Thai Police acting on the PM’s orders, launched a major crackdown in Phuket, arresting 98 foreigners and 37 Thais. The unprecedented action, ‘Operation Nominee Sweep,’ led by the Central Investigation Bureau (CIB), seized assets worth ฿1.5 billion, dismantling an extensive network of Russian business concerns.
Thai Police on Friday launched a massive crackdown which smashed an extensive network of foreign business concerns in Phuket. At length, 98 foreigners were arrested as well as 37 Thai nationals. All were taken to Bangkok for processing and later granted bail. At the same time, hundreds of properties and bank accounts were seized. In short, ฿1.5 billion in assets were appropriated by officials. The unprecedented crackdown was led by the Central Investigation Bureau (CIB) and was themed ‘Operation Nominee Sweep’.
Thai police on Friday arrested hundreds of foreigners in Phuket and transported them for questioning by investigators to Bangkok. ‘Operation Nominee Sweep’ was later unveiled by Central Investigation Bureau (CIB) chief Police General Jiraphat Phuridet.
The massive police operation was led by the Economic Crime Suppression Division (ECSD) and its chief Police Major General Phutthidet Boonkraphue.
Massive police crackdown in Phuket will consequently lead to smaller foreign business investors being circumspect about the legality of business investments
The extent of this massive police operation was notable. In brief, it focused on suspect business activities linked with Russian firms in Phuket.
Certainly, the police crackdown is set to cause reverberations. In particular, among prospective foreign nationals thinking of establishing small-scale business ventures in Thailand.
Indeed, the wide-ranging charges levelled against those arrested are significant. The charges include ‘doing business without complying with the law’ on one hand. On the other, those involved are charged with ‘aiding, abetting or participating in business with foreigners.’
Certainly, the background to this massive police crackdown is clear.
The influx of Russian small-scale investors and business operators into Phuket since the Russo-Ukrainian war began in February 2022.
Phuket has become quite a hostile environment for small business investors due to massive disruption caused since 2022 by tens of thousands of Russians
In brief, local business operators and residents in Phuket have recently complained to Prime Minister Srettha Thavisin. At the same time, the operations can be seen in the light of rising antagonism against illegal activity linked with foreigners on the holiday island.
Afterwards, the acting National Police Commissioner Police General Kittirat Phanphet gave the green light to the operation.
Undoubtedly, in the course of a briefing by Police General Jiraphat on Friday, the scale of the nominee activities in Phuket became clear.
A key individual identified by police investigators was a 45-year-old Russian woman identified as Ms Ilana. In summary, Ms Ilana was found to be a director and shareholder in no less than 272 firms.
Two women at the centre of Friday’s complex web of seizures valued at ฿1.5 billion. A Russian woman and Thai woman appeared to be working in partnership
The Russian woman worked closely with a Thai woman identified as Ms Treethip.
In short, the Thai woman established an accountancy and legal firm in June 2016. In the interim, it has flourished and employed up to 22 people.
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Investigators on Friday revealed that Ms Treethip was paid between ฿30,000 to ฿50,000 per firm.
In brief, she provided nominee Thai shareholders and directors for Ms Ilana. Furthermore, police revealed that most of these nominees were family relatives or close friends of Ms Treethip.
In addition, Ms Ilana herself was an executive, director, and shareholder of nine different firms.
Seven of these were property holding concerns while one was a service company and the other was involved with foreign tourism.
The companies had a combined share capital of ฿38 million.
Russian woman’s firms controlled ฿900 million in real estate including 176 distinct assets. In addition, she ran service and tourism firms in her network
Significantly, the firms controlled three luxury residential and apartment developments in Phuket. In total, there were 176 distinct assets valued at ฿900 million or $24.45 million. At the same time, Ms Treethip provided nominee services for these firms.
Notably, among today’s revelations was the existence of 142 wholly-owned Thai companies.
Police revealed that these entities were used to provide B-class employment visas to foreigners in Phuket. Unlike foreign-owned companies, Thai companies are not as carefully monitored.
Thai labour law requires a ratio of one foreign worker to at least four Thai workers. In particular, foreigners with a B-class visa may obtain work permits.
Wholly owned Thai firms registered for the purposes of obtaining B-class visas and work permits for foreigners, many of them Russian including fraudsters
Among the items seized on Friday were 108 work permits along with 196 passports.
At the same time, police revealed that there were criminal complaints relating to five foreigners working for such firms. For instance, a number of Thai investors reported having been duped by online scams.
On Friday, no less than 98 foreign nationals were arrested.
All were granted bail having formally acknowledged the criminal charges against them, similarly with 37 Thai nationals.
Furthermore, Friday’s legal action saw legal action against 96 firms, involving asset seizures and the suspension of bank accounts.
The seizures relate to 225 bank accounts with ฿319 million in circulation. In addition, 245 land documents were taken by police.
In short, they relate to 96 condominium units valued at ฿1 billion. At the same time, 43 title deeds covering 24 rai of land valued at ฿200 million were seized by officials.
Hammer blow to Russian interests in Phuket
Undoubtedly, Friday represented a significant blow to nascent Russian business concerns in Phuket.
Police revealed that in total, 800 companies were involved with 1,600 company stamps. The value of assets frozen was ฿1.5 billion.
Certainly, the scale of these activities has seen Russian-sponsored businesses forming a large proportion of new companies established in Phuket over the last two years.
Consequently, officials had previously become aware of the problem.
However, it is being reported that public disquiet prompted action from authorities. In addition to Russian-owned and controlled businesses operating in closed loops, the demand caused by Russian investors has caused property prices in Phuket to surge beyond the reach of locals.
CIB chief revealed the resources involved were linked to bringing Russian tourists to Phuket and accommodating them in a closed loop denying Thai firms
On Friday, General Jiraphat revealed that foreign tourism concerns were also included in today’s crackdown.
In effect, Russian-owned tourism concerns operated and controlled a lucrative trade of bringing foreign tourists to Phuket.
The top police commander said the scale of this activity was vast. No less than 59,717 Russians have moved to Phuket since February 2022.
Afterwards, this influx led to an average of 1,603 firms linked with Russian nationals being formed annually.
Friday’s huge crackdown involved raids on properties and business ventures throughout Phuket.
In particular, this included accountancy and legal service practitioners such as the firm operated by Ms Treethip.
Further developments anticipated after Friday’s seizures
Afterwards, police seized an extensive amount of documents and intelligence. Enquiries will likely to yield further leads as the Economic Crime Suppression Division (ECSD) campaign continues.
Meanwhile, on a wider level, today’s crackdown may also lead to questions being asked about Thailand’s Foreign Business Act and other strict regulations.
Coming at a time of declining investments and capital flow into the kingdom, there has been talk of a more liberal regime.
Certainly, today’s extensive police operation will cause many small-scale foreign investors or business people to think twice before operating under what, for the last two decades, had become a rampant practice or ‘grey area’ aided and abetted by corruption.
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Further reading:
Rabid Russian assaults police team in Phuket after going berserk at a city centre hotel on Tuesday
Swiss man Uli Fehr’s hellish Thai nightmare as he is detained and branded as a threat to society
Russian mafia gang extort young Russian couple out of $50k at a local coffee shop on Ko Samui
Russian faces counterfeit charges after gifting toy money to bar staff while also paying in baht
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