The Myanmar military says it has captured one of the most notorious scam compounds on the border with Thailand, as it reclaims key territory it lost in the ongoing civil war.

KK Park, south of the border town of Myawaddy, has been synonymous with online fraud, money laundering and human trafficking for the past five years.

Thousands of people were lured to the compound with the promise of well-paid jobs, and then forced to run elaborate scams, stealing billions of dollars from victims all over the world.

The military, long tainted by its links to the scam business, now says it has taken the complex as it expands control around Myawaddy, the main trade link to Thailand.

In recent weeks the military, or junta, has pushed back insurgents in several parts of Myanmar, aiming to maximise the number of places where it can hold a planned election, starting in December.

It still doesn't control large swathes of the country, which has been torn apart by conflict since a military coup in February 2021. The election has been dismissed as a sham by opposition forces who have vowed to block it in areas they hold.

KK Park began with a lease agreement in early 2020 to build an industrial park between the Karen National Union (KNU), the ethnic insurgent group which controls much of this region, and a little-known Hong Kong listed company, Huanya International.

Researchers believe there are links between Huanya and a prominent Chinese underworld figure Wan Kuok Koi, better known as Broken Tooth, who has since invested in other scam centres on the border.

The complex expanded rapidly, and is easily visible from the Thai side of the border.

Those who managed to escape from it describe a brutal regime imposed on the thousands of people, many from African countries, who were held there, forced to work long hours, with torture and beatings inflicted on those who failed to meet targets.

A statement by the junta's information ministry said its forces had "cleared" KK Park, releasing more than 2,000 workers there and confiscating 30 of Elon Musk's Starlink satellite terminals – widely used by scam centres on the Thai-Myanmar border for online activities.

The statement blamed what it called the "terrorist" Karen National Union and volunteer people's defence forces, which have been fighting the junta since the coup, for illegally occupying the area.

The junta's claim to have shut down this infamous scam centre is almost certainly directed at its main patron, China. Beijing has been pressing the junta and the Thai government to do more to end the illegal businesses run by Chinese syndicates on their border.

Earlier this year thousands of Chinese workers were taken out of scam compounds and flown on chartered planes back to China, after Thailand cut access to power and fuel supplies.

But KK Park is only one of at least 30 similar compounds located on the border. Most of these are under the protection of Karen militia groups allied to the junta, and most are still operating, with tens of thousands of people running scams inside them.

In fact, the support of these militia groups has been crucial in helping the military drive back the KNU and other resistance groups from territory they captured over the past two years.

The military now controls nearly all of the road linking Myawaddy to the rest of Myanmar, a goal the junta set itself before it holds the first stage of the election in December.

It has taken Lay Kay Kaw, a new town established for the KNU with Japanese funding in 2015, a time when there had been hopes for lasting peace in Karen State following a national ceasefire.

That is a more significant blow to the KNU than the takeover of KK Park, from which it did get some revenue, but where most of the financial benefits went to pro-junta militias.

A well-placed source has told the BBC that scam work is continuing in KK Park, and that it is likely the military took control of only part of the sprawling complex.

The source also believes Beijing is giving the Myanmar military lists of Chinese individuals it wants taken from the scam compounds, and sent back to face trial in China, which may explain why KK Park was attacked.