The United States has imposed sanctions on prominent Cambodian businessman and ruling party senator, Ly Yong Phat, along with several of his entities, over accusations of involvement in human trafficking linked to online scam operations. The sanctions come at a critical moment in US-Cambodian relations, as Cambodia strengthens ties with China, a strategic rival to Washington.
The US Treasury Department’s Office of Foreign Assets Control (OFAC) announced on Thursday that Ly Yong Phat’s LYP Group Co. and O’smach Resort were being targeted due to their connection to severe human rights abuses. The sanctions also extend to Garden City Hotel, Koh Kong Resort, and Phnom Penh Hotel, all of which are linked to Ly’s business empire.
Ly Yong Phat, a well-known Cambodian figure with close ties to the country’s ruling elite, was appointed as a personal adviser to Cambodia’s former Prime Minister, Hun Sen, in 2022. His business empire spans multiple sectors, including hospitality, real estate, and agriculture, making him one of Cambodia’s most influential tycoons.
In recent years, Cambodia and other Southeast Asian nations have become hubs for a growing criminal enterprise involving online scam operations that target victims worldwide. These operations are often run from heavily fortified compounds, many of which are controlled by Chinese crime syndicates. Trafficked workers, often lured with false promises of employment, are forced to work in these scam centres under appalling conditions.
The US Treasury’s statement outlined the brutal realities faced by trafficked victims in these operations. According to the report, workers are forced to labour for up to 15 hours a day under severe duress. In many cases, their passports and phones are confiscated, trapping them in a cycle of exploitation. Some victims are even “resold” to other scam operations, and there have been instances where they are subjected to sex trafficking.
The Treasury also highlighted the findings of the US State Department’s 2024 Trafficking in Persons Report, which cited serious abuses at both O’smach Resort and Koh Kong. The report noted that official complicity in these crimes is widespread, with law enforcement often turning a blind eye or selectively enforcing the law based on political motives.
“O-smach Resort has been under police investigation for more than two years for its extensive and systemic involvement in serious human rights abuses,” the Treasury Department said in its statement. The report also detailed accounts from victims, who described how they were lured to the resort with promises of legitimate employment, only to have their personal belongings confiscated upon arrival and be forced to participate in scam operations.
Rescue operations led by local authorities have managed to free trafficked workers in some instances. Notably, in October 2022 and March 2024, Cambodian authorities conducted missions to rescue victims of various nationalities from these scam operations.
However, despite these efforts, human trafficking and fraudulent schemes remain rampant in the region. The criminal industry, which involves complex networks of traffickers and scam operators, is estimated to be worth billions of dollars, affecting victims across the globe.
The US sanctions against Ly Yong Phat are part of a broader effort to crack down on human trafficking and criminal activities in Southeast Asia. It also signals Washington’s concerns over Cambodia’s growing closeness with China, which has invested heavily in the country, particularly in its economic and infrastructure sectors.
As tensions between the US and Cambodia continue to simmer, these sanctions underscore the complexities of balancing diplomatic relations while addressing serious human rights concerns. For now, the US government’s actions mark a significant step in bringing international attention to the ongoing human trafficking crisis in Cambodia and the broader Southeast Asian region.
