Cambodian authorities said last week that they had cut activity in scam compounds by half since the start of this year, as the government in Phnom Penh responds to international pressure to clamp down on digital criminal networks.
The Southeast Asian country has grown into a global hub for digital scammers in recent years. Experts estimate the criminals’ profits to be in billions of dollars, with the industry targeting victims all over the world.
Hundreds of thousands of people have been trafficked into scam centers under false pretenses, according to the UN. The victims are then kept in slave-like conditions and forced to work for the organized criminal networks.
The issue, affecting multiple nations, has already battered Cambodia’s international image. Both China and the United States have demanded action and taken steps of their own to combat the problem.
Late last year, the US and the UK imposed sanctions against one of Cambodia’s largest conglomerates while US prosecutors moved to seize a vast trove of cryptocurrency linked to its founder, Chen Zhi, a naturalized Cambodian who had served as an adviser to both Prime Minister Hun Manet and his father, former premier Hun Sen.
Cambodia has long denied that its senior officials are complicit in the scam industry. The authorities were also eager to show they were working to resolve the problem, recently stating that more than 210,000 suspected foreign scammers have left Cambodia voluntarily since last June. A further 30,000 foreign nationals have allegedly been arrested and deported.
Hun Manet: Clamping down on scams is about Cambodia’s future
On March 5, Prime Minister Hun Manet outlined a new law intended to “permanently” wipe out cyberscam operations, under which property owners, landlords, building lessors and recruiters would be held legally responsible for any links to scam operations. Fines could be as high as $1,000 (€862) per illegal worker.
“Suppressing and taking legal measures against these crimes is a commitment for the future of our nation, not something done merely to complete a checklist,” Hun Manet said.
Rights groups and analysts remain skeptical, saying the Cambodian government has made similar promises before and has offered little evidence of going after the best-connected operators.
Montse Ferrer, manager of Amnesty International’s Corporate Crimes Project, told DW that it was still unclear whether the authorities are making as much progress in dismantling the scam compounds as they claim. He warned that the regime is “not being transparent.”
“We don’t know which locations they have investigated and which they haven’t because they don’t publicize this information,” Montse said.
“They also need to build trust … especially because our research has shown their previous activities pointed towards complicity in the industry,” she added.
Others outright dismissed the tough rhetoric from Phnom Penh as aimed solely at curbing international scrutiny.
“That Cambodia’s leadership is claiming this problem will be solved in one month sends an indication that they do not even begin to comprehend the seriousness of the problem,” Jason Tower, a senior expert at the Global Initiative Against Transnational Organized Crime, told DW.
China, US crank up the pressure
Much of the illegal scam industry expanded after the COVID-19 pandemic gutted Cambodia’s illegal casino economy, pushing criminal operators into online fraud.
Cambodia’s endemic corruption, the country is ranked 163rd out of 182 nations on Transparency International’s Corruption Perceptions Index, combined with weak oversight and opacity made it an obvious base.
But Phnom Penh may be spurred into action due to increasing pressure from Cambodia’s close ally, China. While many of the Cambodia-based scam outfits are run by Chinese nationals, many of their principal victims are Chinese, too.
In January, Cambodia extradited China-born Chen Zhi to Beijing after a joint investigation, underscoring how closely the issue now touches Cambodia’s relations with both major powers.
The United States has also hardened its response as Southeast Asia-based scam networks increasingly targeted Western victims, especially Americans. Last year, Washington moved against Huione Group, another Cambodia-based conglomerate with links to the ruling family.
Several other tycoons have also been sanctioned, including Senator Ly Yong Phat, a close ally of Hun Sen.
Southeast Asia scammers swindle billions out of Americans
Last week, Scott Schelble, deputy assistant director of the FBI’s International Operations Division, visited Thailand, Cambodia and Vietnam as Washington steps up regional coordination against the scam networks.
“These are not small or isolated crimes; they are sophisticated, well-resourced criminal enterprises that exploit borders, technology, and vulnerable people to generate enormous profits,” he said after his visit, according to Bloomberg.
The US Treasury estimates that Americans lost at least $10 billion in 2024 to scam operations based in Southeast Asia.
“The international community must maintain, and likely intensify, its pressure,” Julia Dickson, an associate fellow at the Center for Strategic and International Studies, told DW.
“If the cost to the illicit economy outweighs the benefits of scam profits, the government may be incentivized to act,” she added.
In a rare interview with Western media late last month, Prime Minister Hun Manet denied knowledge of Chen Zhi-led Prince Group’s activities but told AFP that his government is serious about the crackdown because the illicit industry “is destroying our honest economy. It has put a bad reputation on Cambodia.”
Its negative impact on harming tourism and investment “is the reason why we need to clean this out,” he said.
A whack-a-mole crackdown
The scam economy has also become entangled with Cambodia’s deadly border raw with Thailand.
Although the dispute is rooted primarily in longstanding territorial claims, Bangkok has increasingly cast some of its border operations as part of a fight against scam compounds located in hard-to-reach areas near the frontier.
But most experts agree that Cambodia’s ability to dismantle the illicit industry is less a matter of capability and more a question of motivation.
“To sustainably dismantle the scam industry, Cambodia will require, first and foremost, a willingness to hold elite perpetrators to account,” Jacob Sims, a visiting fellow at Harvard University’s Asia Center, told DW.
There is a long list of ruling elites who have harbored, protected, and co-perpetrated these crimes for years with utter impunity, Sims added. “Any legitimate effort to dismantle the industry should start there.”
Analysts say operators often get advance warning of raids, move workers and equipment before police arrive, split operations into smaller or less visible sites and allow lower-level players to be detained while more senior figures slip away.
“Higher players in the industry are working to adapt to new conditions in Cambodia, and waiting for the Cambodian government to declare mission accomplished as soon as possible so that they can establish a new normal,” said Tower.
Edited by: Darko Janjevic
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