A seaside hotel and former bank offices on the Isle of Man have been used by scammers to defraud victims in China of millions of dollars, a BBC World Service investigation has revealed.

The dining room and lounge of the Seaview Hotel in Douglas were packed, we were told, with dozens of Chinese workers on computers hooked up to high-speed broadband. A special wok had also been brought into the hotel kitchen.

The scam, which according to Chinese court documents took place between January 2022 and January 2023, used a method known as “pig slaughter.” It is so called because the process of “fattening the pig” — gaining the victim’s trust — is vital to its success.

The BBC spent almost a year investigating how the investment fraud was carried out from the island, which is a British Crown Dependency with an independent government.

Other details also came to light, including bosses’ grand ambitions to build a state-of-the-art office complex overlooking the Irish Sea.

In addition to obtaining court documents, we also reviewed leaked documents and spoke with company insiders.

One former staff member, Jordan (not his real name), told us he had no idea of ​​the dark world he was entering when he arrived on the Isle of Man, but said he was relieved to have found a stable administrative job.

However, he did notice that his new employer seemed rather secretive – for example, he and his colleagues were not allowed to take photos at company events. What he says he didn’t realize was that many of his Chinese colleagues were actually scammers.

In late 2021, nearly 100 people were relocated to the Isle of Man to work for a company referred to in Chinese court documents as “MIC.” They came from the Philippines, where they had worked for another scam company. The BBC has learned that MIC stands for Manx Internet Commerce.

In the Isle of Man, MIC was part of a group of associated companies, all with the same owner.

An online casino, run by King Gaming Ltd, was the most prominent. Gambling is illegal in mainland China. By setting up shop halfway around the world, the group’s founders could target Chinese customers, but also take advantage of the Isle of Man’s low gambling taxes.

A few months after being stationed at the Seaview Hotel in Douglas, the MIC staff were transferred to former bank offices on the east side of town.

And this is where Jordan says he heard sporadic cheers from his new colleagues – who worked in groups of four. He now believes they were celebrating moments when they had successfully defrauded another victim, some 5,000 miles away.

Six people who worked for MIC in Douglas were convicted of committing investment fraud against Chinese citizens upon their return to China.

The cases, which were heard in late 2023, detail the illicit flow of money. According to Chinese court documents, victims were lured by the suspects and their accomplices from bases in the Isle of Man and the Philippines.

They say the suspects allegedly worked in teams to lure Chinese investors into chat groups on QQ, a popular Chinese instant messaging service similar to WhatsApp. One scammer would play the role of an investment “teacher,” while others would pose as fellow investors.

The BBC has seen evidence – including court documents – that many of those who arrived in Douglas from the Philippines were involved in the scam. They all used the same computer equipment, relied on QQ for their work and, with the exception of a few managers, all had the same job titles.

The fake investors created an atmosphere of excitement and enthusiasm around the money-making skills of the “teacher,” who then told the victim to invest money in a certain investment platform, the Chinese court ruled.

Blinded by the hype, victims complied, but their money was then siphoned off by the scammers, who actually controlled the platforms and could manipulate them behind the scenes.

According to the Chinese court, it is difficult to verify the total losses of the victims, but 38.87 million renminbi (£4.17 million/$5.3 million) was stolen from at least 12 victims.

The court found the six suspects guilty based on evidence including the suspects’ own confessions, travel and financial records, and chat logs.

According to court documents, this was not only a profitable scam but also a sophisticated one, requiring frontline teams to apply the techniques of “pig slaughter” with conviction and skill.

The BBC has discovered the identity of the sole beneficiary of the companies, whose name was hidden behind layers of administrative paperwork.

MIC and its affiliated companies were all managed by a trust set up by a person named “Bill Morgan,” who, documents show, was also known as Liang Lingfei. Employees called him “Boss Liang,” Jordan says.

The Chinese court documents refer to a man named Liang Lingfei as a co-founder of the Isle of Man-based MIC – which was described as “a reasonably stable criminal organisation set up to carry out fraudulent activities”. Mr Liang was not among those prosecuted or represented at the hearings.

The court heard that Mr Liang was also a co-founder of the fraud ring in the Philippines. The BBC has seen evidence that many MIC employees worked there before being transferred to the Isle of Man.

Our investigation also revealed that Mr Liang has obtained an Isle of Man investment visa and has attended several corporate events on the island. His wife also owns a home in the town of Ballasalla, close to the island’s airport.

The Isle of Man group of companies was ambitious, signing a planning agreement late last year for a gleaming “parkland campus” headquarters on the site of a former naval training base. A spokesman for the developers described it as the “largest private investment on the Isle of Man”.

Architects’ renderings show office buildings on a hill above the coast in Douglas, which would have included penthouse apartments, a spa, multiple bars and a karaoke lounge.

The campus would be used by MIC staff and employees of MIC’s “affiliated” companies, including those involved in online gambling, the planning documents state.

According to conservative estimates, the global annual turnover of the pig slaughter industry exceeds $60 billion (£46.5 billion).

“This is the first case we see of this kind of (pig slaughter) fraud in a Western country,” said Masood Karimipour, a UN expert on organised crime who normally focuses on Southeast Asia.

He says stopping these scams is like playing a game of whack-a-mole and is a battle that “organized crime is currently winning,” as criminals engage in what he calls “jurisdiction shopping,” thinking there are legal loopholes and little oversight.

All ambitions that the group of companies had on the Isle of Man, rightly or wrongly, seem to have come to an end.

In April, police raided the former bank offices. They also targeted an address next to the island’s courthouse – using a ladder to enter through a first-floor window in the early hours of the morning.

In a statement released shortly afterwards, police said the raids were linked to a wider fraud and money laundering investigation involving King Gaming Ltd IOM. Seven people had been arrested and released on bail, they added.

Since then, three more people have reportedly been arrested.

Earlier this month, receivers were appointed for the companies in the group, including MIC and King Gaming Ltd IOM, at the request of the Isle of Man Attorney General.

The island’s gambling regulator has revoked the licenses of gambling companies affiliated with MIC.

The park-like campus location was cleared of trees and signs were installed, but redevelopment is now on hold indefinitely.

The BBC has made repeated attempts to contact the companies involved, as well as Bill Morgan/Liang Langfei and the directors of the companies, through various communication channels, but has not received any response.

We also tried to contact the Seaview Hotel but did not receive a response. However, there is no indication that anyone there was aware of any illegal activity taking place on the premises.

You can reach the Global China Unit directly and securely via the encrypted messaging app Signal at: +447769939386 or by email at [email protected]