Vietnam's real estate tycoon sentenced to death for $27b fraud case

In a landmark trial that has reverberated across Vietnam, Truong My Lan, a prominent figure in the country’s real estate sector, has been condemned to death for her central role in what authorities describe as one of the largest corruption scandals in history. The verdict was delivered in Ho Chi Minh City, where Lan, the chair of Van Thinh Phat, a major developer, was found culpable for orchestrating a scheme that led to an estimated $27 billion in losses, primarily through embezzlement from Saigon Commercial Bank (SCB).

Lan’s ascent to prominence began with the establishment of Van Thinh Phat in 1992, which swiftly expanded its portfolio to encompass upscale hotels, restaurants, luxury apartments, and financial ventures, concentrating particularly in prime areas of Ho Chi Minh City. Investigators uncovered a sprawling network of over 1,000 businesses associated with Van Thinh Phat, including phantom companies and overseas interests, underscoring the scale of Lan’s operations.

The modus operandi of Lan’s illicit activities involved a sophisticated interplay of bribery, banking infractions, and embezzlement. Over a decade-long span, from 2012 to 2022, Lan siphoned $12.5 billion from SCB, leveraging her majority stake in the bank to fabricate loan applications and redirect funds to fictitious entities under her control. Her manipulation extended to the exploitation of a government initiative to restructure SCB, effectively turning the institution into a financial conduit to fuel her illegal ventures.

The fallout from Lan’s machinations extended far beyond the confines of her enterprise, ensnaring over 40,000 SCB bondholders who were unwitting victims of her fraudulent activities. Complicity among high-ranking officials further exacerbated the crisis, with former employees of the State Bank of Vietnam implicated in accepting substantial bribes to conceal SCB’s financial irregularities. Notably, Do Thi Nhan, the erstwhile head of the central bank’s inspection team, received a life sentence for accepting bribes amounting to $5.2 million.

Lan’s exposure and subsequent prosecution were emblematic of Vietnam’s intensified crackdown on corruption, spearheaded by Communist Party General Secretary Nguyen Phu Trong. This sweeping anti-corruption campaign, dubbed the “blazing furnace,” has yielded over 4,400 indictments across more than 1,700 graft cases since its inception in 2021. While lauded for its commitment to upholding the rule of law, the campaign has also engendered economic apprehension, with some foreign investors expressing unease amidst the upheaval in Vietnam’s business landscape. Despite such reservations, Trong remains resolute in his call for an accelerated purge of corruption from the nation’s ranks.