can we do to help foreign law enforcement agencies to bring strong cases against the beneficiaries of these scam centers and assure they are shuttered for good. Another question we would like to answer.
▶ 0:20:36Chair Risch: Finally, what are we doing to hold the governments of countries that host and enable these scam operations accountable? I look forward to learning the answers to these questions from our witnesses, as well as hearing the recommendations for what additional authorities or increased international cooperation efforts may be needed to protect the american people from this growing threat. Thank you to the witnesses for being here. With that, I turn it over to senator shaheen.
▶ 0:21:04Sen. Shaheen: Thank you to our witnesses for being here today. As the chairman says, behind many of the online scams targeting americans are scam compounds where trafficked workers are forced to defraud victims online. Just a few years ago, these compounds were concentrated in a handful of countries. Today, scam operations have spread to countries across africa, the middle east, asia, and even in the western hemisphere.
▶ 0:21:33Sen. Shaheen: Americans lose more than 12 billion dollars, billion with a b, a year to overseas scam compounds. We have that poster to remind everybody about the total. Global losses are now estimated to exceed 100 billion dollars each year. Every senator on this committee has constituents whose lives have been appended by sophisticated online fraud.
▶ 0:22:02Sen. Shaheen: In hollis, new hampshire, 178-year-old lost about $150,000 after being lured into a fraudulent online investment scheme. Another granite state resident reported purchasing a vehicle online and lost 6002 hundred dollars and never received the car, and his calls went unanswered. We have had a scam in new hampshire targeting our e-zpass system that has gone out to everybody who has an easy pass in the state.
▶ 0:22:31Chair Risch: I've got one of those.
▶ 0:22:36Sen. Shaheen: At a time when families are already feeling squeezed, they cannot afford to lose their hard earned savings to fraud. This hearing looks beyond those individual stories to the transaction -- transnational criminal organizations behind many of these sophisticated fraud schemes, and by law enforcement alone is not going to be able to dismantle them. These networks have direct consequences for U.S. national security.
▶ 0:23:00Sen. Shaheen: They span multiple countries, often eroding the rule of law and exploding -- exploiting weak governments, and they thrive on corruption. They rely on victims from more than 80 countries who have been trafficked and forced to carry out these scams. And they generate billions for transnational criminal organizations, many with links to china.
▶ 0:23:22Sen. Shaheen: Fighting them requires diplomacy, support for human trafficking victims, international law enforcement cooperation, sanctions, and strong partnerships with foreign governments. The good news is that the united states has begun responding to this threat. The administration has elevated countering scam compounds to be a national security priority.
▶ 0:23:43Sen. Shaheen: It has imposed sanctions on scam operators and human traffickers and has pursued criminal prosecutions and launched a governmentwide effort to combat these networks. These are important steps. But the criminal networks are adapting just as quickly. When one country cracks down, they move somewhere else. Without a coordinated global response, it becomes a game of whack a mole. These criminal organizations operate across borders.
▶ 0:24:14Sen. Shaheen: Our response has to be to operate across borders. That means supporting trafficking survivors, working with our allies and partners, and holding criminal organizations and the governments that enable them accountable. That is exactly the approach senator cornyn and I put forward in the scam compound mobilization -- immobilization act, which passed the senate by unanimous consent.
▶ 0:24:43Sen. Shaheen: The bill would build on the administration's work by making the coordinated international response a permanent part of U.S. policy. Today's hearing is about how we build on that progress. I look forward to hearing from her witnesses about what is working, about where the gaps remain, and what it would take to build a response that is every bit as coordinated as the criminal networks we are trying to defeat. Again, thank you for being here.
▶ 0:25:07Chair Risch: Thank you for those remarks. We are fortunate to have two people from the state department -- assistant secretary michael desombre is assistant secretary for the bureau of east asian and pacific affairs. We also have david be dark -- bedard, a deputy assistant secretary with the bureau of international narcotics and law enforcement affairs, also with the state department.
▶ 0:25:35Chair Risch: If you would give us the benefit of what we should know, we will start with you, Mr. desombre, and then we'll move to Mr. bedard. Mr. desombre, the floor is yours.
▶ 0:25:45Mr. Desombre: Chairman, ranking member, and distinguished members of the committee, thank you for the opportunity to testify on protecting americans from global scam operations and how the department is countering criminal online scams in east asia and the pacific region.
▶ 0:26:02Mr. Desombre: Criminal scam operations in verma and laos have -- burma and laos have become a sprawling economy operated by a professionalized and sometimes coerced workforce. Hundreds of thousands of individuals from dozens of countries are trafficked into these operations across these three countries alone. This is an industry with its own infrastructure, labor force, and supply chains.
▶ 0:26:30Mr. Desombre: Experts agree that chinese origin transnational criminal organizations are the major force driving the scam economy, with the vast majority of operations led and managed by chinese nationals. Americans have become significant targets. The initial 2025 estimates place reported losses from southeast asia-based scam groups at 12.5 billion U.S. dollars, a conservative figure. We anticipate actual losses to be significantly higher.
▶ 0:26:58Mr. Desombre: It is estimated these groups inflicted up to 114 billion dollars in losses on east asian and pacific countries in 2020 five. They are also resilient. When pressured in one location, they relocate and adapt, reducing their physical footprint while sustaining scam intensity through technology. In cambodia, some compounds closed by police raids open operations elsewhere in the country.
▶ 0:27:23Mr. Desombre: The department of state strategy is to identify vulnerabilities across the transnational criminal organizations and supply pressure at scale to disrupt the criminal actions and imposed costs on the organizations. That includes going after the bosses and financiers of the criminal organizations in addition to disrupting the physical and digital infrastructure, financial flows, and communication networks.
▶ 0:27:47Mr. Desombre: Dismantling leadership and cutting off financing is one of the critical ways to break the criminal networks rather than merely temporarily disrupting them. On march 6, 2026, president trump signed an executive order directing the secretary of state, treasury, war, homeland security, and the attorney general to develop a whole of government action plan to identify, disrupt, and dismantle these networks. The growing scale of the threat demands a unified response.
▶ 0:28:16Mr. Desombre: Estimated losses to americans in 2025 were triple the level in 2020 three, with americans in all 50 states targeted. My colleague will detail the interagency and department action plans. Our diplomatic message is consistent. We must target bosses, not just the low-level operations, and dismantle the entire scam ecosystem. We are raising this issue with regional partners. And with china.
▶ 0:28:46Mr. Desombre: We have encouraged china to allow chinese crime bosses to be held accountable internationally. We must drive up costs for these organizations, restrict their access to victims, and make clear that there is no safe haven jurisdiction that can shield them from the reach of the united states. We have backed this message with action. On july 23, secretary rubio announced a visa restriction policy targeting individuals involved in cyber crime and cyber naval crime and we intend to use it.
▶ 0:29:18Mr. Desombre: In 2025, it will cut off whaling groups access to U.S. accounts. Sanctions against the prince group helped trigger an international takedown of the organization, its ceo, and over 140 affiliates. This was also the target of a doj indictment and the forfeiture of approximately $15 billion in cryptocurrency, the largest such forfeiture in history. On april 23, treasury sanctioned a cambodian senator and 28 individuals and -- individuals in the scam network.
▶ 0:29:51Mr. Desombre: In april, the scam center force targeted chinese nationals and froze over seven hundred million dollars in cryptocurrency. In april, I led the launch of a 13 country coalition of our allies and partners most affected by the threat and capable of acting against it.
▶ 0:30:10Mr. Desombre: The counter scams contact group includes australia, canada, indonesia, japan, malaysia, new zealand, the philippines, the republic of korea, singapore, thailand, the united kingdom, and vietnam. We are using this group to collectively raise the cost on scam groups through law enforcement action, asset seizures, diplomatic pressure, and information sharing, while reaffirming U.S. leadership in the region. The threat originates abroad, but endangers tens of thousands of americans nationwide.
▶ 0:30:40Mr. Desombre: I credit the committee for elevating attention on this fight, including through the bipartisan scam act, as part of the whole government effort. The department of state will continue to do all we can to drive up the cost for these criminal scam groups and drive down the harm to americans. Thank you, and I welcome your questions.
▶ 0:30:59Chair Risch: We appreciate that.
▶ 0:31:01Mr. Bedard: Distinguished members of the committee, thank you for the opportunity to testify on behalf of the department of state and our work to protect citizens from scams. U.S. losses are staggering, but the true cost is not the dollars alone. Behind every statistic is a human story, as each of you rightly pointed out. Those are the people that we do this work for.
▶ 0:31:25Mr. Bedard: While verma, cambodia, and laos remain the epicenter, operations are extending across south asia, africa, and to the western hemisphere and beyond. Global networks compound the problem along with an screening of trafficking victims. As countries crack, skimmers are diversifying beyond large compounds into smaller decentralized operations in hotels in residential areas, making them harder for law enforcement to detect.
▶ 0:31:56Mr. Bedard: Chinese origin transnational criminal organizations drive the southeast asian scam economy. They operate as loosely affiliated businesses and many are poly criminal, running scams, trafficking drugs and people, and offering cyber crime as a service. These organizations operate in layers. There is a leadership tear that colludes with government officials, a management tear running day-to-day operations, and scam workers, many of them trafficking victims, others that are willing participants.
▶ 0:32:25Mr. Bedard: There are facilitators, complicit officials, lawyers, bankers, crypto converters, who keep this illicit economy running. These networks exploit a persistent vulnerability. Criminal operations are borderless, but law enforcement is not. They base themselves in jurisdictions with weak legal frameworks and limited technical capacity, betting that fragmented responses cannot keep pace.
▶ 0:32:49Mr. Bedard: In march, president trump signed an executive order combating schemes against american citizens, and directed the secretary of state to demand enforcement action from foreign governments. The state department is coordinating with the homeland security council on an international approach built around four lines of effort. First, a global diplomatic campaign pressuring countries through joint statements and coordinated action.
▶ 0:33:14Mr. Bedard: Regional bureaus such as the one assistant secretary desombre leads leads diplomatic engagement with foreign capitals, while iml engages on public security and justice, and the law enforcement agencies that do the operational work. We work multilaterally to align partners with the common approach. The adoption of the first resolution combating cyber fraud was cosponsored with japan and the united statement.
▶ 0:33:42Mr. Bedard: Imposing costs on transnational criminal organizations and their enablers and complicit officials who give them safe haven. Tools include support for asset seizures, extradition requests, and targeted sanctions to deny these networks the resources that would drive them to change their behavior. On july 20 three, secretary rubio announced a new visa restriction policy targeting cyber criminals, in particular those engaged in cyber scams and esextortion.
▶ 0:34:14Mr. Bedard: We rely on foreign law enforcement. Where warranted, iml provides training and equipment so foreign partners can investigate these enterprises and their financial flows in cooperation with U.S. law enforcement. Thailand is a strong example. The evacuation of scam workers in vermont -- they embedded -- we embedded agents with the royal thai police,