A seaside hotel and former bank offices on the Isle of Man became a hub for scammers who defrauded victims in China out of millions of dollars, according to a BBC World Service investigation. The Seaview Hotel in Douglas was filled with numerous Chinese workers using high-speed internet for their schemes. Reports indicate that a specialized wok hob was even delivered to the hotel’s kitchen.
The fraudulent activities occurred between January 2022 and January 2023, employing a method known as “pig-butchering.” This technique, which involves building trust with victims before exploiting them, was key to the operation’s success.
The BBC conducted an extensive investigation over nearly a year to expose how the investment scam operated from this British Crown dependency, which boasts its own government. The inquiry revealed ambitions to establish a state-of-the-art office complex overlooking the Irish Sea.
Documented evidence, leaked files, and interviews with insiders, including a former employee named Jordan (a pseudonym), painted a clearer picture. Jordan was unaware of the deceptive environment he was entering when he took what he thought was a stable administrative position. He noted the secrecy surrounding his employer, who prohibited photographs at company events, while many of his colleagues were actually engaged in scam activities.
In late 2021, about 100 individuals were transferred to the Isle of Man to work for a firm referred to in Chinese court documents as “MIC,” which stands for Manx Internet Commerce. Many of these workers had previously been employed by another fraudulent company in the Philippines.
Among MIC’s associated companies was an online casino operated by King Gaming Ltd, capitalizing on the illegality of gambling in mainland China while benefiting from the Isle of Man’s low taxes. After a few months at the Seaview Hotel, MIC employees were relocated to former bank offices in town.
Jordan recounted hearing his colleagues cheer intermittently, which he now believes was in celebration of successfully scamming victims located thousands of miles away.
Six MIC employees were convicted upon returning to China for their roles in defrauding Chinese citizens. Chinese court documents from late 2023 outlined the money flow and detailed how victims were lured into chat groups on QQ, a popular instant messaging app. One scammer posed as an investment “teacher,” while others feigned being fellow investors.
Evidence from the court indicated that those who had arrived in Douglas from the Philippines were actively involved in the scams, using the same computer setups and primarily working through QQ. They created an atmosphere of excitement around the investment skills of the “teacher,” convincing victims to invest money into manipulated platforms.
The Chinese court struggled to ascertain the total losses, but confirmed that 38.87 million renminbi (approximately £4.17 million or $5.3 million) had been stolen from at least 12 victims. The court used various forms of evidence, including confessions, travel records, and chat logs, to find the defendants guilty.
The scam was not only profitable but also complex, relying on persuasive “pig-butchering” tactics. The BBC identified Bill Morgan, also known as Liang Lingfei, as the sole beneficiary of MIC and its affiliates. Court documents referred to him as a co-founder of MIC, describing it as a stable criminal organization. Although not prosecuted, he was connected to a similar operation in the Philippines.
Liang obtained an Isle of Man investment visa and participated in various company events. His family also owns property on the island. Ambitious plans for a new corporate campus on a former naval training base were halted when police raided the offices linked to the scams.
In April, law enforcement conducted searches at multiple locations, arresting seven individuals in connection with broader fraud and money laundering investigations concerning King Gaming Ltd IOM. The Isle of Man’s attorney general later appointed receivers for MIC and its affiliate companies, stripping them of their gambling licenses.
Despite efforts to contact those involved in the scam and the Seaview Hotel, there has been no response. The hotel has no indication of complicity in the fraudulent activities.
This situation marks a notable case of an organized scam operation establishing itself in a Western country, highlighting ongoing challenges in combating such international fraud.