Vietnamese real estate magnate found guilty of billions in fraud in crackdown on government subsidies

HANOI, Vietnam — A Vietnamese real estate magnate was convicted Thursday of fraudulently acquiring properties worth billions of dollars in a case at the center of the government’s crackdown on corruption.

Truong My Lan was convicted in a separate case in April by the same court in Ho Chi Minh City of fraud amounting to US$12.5 billion – almost 3% of the country’s gross domestic product – and sentenced to death by of a lethal injection.

The trials were split into two parts due to the large number of allegations against her, and Thursday’s verdict, which carries a maximum prison sentence of life in prison, adds to Lan’s legal troubles as she awaits the hearing of the appeal against her death sentence.

Vietnam has handed down more than two thousand death sentences and executed more than four hundred prisoners in recent decades. It is a possible punishment for 14 different crimes, but is usually only applied in cases of murder and drug trafficking.

“It is too high a price for me to stand here today. I consider this my fate and a career accident,” online newspaper VNexpress quoted Lan, the chairman of property developer Van Thinh Phat, telling the judges in its closing statement last week.

“For the rest of my life, I will never forget that my actions affected tens of thousands of families.”

Thirty-three others were tried as co-defendants in the case, but details of the other verdicts were not immediately available. Lan’s sentence was expected to be announced later in the day.

In addition to obtaining property through fraud, Lan was also convicted of money laundering and illegal cross-border money transfers, according to state media.

According to state media reports, she was accused of raising $1.2 billion from nearly 36,000 investors by illegally issuing bonds through four companies.

She was also found guilty of siphoning $18 billion obtained through fraud and using companies she controlled to illegally transfer more than $4.5 billion to and from Vietnam between 2012 and 2022.

It was not immediately clear whether Lan would appeal the verdict and no date has yet been set for when her appeal against her death penalty conviction will be heard.

The April conviction found that she orchestrated a $12.5 billion financial fraud for illegally controlling a major bank that granted loans that led to losses of $27 billion, according to state media reports.

Lan’s arrest in October 2022 was one of the most high-profile in an ongoing fight against corruption in Vietnam, which has intensified since 2022.

The Communist Party’s “blazing furnace” campaign has also hit the highest echelons of Vietnamese politics.

Former President Vo Van Thuong resigned in March after his involvement in the campaign. Since 2016, thousands of party officials have been disciplined, including former president Nguyen Xuan Phuc and former parliament head Vuong Dinh Hue, both of whom have resigned.

A total of eight members of the powerful Politburo have been ousted over corruption charges, compared to none between 1986 and 2016.

The fight against corruption began in 2013, but it was only in 2018 that authorities began scanning the private sector. Since then, several owners of Vietnam’s fast-growing companies have been arrested.

The campaign was the hallmark of Communist Party General Secretary Nguyen Phu Trong, Vietnam’s top politician. who died earlier this year at the age of 80.

The ideologue had called corruption a serious threat to the party and promised that the campaign would be a “blazing furnace” in which no one was untouchable.

In another high-profile case, business magnate Trinh Van Quyet was found guilty in August of defrauding shareholders of nearly $150 million by falsely inflating the value of his company.

The Hanoi People’s Court sentenced Quyet to 21 years in prison and convicted 49 co-defendants on a variety of charges, with sentences ranging from probation to several years in prison.

Lan and her family founded the Van Thinh Phat company in 1992 after Vietnam transitioned from a state-run economy to a more market-oriented approach open to foreign investors. She started helping her mother, a Chinese entrepreneur, sell cosmetics at Ho Chi Minh City’s oldest market, state media outlet Tien Phong said.

Van Thinh Phat became one of Vietnam’s wealthiest real estate companies, with projects including luxury residential buildings, offices, hotels and shopping centers. This made her a major player in the country’s financial sector.

Lan’s first trial shocked many Vietnamese.

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

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Riot reported from Bangkok.