In a shocking legal decision, Truong My Lan, a Vietnamese billionaire and a prominent real estate tycoon, was sentenced to death in Ho Chi Minh City, Vietnam for orchestrating an extensive financial fraud, identified as the largest in Vietnam’s history.
Lan was charged with fraud amounting to $12.5 billion, nearly 3% of the country’s 2022 GDP.
Lan, 67, misappropriated funds from the Saigon Joint Stock Commercial Bank, which she covertly controlled, causing a loss estimated at $27 billion over a decade. The court ruled that her actions severely damaged public trust in the nation’s financial systems and governance and asked her to compensate the bank $26.9 million.
Lan, the chair of the Van Thinh Phat real estate conglomerate, was convicted for her role in the complex scheme that spanned from 2012 to 2022. The scheme involved the approval of thousands of loans to phantom companies, leading to losses that are feared to be unrecoverable. The severity of her crimes resulted in the death penalty, underscoring Vietnam’s intensified anti-corruption efforts over the past two years, targeting high-profile figures to restore integrity in various sectors.
After the verdict, Lan broke down in tears and said, it was “due to my lack of understanding of legal matters,” that she “did the wrong things.”
Lan, of Chinese-Vietnamese descent and hailing from Cholon, Saigon’s predominantly Chinese quarter—still often referred to by its historic name, Ho Chi Minh City—initiated her entrepreneurial journey by selling beauty products at a local market stall alongside her mother. During the 1990s, her ambitions grew as she ventured into the real estate market, acquiring dining establishments and hospitality venues.
Alongside her spouse, Eric Chu Nap Kee—a Hong Kong-based magnate in the property sphere—she stood accused with a group of 85 conspirators. This group, a diverse collection of legal professionals and financial overseers from Vietnam’s capital, Hanoi—known as the bastion of the nation’s communist governance—faced numerous legal allegations.
Lan’s niece, the CEO of Van Thinh Phat, received a 17-year prison term for her complicity. Furthermore, a former central bank official implicated in the scandal was sentenced to life in prison for accepting bribes. Authorities seized over 1,000 properties and substantial cash amounts linked to the fraudulent activities of Lan and her network.
Seventy individuals were incarcerated alongside Lan and her spouse in a maximum-security facility located to the northwest of the city, in proximity to the former U.S. stronghold at Cu Chi, which served as the command center for the U.S. Army’s 25th Infantry Division during the war, and a tunnel network that currently welcomes visitors.
Ten individuals are confined to their homes under surveillance while five evade capture, receiving broadcasts encouraging them to surrender. The judgments regarding the entirety of the accomplices involved remain undisclosed.
During the trial, evidence presented showed how Lan exploited her influence over the Saigon Joint Stock Commercial Bank, channeling funds to shell companies across Vietnam, Hong Kong, and Singapore. This manipulation not only enriched her personally but also destabilized the bank, jeopardizing the stability of Vietnam’s banking system.
Despite her defense team’s claim that Lan only held a minority stake in the bank and had no official banking role, testimonies from major shareholders revealed that she effectively controlled more than 90% of the bank through proxies, establishing her as the de facto owner. Her defense, which highlighted her limited understanding of legal and banking operations, was insufficient to influence the court’s harsh verdict.
The scale and sophistication of Lan’s fraudulent activities dwarfed previous financial scandals in Vietnam, drawing significant domestic and international attention. The trial spotlighted the ongoing challenges Vietnam faces in combating corruption within its elite circles.
The case reflects the Vietnamese government’s stringent anti-corruption drive under the leadership of the Communist Party of Vietnam. This drive aims to reform the country’s international image and fortify public trust in its leadership and economic stability.
The implications of this trial resonate beyond Lan and her immediate circle, emphasizing the urgent need for enhanced oversight and transparency within Vietnam’s financial institutions. The case has likely set a precedent for how future offenses of a similar magnitude will be handled, potentially altering governance and business practices throughout the country.
