The U.S. Department of the Treasury recently issued a press release stating that it will impose sanctions on Cambodian senator and businessman Ly Yong Phat. LYP Group. and O-Smach Resort under his name are suspected of using inhumane methods to treat workers who were forced to engage in online fraud. It is reported that the specific crimes include cryptocurrency fraud.
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TogglePolitical and business tycoon involved in cryptocurrency fraud, backed by Cambodian Prime Minister
It is understood that the O-Smach Resort involved in the case belongs to LYP Group. The group is Cambodian senator and businessman Ly Yong Phat. "For more than two years, from 2022 to 2024, O-Smach Resort was investigated by police and publicly reported for systemic and serious human rights violations," the U.S. Treasury said.
Victims said they were lured to O-Smach Resort with false employment opportunities, had their phones and passports confiscated upon arrival, and were forced to engage in fraudulent activities. They were beaten, tortured with electric shocks, forced to pay huge ransoms, or threatened to be sold to other online fraud groups. There have been two reports of victims jumping to their deaths from buildings within O ‑ Smach Resort.
Local authorities conducted multiple rescue missions at O-Smach Resort in October 2022 and March 2024, rescuing victims of different nationalities, including Chinese, Indians, Indonesians, Malaysians, Singaporeans, and Thais and Vietnamese.
Pursuant to Executive Order (EO) 13818, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Ly Yong Phat, LYP Group, and O-Smach Resort as responsible for, complicit in, or directly or indirectly involved in serious human rights violations. Foreigners committing human rights violations.
It is understood that Ly Yong Phat holds both Cambodian and Thai nationalities. His business started in Koh Kong Province, Cambodia (also known as Koh Kong Province), and he is known as the King of Koh Kong. He has good political and business relations and is an advisor to the current Prime Minister Hun Sen.
The Cambodian Ministry of Foreign Affairs responded to the sanctions case: "It expresses deep disappointment with the unfair and unfounded sanctions imposed by the U.S. Department of the Treasury on September 12 against Senator Ly Yong Phat and LYP Group. and four other related companies. "
It also stated that the United States did not disclose specific evidence regarding Senator Ly Yong Phat's accusations of Internet fraud and forced labor, so it was politically motivated and was not conducive to efforts to improve bilateral relations and cooperation.
Cryptocurrency investment fraud increased by 53% year-on-year, and official collusion hindered the investigation
According to the Treasury Department's Financial Crimes Enforcement Bureau (FinCEN) and its September 2023 alert to U.S. financial institutions and the public, scammers use fictitious identities and develop trusting relationships to deceive victims into convincing them to invest in virtual currencies. These scams are mainly carried out by criminal organizations in Southeast Asia. The FBI's Internet Crime Complaint Center (IC3) warned of a surge in cryptocurrency investment schemes. The IC3 report states that by 2023, investment fraud will cost the most of all crime types they track. Investment fraud losses will increase from US$3.31 billion in 2022 to US$4.57 billion in 2023, an increase of 38%. Investment fraud involving cryptocurrency increased from US$2.57 billion in 2022 to US$3.96 billion in 2023, a 53% increase.
Many of these scammers are also victims of human trafficking, including forced labor, and suffer physical and mental abuse. On June 24, 2024, the State Department’s Office to Monitor and Combat Trafficking in Persons released its annual Trafficking in Persons Report (TIP Report ), which highlighted abuses in Cambodia, including in the towns of O-Smach and Ko Kong. In particular, the TIP Report noted , the complicity of corrupt officials in trafficking crimes remains widespread, resulting in selective and often politically motivated enforcement and hindering effective law enforcement actions against trafficking crimes. Traffickers force victims to work up to 15 hours a day and, in some cases, "resell" victims to other fraud organizations or force them into the sex trade.
In recent years, fraud parks in Southeast Asia have been operating on a large scale. Through the pig-killing plate of emotional fraud, they have caused disasters around the world and caused many disasters. Cryptocurrency has become the most powerful medium for fraud groups in terms of financial flow. At the same time, through AI Technology and its fraud capabilities are also constantly improving. The advancement of science and technology has also enabled criminals to hide in countries with weak supervision and extend their claws around the world.
