US Sanctions Cambodian Senator Ly Yong Phat for Operating Crypto Scam Centers Exploiting Trafficked Workers
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on Cambodian businessman and senator, Ly Yong Phat, for his involvement in operating cyber-scam centers that exploited trafficked workers. These centers, run by Phat and his conglomerate L.Y.P. Group, were involved in widespread human rights violations, forcing trafficked individuals into fraudulent cryptocurrency schemes.
According to a press release dated September 12, Phat’s operations were linked to scams that enticed victims into investing in fake cryptocurrency and foreign exchange schemes, often leading to significant financial losses. Reports from the Financial Crimes Enforcement Network (FinCEN) and the FBI’s Internet Crime Complaint Center noted a surge in investment fraud, particularly in the crypto space. In 2023 alone, losses from cryptocurrency investment fraud reached $3.96 billion, with many of these schemes traced back to criminal networks in Southeast Asia, including those linked to Phat’s operations, such as the O-Smach Resort.
The OFAC highlighted that many of the individuals running these scams were, in fact, victims of human trafficking. Lured by false job promises, they were brought to locations like the O-Smach Resort, where their phones and passports were confiscated, making escape nearly impossible. These trafficked workers were then coerced into managing online scams, often enduring severe physical and psychological abuse, including beatings, electric shocks, and threats of being sold into further exploitative situations.
Authorities have managed to rescue trafficked victims from several countries, including China, India, Indonesia, Malaysia, Singapore, Thailand, and Vietnam. As part of the sanctions, Ly Yong Phat and his associated businesses have been frozen out of the U.S. financial system, with U.S. citizens prohibited from conducting any transactions with them. Any business owned 50% or more by Phat or his affiliates is also subject to these restrictions, with severe penalties for violations.
This case is part of a broader trend of cyber-scam networks operating in Southeast Asia. A 2023 investigation by journalist Zeke Faux revealed similar operations run by Chinese criminal gangs in Cambodia and Myanmar. Additionally, the Indian Embassy in Laos recently rescued 14 Indian nationals who had been trafficked and forced into crypto scams in the Golden Triangle Special Economic Zone. The FBI has warned that criminals often use fake job advertisements on social media, promising roles in tech support, call centers, or beauty salons, to lure unsuspecting victims into these criminal operations.
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