China-linked scam networks are stealing billions of dollars from American families and pose a growing national security threat, influential U.S. senators warned this week, as lawmakers pushed bipartisan legislation aimed at cracking down on fraud tied to cryptocurrency, human trafficking, and overseas scam compounds.
Speaking at a hearing of the Senate Aging Committee, Chairman Rick Scott said the scale and sophistication of scams targeting Americans—particularly seniors—has reached crisis levels. He described the financial and emotional toll on victims as devastating, warning that criminal networks operating overseas are draining life savings built over decades.
Calling the issue a national security concern, Scott alleged that Beijing has allowed criminal infrastructure linked to scams to flourish.
“Communist China is the epicenter of the global scam industry that drains American savings and destabilizes families,” Scott said during the hearing.
Seniors lose billions as scams grow more sophisticated
Scott cited data from the Federal Bureau of Investigation showing that older Americans lost more than $4.8 billion to fraud in 2024, calling the losses “staggering.” He said many victims are retirees whose financial security has been destroyed by organized criminal networks operating abroad.
“These are people who did everything right,” Scott said. “They worked hard, saved responsibly, and then had their lives upended by monsters operating criminal networks overseas.”
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According to the Senate committee’s report, Age of Fraud, the crimes are not isolated incidents carried out by lone actors. Instead, lawmakers say they are part of highly organized, transnational enterprises that exploit new technologies, digital payments, and cryptocurrency to move stolen funds quickly and evade law enforcement.
Scott claimed that many of these operations are “directed or enabled by the Chinese Communist Party,” an allegation that underscores the geopolitical sensitivity surrounding the issue.
Scam compounds and forced labor abroad
Lawmakers and witnesses said the scam networks rely heavily on China-linked digital platforms and payment channels and operate large-scale scam compounds in Myanmar, Cambodia, Laos, and other parts of Southeast Asia.
Scott said many of these facilities are staffed by trafficked workers who are forced to carry out scams under coercion, targeting victims in the United States and other Western countries. These scams often involve romance fraud, investment schemes, impersonation of government officials, or urgent financial threats designed to pressure victims into rapid decisions.
Ranking Member Kirsten Gillibrand said China-linked scams have become more sophisticated due to the emergence of centralized scam centers, advances in technology, and the increasing use of cryptocurrency.
She cited the case of a senior citizen in Jefferson County, New York, who was persuaded through a romance scam to withdraw most of his retirement savings and transfer the funds into cryptocurrency.
“That is a loss that stings,” Gillibrand said. “It can derail retirement plans, pull apart families, and subject seniors to emotional and material harm.”
Shame and fear prevent victims from reporting crimes
Gillibrand noted that many scam victims struggle to report their experiences due to stigma, shame, or fear, allowing criminals to continue operating with little resistance. Some communities face additional barriers, including language challenges or concerns about interacting with authorities.
She said Asian immigrant communities, including Chinese Americans, can be particularly vulnerable because scammers exploit shared language, cultural familiarity, and family ties to China to build trust.
“This makes these crimes even harder to detect and stop,” Gillibrand said.
Bipartisan push for tougher laws
In response to the growing threat, Scott and Gillibrand—along with Senators Ashley Moody and Mark Kelly—have introduced the National Strategy for Combating Scams Act, which would require a coordinated, government-wide approach to fighting fraud.
Scott also highlighted the Scam Compound Accountability and Mobilisation (SCAM) Act, which passed the Senate last month. The legislation would grant the U.S. Treasury Department expanded authority to sanction scam compounds and the criminal networks behind them.
Lawmakers are also pushing the GUARD Act, which would strengthen penalties against criminals who target older Americans and expand tools available to law enforcement agencies. Scott described all three measures as bipartisan and “common sense.”
Experts warn of broader strategic threat
Witnesses at the hearing emphasized that China-linked scam networks represent more than a financial crime problem. Nathan Picarsic of the Foundation for Defense of Democracies said scams targeting seniors are part of a broader strategic challenge.
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“Social cohesion is a pivotal battleground,” Picarsic said, arguing that large-scale fraud undermines trust, destabilizes families, and weakens communities.
He said China-linked criminal networks are “permitted and at times abetted by the Chinese state,” benefiting from advanced technology and a globalized banking system that makes stolen funds difficult to trace or recover.
Loss estimates far higher than previously reported
Kathy Stokes, director of fraud prevention programs at AARP, described fraud as a national crisis. She said the Federal Trade Commission initially reported $12.8 billion stolen in 2024, but later revised the estimate to $196 billion, including $81 billion from seniors.
Stokes said many victims face an additional burden after losing their savings: large tax bills on money that was stolen.
“They’re being revictimized by the federal government,” she said, urging lawmakers to consider tax relief for scam victims.
Cryptocurrency and AI fuel rapid expansion
Jacqueline Burns Koven of blockchain analytics firm Chainalysis told senators that cryptocurrency scams are expanding rapidly. She said 2025 was a record year, with an estimated $17 billion stolen through crypto-related scams.
Koven said Chinese scam groups are global leaders in the space because they combine cryptocurrency with artificial intelligence and automation, allowing operations to scale quickly and target thousands of victims simultaneously.
A Government Accountability Office official added that the federal response remains fragmented. Seto Bagdoyan said there is no unified government-wide strategy or even a common definition of scams, limiting enforcement and accountability.
As China-linked scams continue to evolve alongside digital payments, social media, and online investment platforms, lawmakers warned that without swift action, millions more Americans—especially seniors—remain at risk of losing their savings to increasingly sophisticated criminal networks.