Female real estate developer Truong My Lan sentenced to DEATH for $12.5 billion financial fraud – one of the biggest corruption cases in history – in Vietnam

A real estate tycoon has been sentenced to death in Vietnam in what is one of the country’s biggest financial fraud cases in history, with an estimated $27 billion in damages.

Truong My Lan, chairman of major developer Van Thinh Phat, was accused of defrauding $12.5bn (£10bn) – almost 3 per cent of the country’s 2022 GDP.

She illegally controlled the Saigon Joint Stock Commercial Bank between 2012 and 2022 to obtain these funds through thousands of shell companies and by paying bribes to officials.

More than a dozen police cars and vans carrying the accused – a list that includes former central bankers, former government officials and former SCB executives – arrived at the colonial-era courthouse early in the morning.

After a five-week trial in Ho Chi Minh City, Lan and 85 others faced convictions and sentences on charges ranging from bribery and abuse of power to embezzlement and violations of banking laws.

Lan was found to have embezzled $12.5 billion, but prosecutors said Thursday that the total damages caused by the scam now amount to $27 billion — a figure equivalent to six percent of the country’s 2023 GDP. The 67-year-old has rejected the accusations and blamed his subordinates.

Most of the accused sat in the courtroom with their heads bowed Thursday, although Lan could be seen fidgeting and looking up from the front row.

Prosecutors are urging Lan to oppose the death sentence, an unusually harsh punishment in such a case.

Lan’s arrest in October 2022 was among the most high-profile in an ongoing anti-corruption campaign in Vietnam that has intensified since 2022.

The so-called Blazing Furnace campaign has touched the highest levels of Vietnamese politics. Former president Vo Van Thuong stepped down in March after becoming involved in the campaign.

At one point in 2022, Vietnamese stocks suffered a $40 billion wipeout following a series of major corporate arrests, rattling investor confidence at a sensitive time for the fast-growing economy.

The scale of Lan’s fraud has shocked the nation. VTP was among Vietnam’s richest real estate firms, with projects including luxury residences, offices, hotels and shopping malls.

From early 2018 to October 2022, when the state bailed out SCB after a run on its deposits, Lan appropriated large sums by arranging illegal loans to shell companies, investigators said.

Lam will appeal the verdict, a family member told reporters before it was issued.

She and the others were arrested as part of a national corruption crackdown that has swept up several officials and members of Vietnam’s business elite in recent years.

Lan appeared to say in closing remarks to the court last week that she had suicidal thoughts.

“In my desperation I thought of death,” she said, according to state media.

‘I am so angry that I was stupid enough to get involved in this very violent business environment – the banking sector – which I have little knowledge of.’

Analysts said the scale of the scam raised questions about whether other banks or companies had made similar mistakes, dampening Vietnam’s economic outlook and unnerving foreign investors at a time when Vietnam has sought to position itself as the ideal home for businesses. who are trying to turn their supply. chains away from China.

Hundreds of people began organizing protests in the capital Hanoi and Ho Chi Minh City, a relatively rare event in the communist one-party state, after Lan’s arrest in October 2022.

Police have identified around 42,000 victims of the scandal, which has shocked the Southeast Asian country.

Lan, who is married to a wealthy Hong Kong businessman who is also indicted, is accused of creating fake loan applications to withdraw money from SCB, in which she owned a 90 percent stake.

Police say the victims of the scam are all SCB bondholders who cannot withdraw their money and have not received interest or repayments since Lan’s arrest.

Prosecutors said during the trial that they had seized more than 1,000 properties belonging to Lan.

Authorities have also said that the $5.2 million allegedly given by Lan and some SCB bankers to government officials to hide the bank’s violations and poor financial condition was the largest bribe ever recorded in Vietnam.

The woman who was offered the bribe – Do Thi Nhan, the former head of the State Bank of Vietnam’s inspection team – said during the trial that the cash was handed to her in Styrofoam boxes by former SCB CEO Vo Tan Van.

After realizing they contained money, Nhan refused the boxes, but Van refused to take them back, state media reported.

More than 4,400 people have been indicted in Vietnam’s corruption crackdown, across more than 1,700 graft cases since 2021.

A top Vietnamese luxury real estate magnate – Do Anh Dung, head of the Tan Hoang Minh Group – was sentenced last month to eight years in prison after he was found guilty of defrauding thousands of investors in a $355 million bond scam.

The real estate sector in Vietnam is particularly hard hit by the downturn.

An estimated 1,300 real estate firms pulled out of the market by 2023, developers have offered discounts and gold as gifts to attract buyers, and despite rents for shophouses falling by a third in Ho Chi Minh City, many in the city center are still empty, according to state media.

In November, Communist Party General Secretary Nguyen Phu Trong, Vietnam’s top politician, said the fight against corruption would ‘continue in the long term’.