Real estate magnate Truong My Lan received a death sentence on Thursday from a court in Ho Chi Minh City, marking Vietnam’s largest financial fraud case to date, according to state media outlet Vietnam Net.
The 67-year-old chair of Van Thinh Phat real estate company faced charges of fraud totaling $12.5 billion, equivalent to nearly 3 percent of the country’s 2022 GDP.
Lan, who unlawfully controlled Saigon Joint Stock Commercial Bank from 2012 to 2022, approved 2,500 loans resulting in $27 billion in losses for the bank, as reported by state media VnExpress. The court ordered her to compensate the bank with $26.9 million.
Despite some mitigating factors, such as this being her first offense and her involvement in charitable endeavors, the court deemed the case extremely severe. It characterized Lan’s actions as leading an orchestrated and sophisticated criminal enterprise with irreparable consequences, as per VnExpress.
Lan’s niece, Truong Hue Van, the CEO of Van Thinh Phat, received a 17-year prison sentence for aiding her aunt.
Establishing Van Thinh Phat in 1992 after Vietnam’s transition to a market-oriented economy, Lan, previously assisting her Chinese businesswoman mother in selling cosmetics, grew her company into one of Vietnam’s wealthiest real estate firms, involved in luxury residential, commercial, and hospitality projects, per state media Tien Phong. She orchestrated the merger of SCB bank in 2011, collaborating with Vietnam’s central bank.
The court found Lan indirectly owning over 90 percent of SCB and approving loans to fictitious companies, diverting funds back to her, according to government documents. She also allegedly bribed officials to cover her tracks.
Former central bank official Do Thi Nhan received a life sentence for accepting $5.2 million in bribes.
Lan’s arrest in October 2022 was a significant event in Vietnam’s anti-corruption drive, coinciding with the Blazing Furnace campaign. The scale of the scam raised concerns about the integrity of other banks and businesses, impacting Vietnam’s economic outlook and investor confidence.
The real estate sector, in particular, suffered, with many firms exiting the market, offering discounts and incentives, and facing high vacancy rates in Ho Chi Minh City’s central areas, according to state media reports.
Communist Party General Secretary Nguyen Phu Trong emphasized the continuation of the anti-corruption efforts for the foreseeable future.
