Vietnam’s Largest Bank Fraud: Property Developer Truong My Lan Sentenced to Death for $44bn Loan Scheme

Record-Breaking White-Collar Crime Case

In a historic trial, Truong My Lan, a Vietnamese property developer, was sentenced to death on April 11, 2024, for siphoning off $44bn from Saigon Commercial Bank (SCB), making it the most significant white-collar crime case in Vietnam’s history ¹. Lan is the first woman to ever receive a death penalty sentence for a financial crime in the country.

Landmark Trial in Ho Chi Minh City

Held at the imposing yellow, colonial-style Ho Chi Minh City courthouse, the trial involved ²:

• 2,700 witnesses
• 10 state prosecutors
• Around 200 lawyers

Evidence totaled 104 boxes weighing six tonnes. Alongside Lan, 85 other defendants were also found guilty, none of whom showed emotion when handed down their sentences ¹. Her husband and niece were given jail terms of nine and 17 years, respectively.

Vietnam’s War on Corruption: The “Blazing Furnaces” campaign

Communist Party General Secretary Nguyen Phu Trong has taken a hardline stance on corruption, launching the “Blazing Furnaces” campaign in 2016 ³. This campaign aims to tackle rampant corruption that threatens the party’s monopoly on power. To date, it has resulted in the resignation or discipline of hundreds of officials, including two presidents and two deputy prime ministers.

Background

Truong My Lan: From Market Vendor to Property Tycoon

Originating from a wealthy Sino-Vietnamese family in Ho Chi Minh City, Lan began her business empire by selling cosmetics alongside her mother. Post-economic reforms in 1986, she built her portfolio in the property sector ⁴.

Ho Chi Minh City’s Wealthiest Individuals - Property Development and Corruption

Ho Chi Minh City became the breeding ground for the country’s wealthiest individuals, who acquired fortunes in property development and speculation ⁴. As all land is officially state-owned, gaining access relied heavily on personal relationships with government officials, causing pervasive corruption.

The Rise of Saigon Commercial Bank

In 2011, Lan was granted permission to merge three struggling banks into a larger entity, Saigon Commercial Bank (SCB). Prosecutors claim she controlled more than 90% of SCB’s shares through her extensive network of shell companies and proxies ⁵. By ordering the appointment of her loyalists as managers, she eventually authorized numerous loans that ultimately benefited her extensive network ⁵.

The Fraud Allegations

The Disappearing Funds

From 2019 onwards, Truong My Lan allegedly withdrew vast sums of cash, totaling over $4bn (£2.3bn), from the bank and stored it in her basement ¹. The sheer amount in question would weigh approximately two tonnes.

Bribes to State Officials

In addition, she was accused of bribing state officials to avoid scrutiny ⁵. One former central bank inspector was sentenced to life in prison for accepting a $5m bribe.

The Silence Before the Storm

Many were shocked that Truong My Lan managed to carry on with the alleged fraud for such an extended period without detection ³. Experts speculate that Lan was likely protected by influential figures who controlled Ho Chi Minh City’s economy and politics for decades ³. This trial could be an attempt by the Communist Party to regain control over the city’s freewheeling business culture and strengthen its grip on the southern region in the face of rapid growth and increasing corruption.