On September 12, 2024, the US Department of Finance, through the Office for Foreign Asset Control (OFAC), announced the introduction of sanctions against Cambodian businessman Lee Yong Fata and his companies for their involvement in serious human rights violations. Li Corporation L.Y.P. Group Co., Ltd is accused of using forced labor in online centers of fraud, where victims of human trafficking are coerced to work in harsh conditions.
OFAC also imposed sanctions on several hotels in Cambodia, including Garden City Hotel, Koh Kong Resort, and Phnom Penh Hotel, which are under Li’s control. This decision aims to dismantle the infrastructure supporting investment fraud that has affected thousands of individuals, including US citizens.
Acting Deputy Minister of Finance on terrorism and financial intelligence Bradley T. Smith stated that the ministry will continue to combat criminal networks that orchestrate such schemes. The Ministry of Finance’s actions are directed towards dismantling systems that exploit people and defraud unsuspecting investors.
Financial scammers utilize fictitious personas to build trusting relationships with victims and convince them to invest in virtual currencies or foreign currency schemes. These operations, mainly orchestrated by criminal groups in Southeast Asia, have resulted in substantial financial losses. In 2023, investment fraud damages increased by 38%, totaling $4.57 billion. Of particular concern is fraud related to cryptocurrencies, which surged by 53% during the same period.
Victims of fraud often fall prey to human trafficking and endure physical and psychological abuse. The 2024 US State Department report on human trafficking highlights the prevalence of forced labor in online fraud centers in Cambodia, particularly in the cities of O’Smach and Koch Cong. Law enforcement in these areas is hindered by corruption and political interests, exacerbating the situation.
The O-Smach Resort complex, owned by Jong Fatu, has been under police investigation for several years. People were enticed there under false promises of employment, only to be isolated from communication and coerced into participating in fraudulent schemes. Some victims who attempted to escape perished. In 2022 and 2024, local authorities conducted multiple rescue operations, liberating numerous individuals of various nationalities.
OFAC sanctions entail the freezing of assets belonging to individuals and companies involved in human rights violations. Any property interests in the US or controlled by American citizens are subject to restrictions. Violators of these sanctions risk facing civil or criminal penalties.
The United States continues to leverage sanctions as