Department of the Treasury Sanctions Cambodian Senator Accused of Running Crypto Scams

The financial intelligence and enforcement agency of the U.S. Treasury Department is announcing sanctions against a Southeast Asian lawmaker and businessman.

The Treasury Department’s Office of Foreign Assets Control (OFAC) says it has sanctioned Cambodian senator and tycoon Ly Yong Phat as well as his businesses L.Y.P. Group and O-Smach Resort over alleged involvement in crypto and cyber scams that exploited trafficked labor.

OFAC says the two businesses are allegedly guilty of “serious human rights abuse related to the treatment of trafficked workers subjected to forced labor in online scam centers.”

According to the Treasury Department, “frontline scammers in virtual currency confidence schemes are themselves often victims of trafficking, including forced labor, and are subjected to physical and mental abuse.”

The Treasury Department says,

“…confidence scammers leverage fictitious identities and elaborate narratives to develop trusted relationships and deceive the victim. In many cases, this involves convincing victims to invest in virtual currency, or in some cases, over-the-counter foreign exchange schemes, all with the intent of defrauding them of their funds. These scams are largely perpetrated by criminal organizations based in Southeast Asia.”

Besides L.Y.P. Group and O-Smach Resort, the Treasury Department says other businesses linked directly or indirectly to Ly – Garden City Hotel, Koh Kong Resort, and Phnom Penh Hotel – are also getting sanctioned.

A U.S. State Department’s annual Trafficking in Persons (TIP) report released in June highlighted abuses in Cambodia, particularly in the towns of O’Smach and Ko 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 labor in online scam operations. Traffickers force victims to work up to 15 hours a day and, in some cases, ‘resell’ victims to other scam operations or subject them to sex trafficking.”

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