The U.S. Treasury has recently taken action against Cambodian Senator Ly Yong Phat for his involvement in running crypto scam centers that exploit trafficked workers. Investigations revealed that Phat trafficked individuals from various regions and forced them to participate in fraudulent operations within his conglomerate L.Y.P. Group Co., LTD and O-Smach Resort. The workers were lured under false pretenses, had their documents confiscated, and were subjected to physical abuse and extortion. Reports even indicated that some victims jumped to their deaths from buildings within the resort. Following these findings, the OFAC imposed sanctions on Phat and his affiliated properties like Garden City Hotel, Koh Kong Resort, and Phnom Penh Hotel to disrupt his network of exploitation.
The Treasury Department’s sanctions also target additional Cambodian properties linked to Ly Yong Phat, such as Garden City Hotel and Koh Kong Resort, used to facilitate his network of exploitation. According to Bradley T. Smith, the Secretary of the Treasury for Terrorism and Financial Intelligence, these actions aim to combat human trafficking and financial fraud. The sanctions are designed to hold those involved accountable for their abuses and disrupt Phat’s operations targeting unsuspecting victims through fraudulent investment schemes. The OFAC’s decision came after an investigation into the use of fictitious identities and elaborate schemes to deceive victims into investing in virtual currencies and OTC foreign exchange trades.
Furthermore, the Financial Crimes Enforcement Network (FinCEN) issued a Financial Trend Analysis on mail theft-related check fraud incidents based on Bank Secrecy Act data filed in the six months following its 2023 alert. The analysis revealed that crypto scams orchestrated by criminal organizations based in Southeast Asia are prevalent. Local authorities in Cambodia have conducted rescue missions at O-Smach Resort, freeing victims of various nationalities like Chinese, Indian, Indonesian, Malaysian, Singaporean, Thai, and Vietnamese. The U.S. has frozen the assets of Ly Yong Phat and his affiliates, blocking all property and interests in property within the country or under the control of U.S. persons. Transactions involving these blocked assets are prohibited, aiming to cut off financial resources from those involved in human trafficking and financial fraud.
The Cambodian Ministry of Foreign Affairs expressed “deep regret” over the U.S. Treasury’s sanctions, condemning the measures and criticizing the sanctions imposed on Phat’s properties. These properties were linked to crypto scams associated with human trafficking and forced criminality. Additionally, the OFAC has imposed sanctions on individuals and business entities using crypto for illicit transactions in the past, targeting a Hezbollah crypto operator linked to terrorist funding and a crypto mixing service used by North Korea’s Lazarus Group to launder stolen funds. The actions taken by the U.S. Treasury reflect a strong commitment to combating financial crimes and human rights abuses in the crypto industry.
