The Darker Side of Tropical Bliss: Foreign Mafia in Thailand

By Thomas Schmid

25 February 2010

While one cannot directly own real estate, it is comparatively simple to set up a proxy company with some like-minded Thai lackeys to invest money in projects ranging from holiday resorts to nightclubs. It holds true that so-called “Thai partners” still pocket the bulk of profits, but it is still an elegant and unsuspicious way to get rid of hot money. Tracing funds, which are shifted from one account to another, is practically impossible. It’s even more impossible to determine that funds have been derived by illegal means without potential witnesses like Mr. Keienburt. Who doesn’t talk anymore.

Yet another excellent method to skim unsuspecting people of their life savings is the operation of so-called “boiler rooms”. A boiler room is basically a rented space furnished with desks and lots of telephones. A phalanx of accomplished sales people each “cold-call” literally hundreds of potential clients every day and talking them into investing substantial amounts of money in “house stocks”, a term that describes worthless, over-priced or even non-existent company shares and securities. The lure is of course the promise of phenomenal gains over short periods of time. It almost goes without saying that these profits generally don’t materialize. Boiler rooms are highly illegal, but operators have the distinct advantage that they can (and do) easily close down one facility over night, just to re-open the very next day at a new location and continue their activities. Over the years, Thai authorities have raided numerous boiler rooms. In 2006, for example, six such bogus firms were smoked out and their proprietors charged by the Securities and Exchange Commission. However, duped investors rarely recoup their money. One notable exception in March 2005 when a group of 12 Australian investors succeeded in reclaiming some 11.7 million Baht in funds as a result of an unprecedented Thai court ruling against International Asset Management, a boiler room that had been in business at least since 2001. Nevertheless, the recovered funds represented only a mere 30 per cent of the Australians’ combined total investment.

The Russian Connection

The former Soviet Union gradually broke up starting in 1989. The result was not only the creation of several new nation states, but also the eventual dissolution of Russia’s dreaded KGB secret service. Suddenly, thousands over thousands of former KGB operatives or associates were left breadless and had to search for new means of income. Maintaining former contacts and drawing on their individual expertise gained during many years of faithful service, some of them soon found new locations where to play their talents. In the 1980s, Thailand received a mere trickle of visitors from the Soviet Union, mostly dignitaries and “privileged citizens” worthy of representing a dying regime abroad. Post-1989, visitor numbers of Russian tourists to Thailand soared. In 2009, almost 300,000 tourists from the former Soviet republics visited the Kingdom. In their wake, and sensing opportunity, Russian mafia organizations established themselves soon thereafter. While Pattaya was previously dominated by German restaurants, it is nowadays flush with Russian eateries – and the Russian mob, of course. Many of those cozy restaurants are little more than money laundering operations.

With the mob also arrived Eastern European prostitutes, virtually unheard of prior to 1989. Bangkok’s downtown area around Sukhumvit Soi 3 to 15 has matured into a “hub” of which Thailand can hardly be proud.

Mafia Killings

The local rainbow press frequently features headlines about alleged foreign mafia killings. One of the most spectacular and unsettling cases dates back only a few years. On 24 February 2007 the bodies of supposed Russian tourists Tatjana Tsimfer (30) and Liubov Svirkova (25) were discovered in beach chairs on Jomtien Beach, just over the hill from Pattaya City proper. They had been killed by several gun shots to their chests. On a table next to the corpses police investigators found neatly arranged a couple of unfinished beer bottles and a half-finished pack of cigarettes. No lighter was recovered on either body or in the vicinity. “Blurry video footage” from a CCTV camera supposedly revealed the killer to be twenty-something Anuchit Lamlert, a Thai national with a previous criminal record. He was taken into custody a few days later and he soon confessed to the murders. Skeptics, however, were unconvinced and speculated that Anuchit was making himself a scapegoat in order to protect the true culprits behind the crime and obscure the real scenario. Firstly, the two women were dressed up and wore make-up for a “night on the town”, not for a beach visit between 4.30 a.m. and 5 a.m., the approximate time of their deaths. Prints of “army-style boots” were allegedly found at the scene, suggesting that the bodies were placed there after their demise by somebody else in an effort to conceal the real crime. Last but not least, the two dead women had been in Thailand for at least two months, much too long for an average, innocent vacation of pleasure. Website forums were overwhelmed with a myriad of different theories. Quite a few posters suggested that the two victims were in fact prostitutes who intended to “get out” and were subsequently killed by the Russian mob as “a warning to others”. At least one theory had it that the two women might have been employed as actresses in a so-called snuff movie, in which the unwitting cast are sexually tortured and then killed on camera at the end. Although rumors of snuff movies persist, law enforcement authorities have never actually recovered any such movie anywhere in the world.

But the mafia is also not squeamish when it comes to eliminate one of their own. Everybody remembers the infamous “Valentine’s Day Massacre” of 1929, carried out by Al Capone’s designated death squad using almost iconic tommy guns (a type of early submachine gun) on members of a rival gang in Chicago. Modern mafia killings are less spectacular and accomplished more discreetly. Thai police arrested in mid-February 2010 Anai Kenichi, who had fled to Thailand after allegedly murdering a prominent Yakuza boss in June 2009.  In late May 2006 New Zealand national Ian Travis was killed by two Thai hitmen allegedly hired by his former partner, American national James Francis Muller. Travis had left Muller to set up his own rival boiler room, a plan which upset his former partner.

Handbags, Movies and other Fakes

Visitors to Thailand are often amazed by the sheer volume of pirated brand names goods and counterfeited movies being sold at discount prices in city sidewalk stalls.  However, when buying pirated DVD copies of Hollywood blockbusters, one should be aware that the majority of those are not produced in Thailand. They come from Russia, China, Taiwan and – increasingly – Malaysia and foreign mafia gangs frequently are engaged not only in their smuggling across the border but also their distribution to retail outlets, often in cahoots with local gangs. Counterfeit brand name garments, handbags, suitcases and other accessories, pirated computer software, games and movie DVDs are still openly sold at many places in Thailand, notably locations such as Bangkok’s Pantip Plaza or the night bazaar cluttering Patpong Road. In recent years Thai police have come under intense pressure from individual companies and even governments to stamp out the trade in counterfeit products. The country has even set up the Intellectual Property department under the Royal Thai Police to deal with such infringements. Sizeable quantities of fake goods are seized and destroyed under much fanfare on several occasions every year, but the authorities appear to be fighting an uphill battle. While Phuket Provincial Police publicly incinerated more than 200,000 counterfeit products of a multitude of types and worth in excess of 43 million Baht on 8 February 2010, such amounts represent merely the tip of the iceberg as even the authorities admit that enormous quantities of pirated goods continue to flood the Kingdom.

Besides counterfeit merchandise, forged or falsified passports and other travel documents are yet another area of lucrative engagement pursued by foreign mafia elements. In this context, it is predominantly Pakistani, Iranian, Indian and Bangladeshi gangs who seem to have carved out a niche for themselves here for reasons that are difficult to determine. The US Embassy Thailand as well as many foreign embassies in Thailand have issued warnings to their citizens regarding the potential for passport theft in Thailand. At this point we need to understand the difference between a “forged” and a “falsified” passport. A forged passport is produced from scratch emulating the appearance of a genuine document, often to absolute perfection. Falsification, on the other hand, constitutes an authentic document – stolen or appropriated otherwise from its legitimate owner – that is then subsequently altered by various sophisticated means to be attributed to another person. Such counterfeit or altered documents are highly priced in the black market, regularly fetching up to US$10,000 a piece. They can be used by convicted criminals or terrorists who wish to assume a new identity or are peddled to people who wish to immigrate to a new country without having the means of doing so legally. In December 2009 Thai authorities arrested a 6-member gang comprising several Thais, a Sri Lankan, a Pakistani and a Burmese Rohingya and seized from the more than 300 fake British, French and Belgian passports, as well as the tools and machinery to produce them. A little further back into the past, on 26 September 2009, police caught a British national of Iranian extraction at Suvarnabhumi airport. In his possession were 130 genuine passports that had been stolen in Spain from Italian, British, French and German tourists. The suspect, who carried a fake Iranian passport, was accused of trying to smuggle tem into the country so the documents could be altered and sold.

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