The photographs released by Chinese police showed their officers holding a man and a woman in handcuffs in front of a border gate.
They had just been handed over from Myanmar, the latest in scores of arrests of those accused of running scam centres in a town on the north-eastern border with China.
The two were Ming Guoping and Ming Zhenzhen, son and granddaughter of one of the powerful warlords who have run the town of Laukkaing for the past 14 years.
A sudden escalation of the conflict in Myanmar has spelled the end of the Chinese mafia – the Godfather-esque “four families” – in this notoriously lawless border town.
At around the same time as the Chinese police released the photos of the handcuffed pair last Thursday, the official Myanmar military news published a photo of an apparent autopsy being conducted in the back of a van on the body of a 69 year-old man.
It was the warlord himself – Ming Xuechang – who, the military said, had taken his own life after being captured, an explanation greeted with scepticism by many.
It was an ignominious end to an extraordinary story that began in the days of war and revolution, but turned into one of drugs, gambling, greed and Machiavellian rivalry.
The four families
Ming Xuechang was a henchman of Bai Suocheng, who heads one of the families.
Under them the remote, impoverished backwater of Laukkaing was transformed into a rowdy casino hub of gaudy high-rise towers and seedy red-light districts.
Although powerful, the Mings were not a part of this coveted list of four – the other three families were headed by Wei Chaoren, Liu Guoxi and Liu Zhengxiang.
Initially developed to take advantage of Chinese demand for gambling, which is illegal in China and many other neighbouring countries, Laukkaing’s casinos evolved into a lucrative front for money laundering, trafficking and in particular for dozens of scam centres.
More than 100,000 foreign nationals, many of them Chinese, were estimated to have been lured to these scam centres, where they were effectively imprisoned and forced to work long hours running sophisticated online fraud operations targeting victims all over the world.
Ming Xuechang ran one of the most notorious of these scam centres, called Crouching Tiger Villa. He also reportedly ran the local police force, which, while it donned the regular uniform of the Myanmar national police, acted as little more than a private militia, one of several which enforced the rule of the four families in Laukkaing.
In September, as China ramped up pressure on all the groups running scam centres to shut them down and hand over those who worked there, the Ming family resisted. By some estimates the casinos of each family were processing several billion dollars every year. It was a huge business to give up.
The families also had close ties to the Myanmar military, and the Mings may have believed they were protected, even from the demands of China, which has long had a powerful influence in this border region.
The Beijing factor
In the early hours of the morning of 20 October, a group of scam workers was being transferred from Crouching Tiger Villa, probably in anticipation of a move against the scam centre by the Chinese police.
A number of workers, reported to be between 50 and 100, tried to escape, and the scam centre guards opened fire, killing several. Some accounts say there were undercover Chinese police officers among the dead.
That prompted a strongly-worded letter from the local government office in the neighbouring Chinese province – and the announcement of arrest warrants by the Chinese police for four of the Ming family.
It was China’s visible frustration over the unwillingness or inability of Myanmar’s ruling junta to rein in its allies in Laukkaing which encouraged three insurgent armies, calling themselves the Brotherhood Alliance, to launch their attacks against the military in late October.
China has in the past always urged restraint in order to keep the peace on its border, but its need to weed out the well-funded and well-armed families in Laukkaing appears to have changed its priorities.
The insurgents say their goal is to eliminate the scam centres, and to support the wider opposition campaign to overthrow the military regime which seized power in 2021.
But in Laukkaing the conflict is more like payback, in a vendetta which goes back to the days of the Cold War.
The Godfather(s) of Laukkaing
The four families owed their control of Laukkaing to none other than Min Aung Hlaing, the military commander who led the 2021 coup and still heads the junta.
Back in 2009, Min Aung Hlaing led a military operation to oust the then-dominant warlord in Laukkaing, a veteran fighter called Peng Jiasheng.
He wanted to install allies more compliant to the needs of the then-military government, which at the time was putting pressure on all of Myanmar’s ethnic insurgent groups to transform themselves into pro-government so-called border guard forces.
Most refused, including Peng, even though the military had promised in return that they would be allowed to continue making money from illegal businesses like narcotics.
Peng was part of a generation of warlords in Shan State who emerged in the chaos of the post-independence years in Myanmar, when the central government’s authority did not extend to most border regions.
Desperately poor, remote and infertile, Shan State’s only real economy was the cultivation of opium. It became the world’s largest producer, and funded the various insurgent groups.
Peng began as a commander in the China-backed Burmese Communist Party, but he mutinied in 1989 as Chinese support stopped, breaking the Burmese Communist Party up into several armed insurgent groups.
This was a time when the Myanmar military government was feeling vulnerable. It had just crushed a popular uprising in 1988 with great brutality – the uprising in which Aung San Suu Kyi first emerged as an opposition leader.
Worried about a possible alliance between the established ethnic insurgent groups and the opposition movement, the generals moved quickly to make peace with the insurgents, giving them a free hand to run their fiefdoms as they pleased.
Peng began developing Laukkaing as a gambling hub after being put under pressure to cut back on the narcotics business that was funding his operation.
But when in 2009 he rejected the military’s request to turn his forces into a border guard force, Min Aung Hlaing persuaded Bai Suocheng, Peng’s deputy-commander at the time, to rebel against him.
Peng was driven out into China. The casinos were left pockmarked by bullet-holes, although dedicated gamblers kept betting throughout the fighting. Bai and the other three families took over the casino economy.
With their close ties to the military they developed extensive business networks in Myanmar, with stakes in mining, energy, infrastructure and casinos in other countries like Cambodia. They established links with organised crime networks in Macao and south-eastern China.
Laukkaing took on the character of a Wild West boom town, where anything goes and anything can be bought and sold. There were occasional gun battles between rival scam centres, and powerful people kept lions and tigers as pets.
But much of Peng’s insurgent army, the MNDAA, remained loyal to him. In 2015 he tried, and failed, to retake Laukkaing from the four families.
The MNDAA then formed an alliance with other Shan armed groups. When Peng died last year at the age of 91, he was given a lavish funeral worthy of a mafia don, attended by most of the insurgent and warlord leaders in the region.
Even Min Aung Hlaing sent a senior military commander to pay his respects to his old adversary. Peng’s children took over command of the MNDAA, waiting for the opportunity to oust Bai, in their eyes the usurper.
With MNDAA troops now in control of the main border crossing and all roads to Laukkaing, they are poised to retake the casino capital, the engine-room of the “scamdemic”, as it has been dubbed by the UN.
What they do with it is anybody’s guess, but having promised China to end the scams, they will need to find another way to fund their insurgency.
Their expressed goal of helping overthrow the military junta has been welcomed by the broader opposition movement.
Over the past month, millions in Myanmar have been enthralled by the triumphant scenes of ethnic insurgents parading captured soldiers and equipment, while the drama of the mafia’s end has been playing out in Laukkaing.
After enduring nearly three years of a violent military dictatorship, the junta looks vulnerable and people can dare to dream that it might fall.
But, given the history of serpentine shifts of loyalty in this lawless region, the MNDAA’s stated aims must be viewed with caution.
At the time of writing Bai Suocheng’s whereabouts are unknown. It’s also unclear where two of the other warlords – Wei Chaoren and Liu Zhengxiang – are currently. The fourth, Liu Guoxi, died in 2020.
But many members of their families are now in Chinese custody; some have made remorseful confessions. Thousands of those working in the scam centres have already been handed over to the Chinese police. Governments in the region are trying to get hundreds more, still trapped in Laukkaing, out to safety.
The scamdemic in north-eastern Myanmar may now be over, although perhaps only to relocate to another lawless corner of the globe.
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