The U.S. Treasury's Office of Foreign Assets Control (OFAC) recently announced sanctions against Cambodian Senator Ly Yong Phat for his involvement in running crypto scam centers that exploited trafficked workers. Investigations revealed that Phat trafficked individuals from various regions and coerced them into engaging in fraudulent activities.
Ly Yong Phat's crypto Scam Operations Exploited Trafficked Workers
The OFAC's press release disclosed that Phat, along with his conglomerate L.Y.P. Group Co., LTD, and O-Smach Resort, were deeply implicated in exploiting trafficked workers for forced labor within crypto scam centers. Over the past two years, Phat and his entities have been linked to severe human rights abuses, with O-Smach Resort playing a central role in these exploitative practices.
Reports indicated that individuals were deceived and lured to the resort, where they were subjected to physical abuse, including beatings and electric shocks. Victims also reported instances of extortion, threats, and even tragic incidents of individuals jumping to their deaths from buildings within the resort.
In response to these egregious findings, authorities have taken decisive action against Phat's network, extending OFAC sanctions to additional Cambodian properties associated with his exploitative activities, such as Garden City Hotel, Koh Kong Resort, and Phnom Penh Hotel.
Secretary of the Treasury for Terrorism and Financial Intelligence, Bradley T. Smith, emphasized that the sanctions demonstrate a firm commitment to combating human trafficking and financial fraud. These actions aim to hold accountable individuals involved in such abuses and disrupt operations that target unsuspecting individuals, including Americans, through fraudulent investment schemes.
The OFAC's decision to sanction Phat follows a broader investigation into the use of fictitious identities and elaborate schemes to deceive victims into investing in virtual currencies and over-the-counter (OTC) foreign exchange trades.
U.S. Freezes Assets of Ly Yong Phat and Affiliates
OFAC's sanctions against Ly Yong Phat entail a block on all property and interests in property belonging to him and his entities within the United States or under the control of U.S. persons. Entities that are 50% or more owned by the sanctioned parties are also subject to these restrictions.
As a result of these sanctions, U.S. persons are prohibited from engaging in transactions involving any assets or interests of the blocked individuals or entities, unless specifically authorized by OFAC. This measure aims to cut off the financial resources of those involved in human trafficking and financial fraud, preventing them from operating within or impacting U.S. financial systems.
Meanwhile, the Cambodian Ministry of Foreign Affairs expressed deep regret over the U.S. Treasury's sanctions. The ministry condemned the measures and criticized the sanctions imposed on Phat's properties, which have been linked to crypto scams associated with human trafficking and criminal activities.
OFAC has previously imposed sanctions on persons and business entities engaged in illicit transactions using cryptocurrency. In a similar vein, the U.S. Treasury sanctioned a Hezbollah crypto operator linked to terrorist funding and also targeted crypto mixing service Tornado Cash, alleging that North Korea's Lazarus Group leveraged the service to launder over $100 million stolen in crypto scams.
