The Fate of Forest City Apartments, Now a Scammers' Den

From a distance, Forest City in Malaysia looks as though it has been printed with a 3D printer: rows of identical white blocks clustered along the coastline.

When introduced by Chinese developers in 2016, this US$100 billion (around Rp178 trillion) mega-project was promoted as a ‘dream paradise for all of humanity’ — a special financial zone capable of housing around 700,000 residents.

But a decade later, the number of people living on the 14-square-kilometre artificial island near Singapore is estimated at just 1% of that figure.

Rows of skyscrapers tower over silent streets. Inside empty apartments, kitchen worktops and windows are coated in a layer of dust.

‘In 2016 they described this place as a golden city; very, very beautiful,’ said Jason Deng, a 56-year-old investor who was among the first buyers at Forest City. At the time, he spent ‘a lot of money’ to purchase five properties.

‘If I had known this place was not that good, I would not have bought so many apartments,’ he now says. ‘I used to think this place would be far, far better.’

As it turns out, it is only a golden city for some people — and they are not the people the developers hoped would come.

In mid-July, Malaysian police raided two scam syndicates suspected of operating across 32 locations in Forest City. A total of 335 people were arrested and assets worth around one million ringgit (Rp4.3 billion) were seized, including 313 computers, 1,557 mobile phones, 17 laptops, and 10 modems.

Of the two syndicates, one occupied 27 apartments across five floors of a residential tower, while the other was spread across five bungalows. Both were cryptocurrency syndicates running investment and romance scams targeting victims abroad, according to police.

Those arrested included 309 Chinese nationals, 19 Indonesians, three Malaysians, and four Myanmar nationals.

Johor Police Chief Ab Rahaman Arsad said authorities were working with Interpol to track down the masterminds behind the operations. The BBC contacted Forest City and Johor police for comment but received no response.

Experts and local residents told the BBC that this is likely just the tip of the iceberg, and a symptom of a global scam industry that continues to spread, evolve, and become more professional.

‘The reality is that many of these organisations now resemble multinational corporations more than traditional organised crime networks or gangs,’ said John Wojcik, an analyst at TRM Labs, which investigates crypto-related crime. ‘They have dedicated recruitment teams, IT departments, money-laundering specialists, and infrastructure.’

Over the past five years, this criminal sector has grown into a multi-billion-dollar industry built on the forced labour of human-trafficking victims through violence, threats of torture, and abuse.

Since late last year, the Cambodian government has stepped up efforts to dismantle such operations. Authorities recently estimated that 300,000 people had left the country within a few months as raids on industrial-scale compounds intensified.

But these Malaysian branches do not appear to be scam ‘compounds’ in the traditional sense. Compared with the better-known fenced compounds in places like Sihanoukville or Myanmar’s border regions, the suspected scam syndicates at Forest City look more like office neighbourhoods. They reportedly employ local residents and sit directly alongside unsuspecting neighbours.

Kevin, a tenant who also works in Forest City property sales, believes the scammers are still operating in ‘condominiums or serviced apartments’ within the complex. He asked for his name to be changed out of concern for the consequences.

‘We know what they are doing,’ he said. ‘This is actually a very common problem in Johor City and Kuala Lumpur, but especially in Forest City. Forest City is very special.’

‘When talking to clients or customers, the company teaches us to say “we already have 23,000 residents living in this area”,’ Kevin said. But in reality, he added quietly, the number is ‘less than 5,000’.

‘That is the reason’ the scammers chose Forest City as their base of operations, he said. ‘They have their own privacy… No one comes here.’

Several factors triggered Forest City’s decline. Spearheaded by Country Garden, one of China’s largest property developers, and Danga 88, a private company controlled by Malaysia’s Sultan Ibrahim Iskandar, the project was originally designed as an eco-friendly metropolis for wealthy Chinese clients.

With luxury hotels, a golf course, and a water park, the resort-style offices and waterfront apartments were expected to see high demand. But the combined impact of the Covid pandemic, China’s worsening property crisis, and lending restrictions for Chinese nationals destroyed those lofty ambitions. As a result, the project nearly ground to a complete halt.

Lights still come on, but almost no one lives there. That appears to have made the complex a magnet for scammers.

‘Forest City reflects the conditions that organised crime has targeted for years: a prime location marketed as a luxury smart city — prestigious and thoroughly planned — but one that never came close to that vision,’ said Wojcik.

‘Developments like this offer exactly what these syndicates are looking for: modern infrastructure, large numbers of vacant properties, and international connectivity, all wrapped in a layer of legitimate economic activity so that the criminal nature of what happens inside remains invisible,’ he said.

Despite facing many obstacles, and with only 15% to 20% of the project completed, Forest City still markets itself as a potential hub for property investment, technological innovation, and duty-free business ventures.

That kind of entrepreneurial packaging is useful for scammers who want to run operations without attracting attention while also enabling them to carry out fraud more effectively.

Wojcik explained that ‘when scam syndicates can hide behind seemingly legitimate businesses in ordinary commercial areas, they not only become harder to detect and dismantle, but are also able to amass enormous power and influence through the massive profits they generate’.

This power and influence ultimately allows scammers to become more professional in various ways. Although human trafficking remains a source of labour for much of the scam industry, there is now a visible trend of syndicate operators recruiting and retaining experienced scammers with higher salaries and better working conditions.

Meanwhile, in Telegram groups where scam jobs are advertised, experienced scammers now also post detailed CVs, describing their experience in fraudulent activities and emphasising their desire to work.

‘This is a sign that the industry is developing into a more professional criminal enterprise, even though coercion and exploitation remain widespread,’ said Wojcik.

The Forest City raids highlight a transnational scam industry that is changing in size and shape. But this is not the first time such operations have been detected in Malaysia.

Throughout 2022, before the industry gained widespread global attention, Malaysian authorities raided several scam syndicates operating from bungalows and condominiums in the southern state of Johor, the northern state of Penang, and the capital Kuala Lumpur.

Although the crackdowns signal that Malaysian authorities do not tolerate scam syndicates, Wojcik noted that Malaysia remains home to influential criminal networks, and that ‘any sign of a large-scale resurgence deserves serious attention’.

At Forest City, such signs may already be emerging. Kevin said it is an ‘open secret’ that scams are taking place there, and that ‘the only surprising thing is that the police acted effectively’.

He believes there are still more similar syndicates. Yet he is not troubled by the possibility that his neighbours might be defrauding people out of hundreds of thousands of dollars.

‘For me, I don’t care,’ he said. ‘It’s not my business… I work here just for the salary.’

Other residents feel the same way. Phillip, whose name we have also changed, moved to Forest City from Singapore last year, drawn by the relatively cheap property market. He works in technology and says he is ‘very focused’ on cyber protection issues.

‘Yes, they [the scammers] might be right at my doorstep, they might be my neighbours… [they] could be one of those running this kind of syndicate. In the end, no matter where you go, this kind of thing will still happen.’

He admitted he was ‘not surprised’ to hear reports of scam syndicates in his residential complex. What did surprise him was the fact that ‘more and more people are moving’ to Forest City.

One of the reasons he chose the area was its quietness and peace, he said. But he is pleased to see the area developing from a ‘ghost town’ into a place where people actually seem to want to live.

‘Many people have lost money on these projects,’ he said. ‘But in the last three months, you can see lights coming on in the condominiums. From previously one unit occupied out of 20, now it might be one in five.’