US sanctions Cambodian tycoon for alleged human trafficking to cyber scam centers

A Cambodian tycoon serving as a close advisor to the country’s prime minister was sanctioned by U.S. officials on Thursday for his alleged role in trafficking people into forced labor at online scam centers. 

The Treasury Department announced sanctions on Ly Yong Phat — a powerful billionaire, senator and personal advisor to Cambodian Prime Minister Hun Manet — and his conglomerate L.Y.P. Group Co. after years of reports tying the business magnate to human rights abuses and other offenses. 

“Today’s action underscores our commitment to hold accountable those involved in human trafficking and other abuses, while also disrupting their ability to operate investment fraud schemes that target countless unsuspecting individuals, including Americans,” said acting Undersecretary of the Treasury for Terrorism and Financial Intelligence Bradley Smith.

Last year, the New York Times reported that hundreds of people had been rescued from cyber scam compounds operating on land or in buildings owned by Yong Phat.

The story specifically focused on the O‑Smach Resort, where dozens of people who were trafficked said they were forced to work under threat of violence. 

The U.S. sanctions name Yong Phat’s O‑Smach Resort as a key player in “serious human rights abuse related to the treatment of trafficked workers subjected to forced labor in online scam centers.”

The sanctions included Garden City Hotel, Koh Kong Resort and Phnom Penh Hotel — all of which are owned by Yong Phat. 

Southeast Asian countries like Myanmar and Cambodia have become havens for these compounds, where foreign workers from India, China, Thailand and other countries are duped or forced into traveling to for work, only to arrive and be held against their will. 

The workers are forced to conduct activities that range from romance scams to cryptocurrency schemes aimed at siphoning money from people in the U.S., Europe and China. 

The Treasury Department cited a June report from the State Department that highlighted abuses in Cambodia, particularly in the Koh Kong province towns of O’Smach and Ko Kong which are largely controlled by Yong Phat and his businesses. Yong Phat is known locally as the “King of Koh Kong” — a large province on the border with Thailand. 

The State Department report and the New York Times investigation showed that attempts by senior police officials in Thailand and China to stop the human trafficking of their citizens and others were stymied by Cambodian officials who either tipped off the people running the compounds or led investigators to dead ends. 

The Treasury Department said “ongoing corruption and official complicity in trafficking crimes remained widespread and endemic, resulting in selective and often politically motivated enforcement of laws, inhibiting effective law enforcement action against trafficking crimes, including forced labor in online scam operations.” 

“Traffickers force victims to work up to 15 hours a day and, in some cases, ‘resell’ victims to other scam operations or subject them to sex trafficking,” they noted. 

O-Smach human rights abuses

Yong Phat’s O-Smach Resort has been investigated by police for two years and investigators have found “serious human rights abuses” — with victims reporting being lured there with fake employment opportunities before having their phones and passports stolen. 

People were beaten, abused with electric shocks, forced to pay ransoms for their own freedom or sold to other online scam gangs, the Treasury Department said. 

They noted that at least two human trafficking victims have jumped to their death from buildings at the O-Smach Resort. 

Rescue missions since October 2022 have freed hundreds of victims from China, India, Indonesia, Malaysia, Singapore, Thailand and Vietnam. 

The Treasury Department said the scams perpetrated by these compounds continue to be incredibly lucrative. The FBI said that in 2023, losses from cryptocurrency investment scams rose to $3.96 billion.

The sanctions come as more countries continue to press Cambodian leaders to take action. According to the United Nations, at least 100,000 people in Cambodia have been tricked into participating in cyber scams. 

The UN said that these victims “endure inhumane treatment” and many have been subjected to abuses such as torture, arbitrary detention and forced labor.

According to a United States Trafficking in Persons report, more than an estimated 10,000 remain held in “scam factories” in Cambodia.

India rescued 250 of its citizens in April from cyber scam compounds in Cambodia and this week, Singapore arrested several people for alleged involvement in hacking and cyber scams. 

But data released by cryptocurrency trackers shows Cambodian businesses continue to reap billions in profits from these scams. 

A notorious online marketplace allegedly tied to cyber scam operations and linked to the family ruling Cambodia has processed more than $49 billion in cryptocurrency transactions since 2021, according to Chainalysis.