At the Senate hearing, Zhao Long, a Chinese national revealed to be one of the heads of the Lucky South 99 cyber fraud park, also serves as the head of the "Chinese Association in Cebu" in Lablab City, Cebu Province, which has been donating computers to the city government since 2019.
Winston Casio, spokesperson for the Presidential Anti-Organized Crime Committee, confirmed at the joint hearing of the Senate Committees on Women, Children, Family Relations and Gender Equality, and Migrant Workers, Public Order, and Dangerous Drugs that Zhao Long owns and operates the Lucky South 99 cyber fraud park.
Rappler reviewed documents from the Securities and Exchange Commission belonging to Zhao's enterprises, revealing that he has been the chairman and president of the "Chinese Association in Cebu" in Lablab City since 2019.
The association's charter shows it was established on August 16, 2019. Recall that Lucky South 99 was established in July 2019, just one month apart.
The founders of the association include Zhao Long's father Zhao Shouqi, Chinese nationals Lin Yingpin, Wang Yangbao, Chang Yunyun, and Filipino citizen Wilson Xian dos Tsai (all names transliterated).
Zhao Shouqi was appointed as the treasurer of the association.
Interestingly, the purpose of this Cebu-based Chinese association is to "promote the Philippines as a tourist destination to the Chinese market." This is exactly what the association's charter stipulates.
However, the authorities do not believe this.
The Presidential Anti-Organized Crime Committee showed a video at the Senate hearing stating: "These companies are suspected of acting as fronts, covering up the scam activities taking place at these locations."
"Royal Cebu KTV Company" in "Cebu" represents Cebu Province.
On September 2, Lablab City Mayor Junard “Ahong” Chan shut down the controversial Tourist Garden Hotel, of which KTV is just one of many businesses. On August 31, 169 foreigners operating a scam center in the hotel complex were arrested, leading to its closure.
The testimonies of rescued Indonesians and a "manager" indicate that more than 100 trafficked workers were moved to the hotel complex on June 4, months after an operation at the Lucky South 99 park in Bonbonaya Province, Polak.
However, this KTV has been maliciously used as a place to buy women and take them out for lewd activities.
The District Court of Lablab City Branch 73 detailed in its 2023 ruling the entrapment operation conducted by the NBI in the KTV lounge.
On August 2, 2019, NBI agents infiltrated the Royal Cebu KTV. There, Chinese nationals Zeng Dan and Quan Yiqing (names transliterated) offered nine Chinese women to the undercover agents, who could "take them away" for 30,000 pesos each.
Zeng and Quan were arrested on the spot. The court convicted Zeng and Quan of attempted trafficking and sentenced them to 15 years in prison and a fine of one million pesos.
In this operation, at least 34 Chinese women were rescued. At the Senate hearing, officials from the Presidential Anti-Organized Crime Committee revealed that these women were lured from China with legitimate job opportunities provided by the online gambling parks but were then forced into sex work.
Mayor Chan of Lablab City told reporters at a press conference on September 2: "At that time, the incident occurred in the KTV bar. It has been closed, but they have started operating again because I think the case was dismissed."
On August 6, 2019, Mayor Chan appeared at the hotel where KTV is located. At that time, he personally conducted an inspection, and there was no reason to close the business even though trafficking activities were taking place on site.
According to the mayor's office, Royal Number One KTV obtained a business license on February 26, 2020. The business license posted near the KTV counter on the wall shows that they can renew their business license until May 27, 2024.
The mayor confirmed at the press conference on September 2 that the city conducted a thorough inspection of the hotel and found no abnormalities.
Therefore, when he closes the hotel's KTV and other businesses in September 2024, it is justified because "illegal activities were conducted there."
Mayor Chan said at the press conference: "The licenses they obtained from (the city) were used for these illegal activities."
According to a sworn statement by a manager, the operating base of the association—the Tourist Garden Hotel—began accommodating more than 100 trafficked foreigners from Lucky South 99 on August 2, 2024.
Casio told Rappler on September 20: "When we checked the Tourist Garden Hotel, it was still on booking sites... but when we checked again, there were no rooms available because all the rooms were used by the staff of the online gambling."
According to the spokesperson for the Presidential Anti-Organized Crime Committee, the preferred mode of operation for online gambling is now "decentralization," spreading to various provinces to reduce suspicion from residents and authorities.
He explained that these parks are able to "hide in plain sight" because they feel unpunished.
According to the mayor, from 2019 to 2024, the association, its affiliated enterprises, and the hotel regularly paid taxes to the city government. Deleted social media posts show that the association continuously donated computer equipment to the Lablab City government from 2019 to 2020.
Casio said: "I am willing to believe they became complacent because they felt they could bribe almost anyone in the Philippines... Without public corruption, organized crime could never thrive in the Philippines."
Although "small units" continue to disperse to various provinces, the PAOCC spokesperson told Rappler that they have begun "catching big fish."
On the evening of September 19, Chinese businessman Yang Jianxin, also known as Tony Yang, was arrested when he landed in Manila from Gaya Yen Lirio. Yang Jianxin was arrested under a mission order against unwanted aliens.
He is the brother of Yang Hongming, the former economic advisor to President Duterte.
At the congressional hearing on Thursday, Dan Fernandez, a representative from Xiantanrosa City, Inner Lake Province, stated that Yang Jianxin owns Golden Citi Development Incorporated, which also owns the Yang Building in Gaya Yen Lirio, where an online gambling center called Oroone Incorporated is located.
Gaya Yen Lirio city police confirmed at the hearing that Oroone Inc. had already closed its business in July 2023 before the police arrived.
