HANOI, Vietnam (AP) — A court in Ho Chi Minh City, Vietnam convicted real estate tycoon Truong My Lan to death on Thursday in the largest financial fraud case in the country’s history, according to state media Vietnam Net.
The 67-year-old chair of Van Thinh Phat, a prominent real estate company, was found guilty of being involved in a fraud scheme amounting to $12.5 billion, nearly 3% of the country’s GDP in 2022.
During her time as head of Saigon Joint Stock Commercial Bank from 2012 to 2022, Lan reportedly oversaw 2,500 loans that led to $27 billion in losses for the bank, as reported by state media VnExpress. The court ordered her to compensate the bank with $26.9 million.
Despite Lan’s philanthropic activities and it being her first offense, the court justified its severe judgment due to the deliberate and complex nature of the criminal activity. The court stated that Lan’s actions severely impacted the trust in the government and party leadership, according to VnExpress.
Additional individuals involved in the case included Lan’s niece, Truong Hue Van, who was sentenced to 17 years in prison for aiding her aunt, and Lan’s husband, Eric Chu Nap-kee, who received a nine-year prison term.
The roots of Lan’s empire can be traced back to the establishment of Van Thinh Phat in 1992, following Vietnam’s move towards a market-oriented economy that welcomed foreign investors. Starting from humble beginnings assisting her mother in selling cosmetics, Lan grew Van Thinh Phat into one of Vietnam’s wealthiest real estate companies, involved in constructing luxury residences, offices, hotels, and shopping centers.
The court discovered that Lan exploited her position to illicitly obtain funds from SCB by approving loans to ‘ghost companies.’ These loans funneled back to her through bribery of officials, leading to her arrest in October 2022.
The trial of Lan and her associates sent shockwaves through the nation, raising concerns about potential widespread corruption in Vietnam’s financial sector and its impact on the economy. The ongoing anti-corruption campaign in Vietnam has revealed the extent of fraudulent activities at the highest levels of government, causing unease among foreign investors.
As a result of these revelations, the real estate sector in Vietnam has faced significant challenges, with numerous firms exiting the market and developers resorting to discounts and incentives to attract buyers. The aftermath of Lan’s case has cast a shadow over Vietnam’s economic outlook, particularly as the country aims to position itself as an attractive location for businesses seeking to diversify their supply chains.
In a November statement, Communist Party General Secretary Nguyen Phu Trong emphasized the ongoing commitment to combating corruption in Vietnam, highlighting that the impact of such criminal activities will be felt for the foreseeable future.