US sanctions Cambodian politician over Chinese scam factories
The US Treasury Department’s Office of Foreign Assets Control has sanctioned a Cambodian politician in relation to Chinese scam factories.
Ly Yong Phat, a Cambodian senator and personal advisor to Cambodia’s President of the Senate, was sanctioned by OFAC on September 12th.
Phat’s companies, L.Y.P Group Co. LTD, O-Smach Resort, Garden City Hotel, Koh Kong Resort and Phnom Penh Hotel were also sanctioned.
The sanctions pertain to Phat’s and his company’s alleged involvement in
serious human rights abuse related to the treatment of trafficked workers subjected to forced labor in online scam centers.
BehindMLM does its bit to keep consumers informed by staying ahead of what we refer to as “click a button” app Ponzis.
Although the law of diminishing returns has well and truly kicked in (often these scams collapse between research and publication), there is still an endless daily launch of task-based app Ponzis.
Having emerged during the COVID-19 pandemic, the MLM side of south-east Asia’s Chinese scam factories are just the tip of the iceberg. Related fraud typically involves cryptocurrency and spans romance, recovery and pig-butchering scams.
IC3 reported that in 2023, losses from investment scams became the most of any crime type they tracked.
Investment fraud losses rose from $3.31 billion in 2022 to $4.57 billion in 2023, a 38 percent increase.
Within these numbers, investment fraud with a reference to cryptocurrency rose from $2.57 billion in 2022 to $3.96 billion in 2023, an increase of 53 percent.
Specific to Phat’s involvement in Chinese scam factories, OFAC states;
O-Smach Resort is owned by L.Y.P. Group, which is owned by Cambodian senator and tycoon Ly Yong Phat (Ly).
For more than two years, from 2022 to 2024, O-Smach Resort has been investigated by police and publicly reported on for extensive and systemic serious human rights abuse.
Victims reported being lured to O-Smach Resort with false employment opportunities, having their phones and passports confiscated upon arrival, and being forced to work scam operations.
People who called for help reported being beaten, abused with electric shocks, made to pay a hefty ransom, or threatened with being sold to other online scam gangs.
There have been two reports of victims jumping to their death from buildings within O‑Smach Resort.
Local authorities have conducted repeated rescue missions at O-Smach Resort, including in October 2022 and March 2024, freeing victims of various nationalities, including Chinese, Indian, Indonesian, Malaysian, Singaporean, Thai, and Vietnamese.
Being a senator, Phat is well-connected to Cambodia’s ruling party. This is reflected in Cambodia’s official response to Phat’s sanctions.
Cambodia’s foreign ministry on Friday expressed deep regret over a U.S. decision to sanction a local tycoon and senator over alleged trafficking of people forced to work in scam centres, calling it politically motivated.
The foreign ministry said in a statement the “imposition of such unilateral sanctions undermines the respect for international law and basic norms governing interstate relations, in particular the principles of sovereign equality and non-interference”.
Diminishing Phat’s sanctions as “politically motivated” instead of addressing the alleged crimes themselves is telling.
Quite obviously Chinese organized crime interests aren’t operating without government cooperation. In Cambodia we have a seemingly untouchable senator actively sheltering and apparently hosting Chinese scam factories.
Back in 2013, the Bangkok Post reported Phat has all but controlled Cambodia’s Koh Kong region since at least 2002.
Ranked 12th among Cambodia’s richest people _ some say he should be at the top of the list _ Ly Yong Phat’s signature is everywhere in Koh Kong, a province tucked away in Cambodia’s southwest along the Thai border.
Realising Koh Kong’s strategic potential for trade with Thailand, Ly Yong Phat bankrolled a 1.9km bridge across the Kaoh Pao, a wide water course at the confluence of several rivers, at a cost of US$7.2 million.
Completed in 2002, Ly Yong Phat has had a hold on cross border trade with Thailand through his LYP Group ever since.
His biggest issue is Koh Kong’s unsavoury reputation. If Cambodia _ whether fairly or not _ is a country synonymous with corruption and violence then Koh Kong is its darkest side.
Hard drugs and prostitution are common, pirated cigarettes and alcohol alongside electronic goods and brand name clothing routinely pass through its harbour.
Last year, well known environmentalist Chhut Vuthy was shot dead during a confrontation with a security guard who had been ordered by a Chinese company to seize his camera.
Reports of illegal logging, sand mining and land grabbing regularly make the pages of local newspapers while Ly Yong Phat’s own company was caught using child labour to harvest sugar cane, an industry that has blossomed recently due to a generous European quota system designed to aid developing nations.
Chinese companies have announced plans to spends billions of dollars along the Cambodian side of the Thai border, from Preah Vihear to Koh Kong.
Although action has yet to be taken, similar setups likely exist in Myanmar, Laos, the Philippines, Thailand, Vietnam and other countries Chinese crime groups operate from.
If for nothing else than I can move on from reviewing braindead cookie-cutter app Ponzis, BehindMLM welcomes international investigation and action against Chinese scam factories.