A Chinese-run gambling company is under investigation following claims by employees of delayed salaries, prostitution activities and love scams, in a case that has highlighted the complex issues surrounding the Philippine online gaming industry.
A 2,000-strong team from the Philippine police force raided Xinchuang Network Technology, Inc – a vast Chinese-run online gaming complex in southern Manila – on June 26, seizing computer data and safety box vaults allegedly in connection with human trafficking and “love scam” activities inside the complex.
More than 2,700 people, including 1,534 Filipinos and 1,190 foreigners, were rescued. Of the foreigners, 604 were from China and the rest from countries as far as Sudan and Nigeria.
Five Chinese nationals were charged with human trafficking and linked to operations at Xinchuang.
The number of victims rescued from seven buildings in Las Pinas city, metropolitan Manila, and the scale of the raid were the largest so far this year and indicate how the Philippines has become a key base of operations for cybercrime syndicates.
The complex, referred to locally as the “Hongtai” compound, housed thousands of computers, nearly 3,000 employees and dozens of large safety box vaults. It also included a nightclub, a “romance room”, and service apartments with a host of amenities including eateries and a private swimming pool.
Xinchuang’s operations were kept hidden from the public behind dark blue walls topped with barbed wire.
According to veteran crime reporter Non Alquitran, a letter by three women sent to President Ferdinand Marcos Jnr played a part in prompting police to raid Xinchuang.
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Alquitran, who had seen the letter dated May 25, 2023, said the women complained their salaries as “special staff” of the Xinchuang “managers” were delayed for six months. The trio identified these managers as Qiuhua Lu, Liangfei Chen and Jimmy Lin, and claimed Xinchuang was engaging in prostitution using undocumented workers and human-trafficking activities.
Alquitran told This Week in Asia the letter contained evidence and annexes of what the women alleged.
But three senior police officials who spoke to This Week in Asia said they were unaware of the women’s letter to Marcos Jnr.
Police Brigadier General Ricredo Maranan, the force’s public information office chief, told This Week in Asia that the raid was conducted after receiving complaints from Xinchuang employees “about their [delayed] salaries, their working conditions and the cybercrime incidents they had personally observed happening”.
Maranan said the June 26 raid was “a regular police operation; just an implementation of a search warrant”.
The operation, however, did not go down well with Department of Justice Secretary Jesus Crispin Remulla, who on Monday slammed police actions as “fishing for evidence”.
Remulla said police “had no case” against the five Chinese nationals because “there are no specific acts, no specific grounds for their arrests”, and called for their release.
In response to Remulla’s claims, Maranan on Tuesday reiterated that police moved in on Xinchuang after receiving evidence from complainants.
On Wednesday, Maranan said the five indicted Chinese nationals, who Remulla had ordered to be released, were still in police custody because the lawyer who was to receive them was “still a no show”. Only four Chinese nationals whom the Chinese embassy said had pending arrest warrants in China were turned over to the immigration department for deportation.
Xinchuang’s counsel Ananias Christian Vargas had been calling for his clients’ release, saying earlier this month the company was a legitimate gaming service provider accredited with the Philippine Amusement and Gaming Corporation (Pagcor), the state gambling regulator.
He later threatened criminal action against police for refusing to release his clients, claiming some of them had been injured by officers.
Maranan countered that the foreigners could not be released as police were still searching the Hongtai compound. “Those are all subject to search warrants so we have to search [offices and computers] one by one. That’s why it’s taking so long,” he said.
Police Brigadier General Jack Wanky, who had led the raid, said the foreigners were still being profiled and reported to their respective embassies.
On social media, Filipinos remain divided over the Hongtai raid, with some praising the police while others lambasted them for driving away Chinese investors.
User Julie Hale on Facebook slammed a top executive at Hongtai who was “untouchable” despite his questionable activities, while two people who said they had been in the Hongtai compound during the raid shared videos denouncing police over the raid and claiming the officers were after the money inside the safety box vaults.
Investigation by This Week in Asia revealed that Xinchuang had posted recruitment ads on Facebook in the last few months offering high salaries and other benefits. Its March 14 ad promised Filipinos a monthly salary of up to 30,000 pesos (US$540) with free meals and board, and 100,000 pesos monthly for other Asians and “Mandarin translators”.
The June 6 ad called for an English-speaking, computer-literate, female “spammer” and “experience at crypto trading”, promising a monthly salary of 30,000 pesos and “big commission”.
The salaries Xinchuang offered would be attractive to Filipinos as it was “hard … to find a decent job in the Philippines with this same salary”, said Police Captain Michelle Sabino, spokeswoman of the force’s anti-cyber crime group.
This was not the first time the gaming complex had a brush with the law. On January 14, 2022, police raided the Hongtai compound to rescue a Chinese national named Bi Wenqi, who was alleged to have been being physically harmed and detained by his employer. Bi’s employer was said to have demanded 4 million pesos from him in exchange for his freedom.
The case died down and it was unclear whether Xinchuang was ever investigated.
After the recent raid, Pagcor on July 3 ordered Xinchuang to stop operations and explain why its accreditation should not be cancelled following evidence linking Xinchuang to “possible involvement in human trafficking and cryptocurrency and love scams, among other illegal activities”.
