Vietnam Sentences Real Estate Tycoon to Death Over $12.5 Billion Financial Fraud

A court in Vietnam has handed down a death sentence to real estate tycoon Truong My Lan for her role in a massive financial fraud case worth 304 trillion dong ($12.5 billion), state media reported.

The Verdict and the Case

The verdict is the latest dramatic result of a campaign against corruption pledged by the country’s leader, Nguyen Phu Trong. Lan, chairwoman of real estate developer Van Thinh Phat Holdings Group, was found guilty of embezzlement, bribery, and violations of banking rules at the end of her trial in Ho Chi Minh City.

The Charges and Sentences

Lan’s lawyers had pleaded not guilty to the charges, but she has vowed to appeal against the sentence. Among those sentenced were Lan’s husband, Eric Chu, a Hong Kong businessman who was given nine years in jail, and her niece who received 17 years.

The case is Vietnam’s biggest financial fraud on record, involving embezzlement and bribery charges that have led to sentences ranging from probation for three years to life imprisonment.

The Investigation

Lan started her career as a cosmetics trader at Hanoi’s central market before founding Van Thinh Phat in 1992. She was found guilty of siphoning off more than 304 trillion dong from Saigon Joint Stock Commercial Bank (SCB), which she controlled through dozens of proxies, despite rules limiting large shareholding in lenders.

The fraud occurred between early 2018 and October 2022, when the state bailed out SCB after a run on its deposits triggered by Lan’s arrest. Investigators said she arranged unlawful loans to shell companies, appropriating large sums from the bank.

Bribes and Corruption

Lan was also found guilty of bribing officials to persuade authorities to look away, including paying $5.2 million to a senior central bank inspector who was sentenced to life in prison.

Vietnam’s Campaign Against Corruption

The verdict is part of Vietnam’s ongoing campaign against corruption, dubbed “Blazing Furnace,” which has seen hundreds of senior state officials and high-profile business executives prosecuted or forced to step down. Corruption remains widespread in the country, with many people paying bribes just to obtain medical services in public hospitals, according to a recent survey by the United Nations Development Programme and other organizations.

The Impact

The verdict is expected to have significant implications for Vietnam’s financial sector and its efforts to combat corruption. It also highlights the importance of strong regulations and enforcement mechanisms to prevent such frauds from occurring in the future.