Financial Crime World

Title: Vietnamese Real Estate Tycoon Truong My Lan Receives Death Sentence in Historic Financial Fraud Case

Background

  • Truong My Lan, a prominent Vietnamese businesswoman, was sentenced to death on Thursday for her role in the country’s largest financial fraud case, worth an estimated $40 billion.
  • Lan, born in 1956, began her career selling cosmetics and later established Van Thinh Phat in 1992.
  • The company grew to become one of Vietnam’s most affluent firms, with ties to Ho Chi Minh City’s most valuable assets.

Career and Business

  • Lan’s career began at Ho Chi Minh City’s oldest market where she helped her mother sell cosmetics.
  • She later established Van Thinh Phat in 1992 which grew to become one of the country’s most affluent firms.
  • Some of Van Thinh Phat’s notable projects include 39-story Times Square Saigon, the five-star Windsor Plaza Hotel, the 37-story Capital Place office building, and the five-star Sherwood Residence hotel.

Criminal Charges

  • Between 2012 and 2022, Lan was accused of using the Saigon Joint Commercial Bank (SCB) as her own personal cash cow.
  • She allegedly illegally controlled the bank and used thousands of ‘ghost companies’ in Vietnam and abroad to provide loans to herself and her allies, resulting in $27 billion in losses.

Bribes and Corruption

  • Lan’s alleged wrongdoings weren’t hidden for long.
  • SCB was part of a merger with two other lenders in 2011, following a plan coordinated by Vietnam’s central bank.
  • Lan is accused of misusing the bank and paid bribes to various government officials, including a former central official who was sentenced to life in prison for accepting a $5.2 million bribe.

Impact on the Nation

  • Lan’s actions violated the property management rights of individuals and led SCB into a “state of special control,” eroding people’s trust in the leadership of the Communist Party and state.
  • The scandal shocked the nation and raised concerns regarding similar practices in other banks or businesses, potentially damaging Vietnam’s economic reputation and unsettling foreign investors.

Anti-Corruption Drive

  • Lan’s arrest in October 2022 was one of the most high-profile incidents within an expanding anti-corruption drive led by General Secretary Nguyen Phu Trong.
  • Former President Vo Van Thuong stepped down amid involvement in the anti-graft campaign in March 2023.
  • The campaign, which is expected to be a “blazing furnace,” has raised uncertainty and heightened scrutiny as Vietnam seeks to attract companies seeking alternatives to neighboring China.