The biggest fraud case in history: billionaire Truong My Lan's fateful end

Truong My Lan, chairwoman of real estate giant Van Thinh Phat Holdings Group and billionaire, was sentenced to death sentence on April 11, 2024. She is accused of being involved in an elaborate fraud scheme amounting to 304 billion dong (about 12.5 billion dollars or 11.5 billion euros).

It all started within the framework of a campaign that began in 2016, led by the general secretary of the communist party, Nguyen Phu Trong, a fervent defender of the belief that rampant corruption creates a serious threat to the Communist Party.

Truong My Lan forged an impressive path over the years. Starting as a cosmetics seller in a market, she knew how to capitalize on the period of economic reform of the Communist Party in 1986, called Doi Moi, to enter the world of real estate investment.

Taking advantage of Saigon, now Ho Chi Minh City's status as the country's commercial center from its days as the capital of South Vietnam, Truong My Lan ventured into and consolidated her position as the owner of a broad portfolio of hotels and restaurants in the 1990s. As wealth accumulated, corruption increased due to state control over land ownership.

But her career didn't stop there. In 2011, she further cemented her status as a business leader by spearheading the merger of three financially troubled banks, creating the powerful entity known today as Saigon Commercial Bank.

Currently, he faces capital punishment. The sentence was handed down by Ho Chi Minh Court judges, who found the defendant guilty on charges including bribery, violation of banking regulations and embezzlement in a fraudulent scheme that spanned a decade. This information was reported by the media VN Express.

The businesswoman, arrested in 2022, had no official position in the bank and only owned 4% of the shares. However, she exercised dominant control by indirectly controlling up to 91% of the actions through individuals she trusted, who followed her instructions, according to an article by the EFE agency.

According to the investigation, she then diverted large sums of money through some 2,500 loans to fictitious companies between 2012 and 2022.

Truong My Lan also faced accusations of bribery to avoid inspection of her loans. A senior Central Bank official is also on trial for receiving a five million dollar bribe, according to BBC News.

According to the EFE agency, the Prosecutor's Office stated that the damages caused by fraud amount to 27,000 million dollars (25,180 million euros), which represents six percent of the country's GDP in 2023.

The communist authorities were surprisingly transparent in this case. According to reports, 2,700 people were summoned to testify, and 10 state prosecutors and approximately 200 lawyers participated. The evidence, contained in 104 boxes weighing six tons in total, was presented to the court. At the trial, 85 defendants were tried alongside Truong My Lan, who denied the charges against him.

Some of the consequences have been the resignation of the president, Vo Van Thuong (in the photo), after being involved in "irregularities", although the authorities did not specify the accusations. In 2023, his predecessor in office, Nguyen Xuan Phuc, also resigned. In addition, the case of Do Thi Nhan, a former Central Bank official, who was sentenced to life imprisonment for accepting a bribe of $5.2 million, has been highlighted.

David Brown, a retired US State Department official with extensive experience in Vietnam, maintains that Truong My Lan was backed by influential figures who have exercised control over Ho Chi Minh's business and political circles for decades, according to a report in a BBC News article. In the photo, one of the properties of real estate magnate Truong My Lan.

Brown also comments: "The goal of Nguyen Phu Trong and his allies in the party was to regain control of Saigon or, at least, prevent it from slipping from their hands. Until 2016, the party in Hanoi allowed this network of Chinese-Vietnamese influence to maintain control. Although the local communist leaders appeared to follow party guidelines, in reality they were exploiting the city for personal gain."

Nguyen Phu Trong, who is expected to retire from office in 2026, has consolidated the communist party's conservative power and set ambitious economic goals through 2045, including a partnership with the United States. However, this approach also increases the risk of corruption, creating tensions between party control and economic development.

This is the "paradox," says one expert. The growth model has been linked to corruption for a long period. If this factor is removed, what will happen to the system that has depended on it to function?