Imposing Sanctions on Human Traffickers and Online Investment Scam Operations in Cambodia

The United States is imposing sanctions on Cambodian tycoon Ly Yong Phat, his conglomerate L.Y.P. Group Co., O-Smach Resort, and three hotels owned or controlled by Ly for their role in serious human rights abuses related to the treatment of workers subjected to forced labor in online investment scam operations.  Victims forced to run virtual currency investment scams and other online schemes are often lured by fraudulent jobs and promises of free housing.  Instead, they find themselves forced to run scam operations for criminal organizations under horrifying working and living conditions.

On June 24, the Department of State’s Office to Monitor and Combat Trafficking in Persons published the annual Trafficking in Persons Report (TIP Report), which highlights these abuses in Cambodia.  The TIP Report noted that ongoing corruption and official complicity in trafficking crimes remained widespread and endemic, resulting in selective and often politically-motivated enforcement of laws, thereby inhibiting effective law enforcement action against trafficking crimes, including forced labor in online investment scam operations.

Addressing serious human rights abuse in the context of forced labor is a priority line of effort for our use of the Global Magnitsky sanctions program.  Today’s actions aim to promote accountability for human trafficking and other abuses while disrupting the exploitation of scam victims, many of whom are U.S. citizens.  The United States calls on the government of Cambodia to secure the safe release, repatriation, and protection of all persons currently being held in online scam centers and hold those responsible for these horrendous acts to account.

Multiple U.S. law enforcement sources estimate victims in the United States have lost billions of dollars to these scams, and other virtual currency investment frauds – often perpetrated using online platforms and technologies.  The FBI Internet Crime Complaint Center (IC3) has warned  of a spike in cryptocurrency investment schemes.  IC3 reported  that in 2023, losses from investment scams became the most of any crime type they tracked.  Investment fraud losses rose from $3.31 billion in 2022 to $4.57 billion in 2023, a 38% increase.  Within these numbers, investment fraud with a reference to cryptocurrency rose from $2.57 billion in 2022 to $3.96 billion in 2023, an increase of 53%.  The Department of the Treasury designated sanctions actions today were taken pursuant to Executive Order 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world.  For more information, see the Department’s Office to Monitor and Combat Trafficking in Persons Report on Cambodia, and Treasury’s press release.