Investment Frauds in Cambodia: How They Happened and What We Can Learn.
Investment frauds have become increasingly common in Cambodia, often luring victims with promises of high returns and quick profits. The rapid growth of the economy, coupled with limited financial literacy among some investors, has made the country fertile ground for such scams. Victims range from ordinary citizens to seasoned investors who fall prey to convincing fraudsters. In response, the Cambodian government and law enforcement agencies have been working diligently to crack down on fraudulent activities and bring perpetrators to justice. This article explores ten notable investment frauds in Cambodia, highlighting their methods, impacts, and resolutions.
Fraudster: Tycoon Ly Samet
- Name of Fraud: Investment Fraud and Impersonation
- Fraudster: Ly Samet
- Total Money or Projects Involved: Tens of millions of dollars
- Number of Victims: Numerous individuals and officials, though the exact number is unspecified.
- Year of Fraud: 2024
- Location of Conducting Fraud: Phnom Penh, Cambodia
- How It Was Fraud: Ly Samet, a well-known fortune teller and real estate businessman, allegedly used the name of Senate President Hun Sen to defraud officials and others. He is accused of accepting large sums of money under the pretense of using his connections with high-ranking government officials to secure positions within government ministries and national institutions. This fraudulent scheme involved misrepresenting his influence and exploiting trust.
- Resolution or Interventions: After an arrest warrant was issued on October 9, 2024, Ly Samet was apprehended and sent to the 1st Correctional Center on November 5, 2024, following a detention order by the Phnom Penh Municipal Court. Despite issuing an apology video on November 4, in which he confessed his guilt and sought forgiveness from Hun Sen, the Senate President firmly rejected any leniency. He emphasized that Ly Samet would face legal consequences for his actions without exception. Duong Dara, Ly Samet’s assistant, is also facing trial for involvement in the fraud.
Key Summary of the Case
Ly Samet’s involvement in widespread investment fraud has led to his arrest and detention, following an investigation into his fraudulent activities. He is accused of using the name of Senate President Hun Sen to manipulate officials and secure money under false pretenses. Despite his public apology, no leniency was granted by the authorities, and he is now facing legal proceedings. The case highlights significant concerns about corruption and misuse of power, with authorities stressing that such fraudulent actions will not go unpunished.
Fraudster Mr. Kuy Vat – Park Cafe Chain
- Name of Fraud: Park Cafe Chain Investment Fraud – linked to the Cambodian Investors Corporation Plc (CIC) case
- Fraudster: Mr. Kuy Vat, CEO of Park Cafe Chain
- Total Money or Projects Involved: Involving over $2 million in investments
- Number of Victims: Several hundred
- Year of Fraud: 2024
- Location of Conducting Fraud: Phnom Penh, Cambodia
- How It Was Fraud: Kuy Vat misled investors into believing in the expansion of his Park Cafe Chain with lucrative returns. However, the funds were diverted into personal accounts and unprofitable ventures, leading to significant losses for the investors.
- Resolution or Interventions: Kuy Vat was arrested and charged with fraud. Cambodian courts are currently processing claims, and a recovery plan is being implemented to compensate victims.
Key Summary of the Case
- Arrest of Businessman: A prominent Cambodian businessman has been arrested for issuing a bad cheque and for fraud and embezzlement linked to the Cambodian Investors Corporation Plc (CIC) case, involving millions of dollars.
- Police Involvement: Major General Cheav Vibol, Deputy Chief of the Penal Police Department, confirmed the arrest, which took place at one of the suspect’s coffee shops in Phnom Penh.
- Legal Proceedings: The suspect is being detained for questioning and further investigation before being sent to court. Details of the case remain under investigation.
- Oknha Title Clarification: The Oknha Association clarified that the suspect is not an Oknha, refuting social media claims.
- Fraud Accusations: The suspect was accused in February of defrauding investors of up to $90 million through CIC.
- Investor Impact: Dr. Quach Mengly, a major investor, lost nearly $300,000 and called for a thorough investigation and justice, emphasizing the broader impact on many families.
- Call for Justice: Dr. Mengly highlighted the prevalence of similar Ponzi schemes in Cambodia and the need for strict action to prevent further victimization.
- Economic Crisis for Investors: Another investor, Khemera Chan, reported that CIC stopped paying interest since June of the previous year, causing significant financial hardship for her family. She called for intervention from the Ministry of Justice and Prime Minister Hun Manet.
Sources: Khmer Times, Khmer Times
Fraudster by Mr. Yang Saing Koma – Dragon Fruit Project Fraud
- Name of Fraud: Dragon Fruit Project Fraud – linked to Mr. Yang Saing Koma’s Agricultural Scheme
- Fraudster: Mr. Yang Saing Koma, a prominent agricultural entrepreneur and founder of a large-scale dragon fruit project.
- Total Money or Projects Involved: Involving over $5 million in investments.
- Number of Victims: Several hundred investors, mostly local farmers and small-scale investors.
- Year of Fraud: 2023–2024
- Location of Conducting Fraud: Kampong Cham Province, Cambodia
How It Was Fraud: The collapse of an agricultural investment scheme in Cambodia has left numerous investors facing financial devastation. Promising significant returns through sustainable farming projects, the scheme attracted many participants. However, the venture failed, and investors were unable to recover their money. Victims have voiced frustration over the lack of transparency and accountability from the scheme’s operators, raising concerns about regulatory oversight in such investment opportunities. Many are calling for justice and financial restitution after their savings were wiped out. For more details, you can read the full article here.
Fraudster: The Brilliant City Scheme by Leng Channa
- Name of Fraud: Brilliant City Real Estate Scheme
- Fraudster: Leng Channa, a property tycoon
- Total Money or Projects Involved: Multi-million-dollar real estate project
- Number of Victims: Over 200 investors
- Year of Fraud: 2023
- Location of Conducting Fraud: Siem Reap, Cambodia
- How It Was Fraud: Leng Channa’s Brilliant City promised investors high returns on luxury real estate developments. However, instead of delivering on these promises, Channa diverted funds for personal use and issued rubber cheques when investors demanded their money back.
- Resolution or Interventions: Channa was arrested by Siem Reap authorities for fraud, money laundering, and breach of trust. The government froze his assets and launched a comprehensive investigation to recover stolen funds.
- Sources: Phnom Penh Post, Khmer Times, Kiripost, Camboja News
Fraudster: Ponzi Scheme by Businessman Nuon Ak
- Name of Fraud: Ponzi Investment Scheme
- Fraudster: Nuon Ak
- Total Money or Projects Involved: Over $1 million
- Number of Victims: Almost 100 investors
- Year of Fraud: 2023
- Location of Conducting Fraud: Phnom Penh, Cambodia
- How It Was Fraud: Nuon Ak operated a Ponzi scheme by collecting funds from new investors to pay returns to earlier investors, creating a false impression of a profitable investment. This continued until the scheme collapsed, and Nuon Ak could no longer pay out returns.
- Resolution or Interventions: Nuon Ak was arrested following an outcry from the victims. The authorities froze his assets and initiated legal proceedings to reclaim the lost funds and provide restitution to the defrauded investors.
Key Summary of the Case
Nearly 100 people have filed a complaint against businessman Nuon Ak, claiming he cheated them out of over $1.25 million in a land deal in Kampot province, Cambodia. The complainants allege they invested in the Kampot Thansur and Kampot Forest projects based on promises of development, but no progress has been made. Nuon Ak is accused of breaching contracts, closing his company’s offices, and being unresponsive. They are urging local authorities to intervene and hold Nuon Ak accountable for his actions and to honor the agreements made.
Sources: Khmer Times
Fraudster: Forgery and Fraud by Lon Borey
- Name of Fraud: Forgery and Fraud Scheme
- Fraudster: Lon Borey, Motivational Speaker
- Total Money or Projects Involved: Undisclosed amount
- Number of Victims: Several (exact number not disclosed)
- Year of Fraud: 2023
- Location of Conducting Fraud: Phnom Penh, Cambodia
- How It Was Fraud: Borey was involved in creating forged documents to fraudulently claim ownership of properties and investments. He targeted expatriates and locals unfamiliar with the legal processes, taking advantage of their trust.
- Resolution or Interventions: Borey was arrested and charged with forgery. Authorities confiscated the forged documents and took steps to restore the victims’ rightful ownership of their properties.
Key Summary of the Case
- Arrest and Charges: Lon Borey, a well-known English teacher, real estate businessman, and former deputy director of E-School Cambodia, was arrested and charged by the Phnom Penh Municipal Court for allegedly forging house and land titles and cheating a microfinance company out of $250,000 in January 2023.
- Criminal Charges: Borey has been charged with “Fraud, Forgery of Public Document, and Use of Forged Public Document” under the Criminal Code’s Articles 377, 378, 629, and 630. If convicted, he faces a prison sentence ranging from five to ten years.
- Incident Details: In January, Borey secured a $250,000 loan from a private microfinance company by mortgaging land in Sen Sok district and a house title as a security deposit. These titles were allegedly worth over $500,000.
- Discovery of Forgery: Six months after the loan was granted, Borey had not made any payments. When the microfinance company verified the land and house titles with the municipal cadastral office, it was discovered that the documents were forged.
- Legal Action and Detention: The microfinance company filed a lawsuit against Borey on August 18, leading to his arrest. He is currently in pre-trial detention.
- E-School Cambodia’s Statement: E-School Cambodia issued a statement clarifying that the alleged forgery is Borey’s personal issue and is not connected to the school.
Sources: Khmer Times
Conclusion
Investment frauds in Cambodia are a sobering reminder of the importance of due diligence and skepticism in financial dealings. While the government has taken steps to address these issues, investors must also remain vigilant. If you’ve been affected by any of these scams or have experiences to share, please comment below. Your insights can help others avoid falling victim to similar schemes.
Feel free to share your thoughts or experiences regarding investment frauds in Cambodia in the comments. How can the community better protect itself against these scams