An island-based e-gaming company raided by police as part of an investigation into large scale international money laundering has links to a ‘criminally implicated’ business group in Cambodia.

The claim is made in a new report by the United Nations Office on Drugs and Crime which was published on Easter Monday.

Titled ‘Inflection Point: Global Implications of Scam Centres, Underground Banking and Illicit Online Marketplaces in Southeast Asia’, the Isle of Man is referenced a total of 16 times in the entirety of the 94-page report.

The report states that transnational organised crime in that region is evolving faster than ever before, rapidly diversifying its operations and expanding into new jurisdictions by exploiting gaps in regulation.

It follows up a previous UNODC report from October which revealed that organised crime groups have expanded into the Isle of Man, where numerous ‘white label’ companies are hosted and receive licences to operate online casinos.

Police confirmed they made two arrests in relation to a large-scale international money laundering investigation.

The UNODC report states that corporate filings indicates both companies to be ‘owned by a criminally implicated business group active in Cambodia that has been extensively linked to illegal online gambling and cyber-enabled fraud’.

It says that law enforcement action in Isle of Man continues to target ‘online gambling and transnational criminal actors’ and cites the raids in April last year on the premises of King Gaming in connection with a wider fraud and money laundering investigation.

The report doesn’t refer to the company by name but only as a ‘major online gaming company’.

Elsewhere in the report, the Isle of Man is cited in a section entitled ‘Unmasking the Vault Viper network’.

Asian crime syndicates are highly entrepreneurial and known to mask their criminal operations and illicit financial flows as legitimate business interests and investments, the report notes.

While many sectors are targeted by these powerful networks, it has been most apparent in casino resorts, hotels, ‘junkets’, and ‘severely under-regulated’ online gambling and digital payment platforms around which Asian organised crime has converged.

‘Criminal groups engaged in these complex, interconnected industries have built out their portfolios in jurisdictions deeply challenged by weak or virtually nonexistent regulatory frameworks and low levels of investor screening, threat awareness, and enforcement capabilities,’ the report states.

Security experts have identified a cluster of illegal online gambling websites involved in malware distribution owned and operated by criminal groups known to be engaged in large-scale cyber-enabled fraud, human trafficking and money laundering.

One such de facto malware distributor has been named Vault Viper by security researchers but is also referred in the UNODC report as Business Group 1, which was founded in Taiwan and had had a large operational base in the Philippines since 2006.

The report says the full extent of the group’s operations and ownership structure are largely concealed through a ‘tangled web’ of companies with supported online gambling websites regularly displaying i-gaming authorisations from regulators in jurisdictions including the Isle of Man.

In an executive summary, the report states: ‘Transnational organized crime in Southeast Asia is evolving faster than at any previous point in history. This was first observed in the shift to synthetic drug production, and particularly methamphetamine.

‘This transformation has been marked by the proliferation of industrial scale cyber-enabled fraud and scam centres, driven by sophisticated transnational syndicates and interconnected networks of money launderers, human traffickers, data brokers, and a growing number of other specialist service providers and facilitators.’

Crime groups, it adds, have been able to exploit gaps in governance and regulations, and integrated new business models and technologies including malware and AI into their operations.

They have been able to scale up their operations using illicit online platforms, creating new opportunities to expand operations overseas, and increasingly being used by criminal groups outside of Southeast Asia to launder proceeds of crime and circumvent formal financial systems, the report concludes.

In a statement, the island’s Gambling Supervision Commission said: ‘The GSC takes information from international bodies such as UNODC very seriously and continues to work together with other agencies to target transnational criminal activity in the gambling sector and beyond through a coordinated approach.

‘The Isle of Man Government, and all its relevant agencies and bodies, has a zero-tolerance attitude towards criminal activity.

‘Significant and wide-reaching action is ongoing to ensure the GSC identify and mitigate such threats, and we will not hesitate to use our regulatory authority to support law enforcement to halt those who engage in criminal activity in the island.’