The erosion of checks and balances in Cambodia has created a permissive environment that has allowed transnational crime, including online scam centres, to flourish.
Conspicuous buildings with prison-like or enclosed features, surrounded by barbed wire and closely watched by security, are readily visible in various parts of Cambodia: its capital Phnom Penh, on its borders with Vietnam and Thailand, and from the streets of the low-key tourist spot-turned-cyber-scam epicentre, Preah Sihanoukville.
If one asks residents what the buildings are for, they immediately answer, “scam compound.”
Inside these walled enclaves, workers (sometimes modern slaves) run online schemes that target victims across the world. A similar situation is unfolding in Laos, Myanmar, and the Philippines.
The United Nations Office on Drugs and Crime (UNODC) estimated that scam farms in the region generate up to $US 40 billion ($A 56 million) annually. A 2024 report by the United States Institute for Peace (USIP) estimated such operations in Cambodia brought in more than $US12.5 billion annually — equivalent to about quarter of the country’s formal GDP. Cambodians themselves lost $US 40 million to online scams in 2024, according to media reports citing Government figures.
Little is done to support scam victims, the foreign workers who have experienced slave-like conditions including rape and torture, or hold those responsible accountable.
Several factors explain the rise of scam compounds. There has been a complete erosion of democracy and its checks and balances in Cambodia since 2013, when Cambodia shifted from a fragile multi-party system to a single-party authoritarian state.
This further loosened the already tenuous constraints on the long ruling Cambodian People’s Party (CPP), which has built a patronage system and rent-seeking culture that thrives on the generation of revenue regardless of the nature of the activities. Thus, the Cambodian system has facilitated transnational organised crime such as cyber scams, human trafficking and money laundering.
Cybercrime syndicates reportedly have ties to Cambodian political elites and their relatives. Some either hold stakes in, or have been named as co-directors or chairs of, companies that belong to key figures linked with scam compounds, which has prompted claims that the Cambodian elites are “complicit in” cybercrime or “abetting” transnational crime.
A case that points to the government’s complicity is that of Chen Zhi, chairman of Prince Holding Group, a former adviser to long ruling Cambodian leaders Hun Sen and his son, Hun Manet, the present Prime Minister of Cambodia. For years, Chen, a Chinese-born tycoon and naturalised Cambodian citizen, played a role in state affairs, including contributing $US 3 million to the government’s efforts to alleviate the impact of COVID-19 and was granted the title of “Okhna,” the English equivalent of “lord.”
In October 2025, the US Department of Justice charged Chen with a cryptocurrency scam involving at least 10 scam compounds and seized approximately $US 15 billion in bitcoin from the company. Later, Chen’s associate, Li Xiong, who was chairman of financial group Huione, allegedly a subsidiary of Prince Group, was also arrested. Hun To, a cousin of the Prime Minister, held shares in a Huione subsidiary, Huione Pay Plc. Both Chen and Li were extradited to China a few days after their arrests. The Cambodian government denied knowledge of Chen’s role in organised crime or that he had received his citizenship illegally.
The Cambodian government has since passed a law to curb cybercrime. It also claims that from early 2025 to June 2026, it located more than 500 scam operations and closed more than 400 of them. It also claims to have revoked 25 casino licenses and prosecuted 1,761 defendants.
However, an Amnesty International report released in June found the government’s crackdown had “failed to dismantle the vast majority of sites in the country or protect and support thousands of people subjected to human trafficking, torture and slavery”. The report identified 33 scam compounds in addition to the 53 found last year.
The crackdown on scam compounds has been seen as a response to international pressure from countries including the US, UK, Korea and particularly China, while the Cambodian government claimed that it acted on its own account. Whatever the real reason, one thing is clear: none of the elites that have been cited for their involvement in cyber scams has faced any repercussions.
The state’s patronage system and rent-seeking culture was embedded in the leadership structure from the time the CPP took power and prioritised wealth generation for members of the elite over the concerns of the general population. Pressure on the leadership was once directed through opposition parties, civil society and independent media. These institutions, however, have been largely shut down, reducing transparency and allowing the proliferation of cyber scams.
Cyber scam expert Jacob Sims put it well when he said in an interview with the author that even if the Cambodian government really did “shut down most of the scam compounds, it has done almost nothing to dismantle the underlying architecture that gave rise to the industry or hold local elite perpetrators accountable.”
This article is part of a special series on ‘Governing for Growth: Democracy and Development in Southeast Asia’ – a joint initiative of Insights and Melbourne Asia Review. It marks this year’s Southeast Asia Update and Southeast Asia Oration by Indonesian Economist and former Minister of Finance of Indonesia, Sri Mulyani Indrawati, hosted by Asialink and Asia Institute, University of Melbourne, with support from the ASEAN-Australia Centre.
Bopha Phorn is an independent Cambodian journalist and PhD candidate at the Coral Bell School of Asia Pacific Affairs at the Australian National University.
Image: Panoramic aerial view of Sihanoukville Special Economic Zone from Otres Beach. Credit: Kiensvay/WikiCommons.
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