Busting the Hard Boiled

When military police were ordered to raid a Phnom Penh office suspected of harboring an illegal phone scam last Tuesday, officers figured it was probably just another instance of small-scale Cambodian corruption. But what they found was pricey, high-tech telecommunications equipment—and evidence that boiler-room scams may have spread to Cambodia under the guise of supposedly charitable nongovernmental organizations (NGOs). Police detained 20 foreigners in the raid, including 14 Britons, who remain under guard in a Phnom Penh hotel. According to officials, the group allegedly set up an illegal telephone network and had made nearly $30,000 worth of essentially free international calls over the Internet since June 27. Police believe the group was contacting gullible investors overseas to pump bogus savings schemes and worthless stocks. Such scams have long plagued the country's Southeast Asian neighbors, but Cambodia may have an added attraction: its loosely regulated NGOs. The detained foreigners are suspected of using as cover the Cambodian Rehabilitation and Development Program (CRDP). According to the government, CRDP was registered in February 1999 as a legal NGO, but officials say they have no knowledge of any legitimate activities by the group. Police say the foreigners are denying any wrongdoing and claim they were employed by CRDP, some as volunteers and some for pay. NGOs operate outside the government, but this group may be operating outside the law.