By Zach Hope
The United States has announced sanctions on one of Cambodia’s most powerful politicians and business tycoons for his alleged deep involvement in the country’s rampant online scam industry.
Ly Yong Phat is one of the biggest fish in Cambodia to be implicated in the illegal trade, which robs victims around the world with often sophisticated trickery and enslaves workers, most of them poor foreigners, through violence and coercion.
Cambodian businessman Ly Yong Phat, the president of the LYP Group, left attends a ceremony for the return of artefacts at Peace Palace in Phnom Penh, Cambodia.Credit: AP
He is a senator from the nation’s ruling Cambodian People’s Party (CPP), a member of its central committee and an adviser to authoritarian former prime minister Hun Sen, who is now the Senate president after handing over the top job to his son, Hun Manet, last year.
Non-government organisations accuse Ly of leveraging his government positions to enrich himself and his family over decades with land grabs, environmental destruction and various legal and illegal business enterprises.
The US Treasury on Thursday (US time) also placed sanctions on his conglomerate, LYP Group, and the Garden City Hotel, Koh Kong Resort, Phnom Penh Hotel and O-Smach Resort.
Authorities raided O-Smach Casino on the border with Thailand in October 2022 and March 2024, rescuing foreign workers from China, India, Indonesia, Malaysia, Singapore, Thailand, and Vietnam.
The O-Smach Resort, close to Cambodia’s border with Thailand.Credit: Facebook
“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,” a Treasury statement said.
“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 deaths from buildings within O‑Smach Resort.”
Cambodia’s Ministry for Foreign Affair and International Cooperation on Friday released a statement criticising the United States’ “unjust decision”, saying it ran “counter to the spirit of reinforcing bilateral cooperation and mutual trust” and was based on unconfirmed reports.
“Mr Ly Yong Phat’s role in advancing Cambodia’s socio-economic development over the decades is widely recognised,” the statement said.
Hun Sen (left) passed on the prime ministership to son Hun Manet in August last year.Credit: Reuters/File
Ly, who has not been charged in Cambodia, was believed to have been appointed as Hun Sen’s personal adviser in late 2022 after the first rescue missions at O-Smach.
While no longer prime minister, Hun Sen is still seen as the power behind the CPP. Billboards with his and Hun Manet’s image – Hun Sen always positioned slightly higher – are ubiquitous in the troubled South-East Asian nation of 17 million people, which is China’s closest regional friend.
Years of war, authoritarian CPP rule, free money from well-meaning international governments and, more recently, the hobbling of the free press have nurtured conditions for corruption and crime among Cambodia’s elite and political classes.
The US Department of State’s annual Trafficking in Person (TIP) report highlighted abuses in Cambodia, in particular the towns of O-Smach and Koh Kong.
“The TIP Report noted 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 labour in online scam operations,” Treasury said.
The Cambodian government described the report as “regrettable and misleading”.
This masthead attempted to contact Ly but did not receive a response. The Australian Department of Foreign Affairs and Trade would not comment about whether it would apply similar sanctions.
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