H.R. 5490 — Dismantle Foreign Scam Syndicates Act

This section states congressional findings concerning "pig butchering" cryptocurrency investment scams operated by Chinese criminal organizations using forced labor in scam centers across Burma, Laos, and Cambodia, which caused at least $10 billion in losses to Americans in 2024 (up 33% year-over-year) amid global annual losses exceeding $60 billion.

This section establishes as the policy of the United States to comprehensively combat transnational organized criminals operating human trafficking compounds primarily in Southeast Asia to perpetrate large-scale online scams against the American people.

This section establishes an interagency Task Force, chaired by the Secretary of State, to lead a whole-of-government effort to dismantle transnational criminal syndicates operating large-scale online scam compounds (i.e., scam centers fueled by forced labor of human trafficking victims) that target Americans. The Task Force, comprising heads or designees from specified components of the Departments of State, Justice, Homeland Security, and Treasury—plus authorized members from the Securities and Exchange Commission, Federal Trade Commission, Federal Communications Commission, and others determined by the President—must (1) develop and submit to congressional committees a comprehensive strategy within 180 days of enactment to shut down such centers, prevent their proliferation, disrupt involved criminal entities and traffickers, and hold enablers accountable; and (2) coordinate and oversee strategy implementation. The Task Force must facilitate full interagency information sharing, receive intelligence community support, consult quarterly with state and local law enforcement and scam-recovery stakeholders (including on "pig butchering" scams and crypto asset recovery), regularly with anti-trafficking and anti-corruption NGOs, and partner with private sector entities (e.g., banks, social media platforms, cryptocurrency exchanges); it terminates seven years after enactment.

This section requires the comprehensive strategy mandated by section 1(b)(1) to incorporate 13 specified objectives for combating online scam operations, including (1) pressuring complicit foreign governments in coordination with allies; (2) investigating the People's Republic of China's involvement; (3) investigating the Burmese military's involvement; (4) responding to PRC complicity; (5) reducing transnational criminal organizations' power; (6) building foreign partners' capacity to disrupt scam centers; (7) building partners' capacity to combat trafficking into scam centers; (8) imposing sanctions on perpetrators and enablers; (9) advocating for Financial Action Task Force greylisting or blacklisting of involved countries; (10) harnessing offensive cyber capabilities; (11) recovering stolen U.S. assets; (12) integrating data across U.S. agencies and assessing Fusion Centers; and (13) convening a coalition of allies. This section further directs the Task Force to develop measurable indicators of the strategy's success (i.e., under section 1731(b)(1)), such as persons sanctioned, arrest warrants or indictments issued, arrests made, U.S. losses mitigated, trafficking victims rescued, and scam centers reduced compared to the previous year.

This section requires the Task Force to submit to the appropriate congressional committees, not later than 360 days after submission of the strategy required by section 1(b)(1) and annually thereafter for five years, an unclassified report (with a possible classified annex) on the previous year's online financial scams against U.S. nationals. The report must include (1) a list of all foreign persons sanctioned by the United States for responsibility in such scams; (2) an assessment of their ongoing involvement in scam centers, including entities in the People's Republic of China aiding them; (3) an estimate of funds stolen from U.S. nationals as a percentage of the global total; (4) an estimate of intercepted, seized, or returned funds; (5) an estimate of trafficking victims employed in scam centers; (6) an estimate of total personnel involved in operating or supporting scam centers; (7) a list of known scam centers; (8) a description of their global proliferation; (9) recommendations for Department of State programs to implement the strategy under section 1(b)(1)(c), including required appropriations; and (10) other appropriate measures. This section further requires the Task Force to consult regularly with the committees on strategy implementation, including updates, consultations with local law enforcement and civil society, incorporated recommendations, and suggestions for enhancing capabilities to shut down scam centers, dismantle organizations, and recover U.S. assets (e.g., via briefings).

This section directs the President, not later than 180 days after enactment, to determine whether each of 44 specified foreign persons—30 named individuals and 13 named entities, plus any others determined responsible for, complicit in, or directing online financial scams against U.S. nationals from Southeast Asia compounds using trafficked victims—meets criteria for sanctions under the Global Magnitsky Human Rights Accountability Act (22 U.S.C. 10101 et seq.), section 111 of the Trafficking Victims Protection Act of 2000 (22 U.S.C. 7108), or Executive Order No. 13581 (transnational criminal organizations); impose applicable sanctions on those that do; and report to the appropriate congressional committees a list of sanctioned persons and justifications for any not sanctioned. (As background, the Trafficking Victims Protection Act of 2000 combats trafficking in persons, a modern form of slavery primarily affecting women and children through sex trade, forced labor, and related exploitation.) It further authorizes the President to waive sanctions for such persons 15 days after notifying Congress of a determination that the waiver is vital to U.S. national security interests and provides that no trafficking victim is subject to sanctions.

This section authorizes the Secretary of State to carry out programs, using funds authorized by section 6 and in accordance with current law (22 U.S.C. 7105(a)), to provide trauma-informed care, shelter, reintegration, and support services to victims of human trafficking within online scam centers. The Interagency Task Force to Monitor and Combat Trafficking in Persons shall ensure such programs are designed and implemented to prevent revictimization and to gather information and evidence critical to understanding online scam center operations and prosecuting scammers. (As background, 22 U.S.C. 7105(a) authorizes the Secretary of State and USAID to assist victims of trafficking in foreign countries with integration, reintegration, or resettlement.)

This section authorizes appropriations of $30 million for the Department of State for each of FY2026 and FY2027 to develop, coordinate, and implement the strategy required by section 1(b)(1).

This section defines, for purposes of this Act, (1) "appropriate committees of Congress" as the House Committee on Foreign Affairs and the Senate Committee on Foreign Relations; and (2) "intelligence community" as having the meaning given that term in 50 U.S.C. 3003 (i.e., the 18 specified executive branch entities led by the Director of National Intelligence that conduct intelligence activities).