[HO CHI MINH CITY] Vietnamese real estate tycoon Truong My Lan, already on death row for other offences, was on Thursday (Oct 17) sentenced to life in prison, having also been found guilty of issuing fraudulent bonds, moving money across borders illegally and money laundering, state media reported.
The 68-year-old chairperson of the real estate empire Van Thinh Phat (VTP) and her accomplices appropriated 30 trillion dong through fraudulent bonds, illegally transferred US$4.5 billion across borders, and laundered 445.75 trillion dong.
This second trial, part of the country’s largest case of financial fraud, follows her being given the death penalty for her role in siphoning 304 trillion dong (S$16 billion) from Saigon Commercial Bank (SCB). The sum is equivalent to nearly 3 per cent of Vietnam’s GDP in 2022.
Thirty-three individuals who were tried with her in the second trial, including her husband and niece, have been handed down sentences ranging from two to 23 years of imprisonment.
The court also ruled that Lan and those linked to her must compensate the people they cheated, a sum exceeding 30 trillion dong. This is on top of her existing obligation to make good on the 677 trillion dong lost by SCB, a bank she controlled, and through which she misappropriated money through unlawful loans to shell companies between 2012 and 2022.
Back in April, she filed an appeal against the “guilty” verdict in the first trial which put her on death row, and is maintaining that she is innocent of embezzlement and bribery. She is waiting for that appeal to be heard.
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Giving a statement in tears in court last week, she was quoted by online news site VnExpress as having said: “I did not expect my life to end like this. I consider this as fate, an accident, and take responsibility.”
Junk bonds
Lan and her accomplices were found guilty of misappropriating more than 30 trillion dong raised from 25 fake bond batches issued by four companies linked to VTP between 2018 and 2020.
Those notes were sold to around 36,000 individual investors as secondary buyers; many of them, depositors at SCB, have since filed nearly 6,000 claims for damages.
Lan stated during cross-examination that she did not initiate the bond issuance plans or misappropriate the bondholders’ funds, and is committed to refunding the buyers of these bonds.
Cross-border money transfers
Funds totalling US$4.5 billion were illegally trafficked across borders, the court concluded. The sum comprised US$1.51 billion that was moved overseas, and another US$3.03 billion that was sent from other countries to Vietnam.
Fraudulent agreements of business activities such as share purchases, loans, capital contributions and consultation enabled these illicit transfers between 2012 and 2022. Altogether, 21 firms registered in Vietnam, the British Virgin Islands and Cayman Islands were implicated.
Money laundering
The court also found Lan and others guilty of laundering 445.75 trillion dong, which had been embezzled and misappropriated from SCB and bond investors.
To cover up evidence of these cash flows, she ordered SCB officers to transfer the funds among various shell companies and individuals, or to withdraw the money in cash. These funds then went into paying debts, investing in projects, paying bond interest, or other purposes, or were transferred out of the country.
Prime assets as compensation
In the second phase of the trial, the authorities seized over 408 billion dong in cash. They also froze accounts and prevented transactions worth a total of 916.7 billion dong and US$267,713, and confiscated defendants’ properties, shares and capital contributions to related firms.
Under an earlier phase of investigations, other assets linked to Lan – cash, shares, luxury cars, yachts and more than 1,000 properties – were already confiscated. These assets included high-end properties and unfinished construction projects across the country.
Lan, referring specifically to the Capital Place building in Hanoi now up for sale, said she is seeking higher-paying buyers for the Grade-A office development, so she can use the proceeds to make reparations. She believes Capital Place to be worth US$1 billion.
The case has also brought to attention other properties still caught in legal disputes involving her, including one that is linked to several Singapore-incorporated firms.
Another project that came up in the second trial was the partially-built complex previously known as The Spirit of Saigon in Ho Chi Minh City’s District 1. The property sits on 8,600 sq m of land opposite Ben Thanh Market, and has four street frontages.
In 2018, Bitexco Group, the owner of the iconic skyscraper Bitexco Financial Tower in the city, verbally agreed to sell The Spirit of Saigon to VTP for 22 trillion dong. The transaction was not completed because Lan was arrested in October 2022.
Lan, who had transferred 15.7 trillion dong to Bitexco, asked that the group refund 7 trillion, so she could use the money to meet her compensation responsibilities.
Under bond repayment pressure, Bitexco is selling its entire capital contribution for the project. Its representative asserted in court that the money it received from Lan was legal and unrelated to her crimes.