A 68-year-old rags-to-riches real estate tycoon is sitting in a jail cell in Ho Chi Minh City, Vietnam running a $9 billion race with death.
Truong My Lan lost her appeal in early December to avoid a death sentence that was imposed in April when she was convicted of orchestrating one of the biggest bank frauds in world history. She was found guilty of embezzlement, bribery, and violation of banking rules.
She was arrested at her residence in the five-star Sherwood Residence hotel, which her company owned, in October 2022. News of her apprehension triggered a run on the Saigon Joint Stock Commercial Bank (SCB). Lan owned over 90 percent of SCB and used it like an unlimited ATM, according to prosecutors.
Lan’s fraud totaled $12.5 billion, according to the charges against her. That equaled three percent of Vietnam’s gross domestic product (GDP) in the year of her arrest. Losses to individual bank customers are estimated at $27 billion, according to the Economic Times.
Under Vietnamese law, a criminal who returns 75 percent of stolen money or goods can avoid lethal injection.
Fast and Furious
The former mogul is working diligently to try and raise the $9 billion that would convert her death sentence to life in prison, according to her lawyers. However, getting the best price for the sale of assets has proven difficult.
“The total value of her holdings actually exceeds the required compensation amount,” Lan’s attorney Nguyen Huy Thiep told the BBC.
“However, these require time and effort to sell, as many of the assets are real estate and take time to liquidate. Truong My Lan hopes the court can create the most favorable conditions for her to continue making compensation,” Thiep said before Lan’s appeal was rejected.
Lan has also been reaching out to friends in an effort to get loans, according to the BBC.
So far, the government has seized over 1,000 properties owned by Lan and her firms.
In the United States and many other countries, someone convicted of a capital crime is given a specific date for execution. Yet, in Vietnam, death sentences may not be carried out for years. As a result, a prisoner may not know their execution date until days beforehand.
Engineering Fraud
At the time of her arrest, Lan was chair of Van Thinh Phat, one of the largest real estate development companies in Vietnam.
The fraud she directed involved her operation of SCB from 2012 to 2022.
Lan forged the merger of SCB with two other lenders. SCB had been struggling at the time and the merger was overseen by Vietnam’s central bank.
An individual can only own five percent of a bank under Vietnamese law. However, Lan got around that by forming shell companies, using proxies, and bribing government officials. Consequently, prosecutors allege she ended up owning 91.5 percent of the bank.
One government official now serving a life sentence in the case was convicted of taking $5.2 million in bribes.
All in the Family
A fraud as vast as the one Lan operated requires dozens of players. In total, 86 people, including Lan, have been tried on charges relating to the SCB swindle. All were accused of setting up fake loan applications. Subsequently, all but Lan received sentences ranging from three years probation to life in prison.
Fellow fraudsters included Lan’s husband Eric Chu Nap-Kee, a Hong Kong real estate investor. He received a nine-year sentence.
Early last year, Nap-Kee began selling properties in an effort to save his wife’s life. In February he sold the Nexus Building, a prime office building in the heart of downtown Hong Kong, according to the Vietnam Investment Review. The sale brought in HK$6.4 billion (approximately $820 million U.S.). As late as 2022, the building was valued at HK$9 billion (just over $1.155 billion U. S.).
Another family member convicted in the case was Lan’s niece Truong Hue Van. She was raised by Lan and served as CEO of Van Thinh Phat. Her sentence was 17 years in jail.
Blazing Furnace
Lan and her cohorts were prosecuted under a government anti-corruption campaign entitled Blazing Furnace.
With Nguyen Phu Trong’s ascension to general secretary of the Vietnam Communist Party (VCP) in 2016, efforts to stamp out corruption have increased.
Those efforts were aided by the bursting of Vietnam’s real estate bubble. That resulted in bad loans to Lan’s companies and those of her puppets being exposed.
Rags to Riches to Ruin
If Lan had gained her wealth in the United States, she would probably be called a Horatio Alger story, because she rose from humble origins.
She began her entrepreneurial career selling cosmetics with her mother. They worked out of a stall in her hometown of Ho Chi Minh City’s oldest market.
Her venture into real estate began soon after the VCP instituted economic reforms in 1986. Dubbed the Doi Moi, which means renovation, these reforms moved the country from a centrally planned economy to a socialist modified market economy. That opened the door to more private and foreign investment as well as the influence of market forces.
Within a few years of Doi Moi, Lan had built a sizable portfolio of real estate including hotels and restaurants. However, things really took off when she met Nap-Kee. By 1992 they were in love and in business. She founded Van Thinh Phat and the pair were married that year.
Van Thinh Phat continued to grow, adding luxury apartment buildings, office buildings, and shopping centers to its holdings. As a result, Lan became one of the wealthiest and most influential financial figures in her country.
Through it all, she maintained a low profile. Nevertheless, that and almost everything else in her life changed with her arrest in October 2022.
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