Real estate tycoon Truong My Lan, the 67-year-old chair of Van Thinh Phat, was sentenced to death by a court in Ho Chi Minh City in southern Vietnam for committing the country’s largest financial fraud case. Lan was charged with fraud amounting to $12.5 billion, nearly 3% of Vietnam’s 2022 GDP. She illegally controlled Saigon Joint Stock Commercial Bank between 2012 and 2022, allowing 2,500 loans that resulted in losses of $27 billion to the bank. The court ordered her to compensate the bank $26.9 million. Despite Lan’s participation in charity activities and being a first-time offender, the court attributed its harsh sentence to the orchestrated and sophisticated nature of the criminal enterprise.
The court found that Lan’s actions not only violated the property management rights of individuals and organizations but also eroded people’s trust in the leadership of the Party and State by pushing SCB into a state of special control. Lan’s niece, Truong Hue Van, the chief executive of Van Thinh Phat, was sentenced to 17 years in prison for aiding her aunt. Lan and her family established the Van Thinh Phat company in 1992, growing to become one of Vietnam’s richest real estate firms with key projects in luxury residential buildings, offices, hotels, and shopping centers. Lan orchestrated the merger of SCB with two other lenders in 2011 with the approval of Vietnam’s central bank.
The court found that Lan used her position to tap SCB for cash by indirectly owning more than 90% of the bank and approving loans to “ghost companies.” She then bribed officials to cover her tracks. Former central bank official Do Thi Nhan was sentenced to life in prison for accepting $5.2 million in bribes. Lan’s arrest was part of Vietnam’s ongoing anti-corruption drive, known as the Blazing Furnace campaign, which has touched the highest levels of Vietnamese politics. Analysts believe that the scale of the scam raises questions about potential similar errors in other banks or businesses, impacting Vietnam’s economic outlook and foreign investor confidence.
The real estate sector in Vietnam has experienced significant challenges as a result of the fraud case, with 1,300 property firms withdrawing from the market in 2023. Developers have been offering discounts and gold as gifts to attract buyers, and rents for shophouses in Ho Chi Minh City have fallen by a third, leaving many properties empty. Communist Party General Secretary Nguyen Phu Trong emphasized that the anti-corruption fight in Vietnam will continue for the long term. The trial of Truong My Lan has shocked the nation and highlighted the need for continued vigilance against financial fraud and corruption in the country.
