Death Sentence Upheld for Real Estate Tycoon Truong My Lan in Vietnam's Largest Fraud Case
The death sentence for real estate tycoon Truong My Lan was upheld in Vietnam’s largest fraud case, raising concerns about the country’s economic stability and investor confidence.
Real EstateFraudTruong My LanVietnamEconomyReal Estate NewsDec 03, 2024
Lan illegally controlled the Saigon Joint Stock Commercial Bank (SCB) between 2012 and 2022, approving 2,500 loans that led to $27 billion in losses. The Ho Chi Minh City court rejected her appeal, stating that her death sentence could be commuted to life if she reimburses three-fourths of the losses, which amounts to about $11 billion, according to state media.
Her lawyers argued that Lan had already repaid the money, but the court disagreed, citing legal issues with the seized properties and the inability of prosecuting agencies to assess their value. The legal team also highlighted several mitigating factors, including her admission of guilt, show of remorse, and partial repayment of the misappropriated funds. “I feel pained due to the waste of national resources,” Lan stated last week, as reported by state media.
However, the court maintained that her actions had severe negative impacts on the banking sector, caused public disorder, and eroded public trust. Under Vietnamese law, death sentences are not immediately carried out and are subject to an extended legal process. Nguyen Khac Giang, a visiting fellow at the Vietnam Studies Program at Singapore’s ISEAS–Yusof Ishak Institute, noted that Lan might seek another review of the case or a presidential pardon to reduce her sentence. “Moreover, if she repays at least three-quarters of the misappropriated funds, the court may consider commuting her sentence to life imprisonment,” he added.
Lan’s arrest was one of the most high-profile in Vietnam’s intensified anti-corruption drive, known as the “Blazing Furnace” campaign, which began after 2022 and has reached the highest echelons of Vietnamese politics. The scale of her fraud, however, has shocked the nation and raised questions about potential similar practices in other banks and businesses. This has dampened Vietnam’s economic outlook and made foreign investors cautious, particularly as the country aims to position itself as an attractive destination for businesses looking to pivot their supply chains away from China.
Truong My Lan, now 67, and her family established the Van Thinh Phat company in 1992, following Vietnam’s shift from a state-run economy to a more market-oriented approach. The company grew to become one of Vietnam’s wealthiest real estate firms, with a portfolio that includes luxury residential buildings, offices, hotels, and shopping centers. This growth made her a key player in the country’s financial industry. In 2011, she orchestrated the merger of SCB with two other lenders, with the support of Vietnam’s central bank, using this position to tap the bank for cash and approve loans to “ghost companies.”
The massive fraud led to two separate trials. In October, Lan was sentenced to another life sentence for raising $1.2 billion from nearly 36,000 investors through illegal bond issuance across four companies. She was also found guilty of siphoning off $18 billion through fraud and illegally transferring more than $4.5 billion in and out of Vietnam between 2012 and 2022.
Vietnam has handed down more than 2,000 death sentences in the past decade and has executed over 400 prisoners. The death penalty is typically applied in cases of murder and drug trafficking, but the scale of Lan’s fraud has set a precedent in the country’s legal system.
Frequently Asked Questions
What is the scale of Truong My Lan's fraud?
Truong My Lan's fraud amounted to $12.5 billion, nearly 3% of Vietnam’s 2022 GDP, and involved illegal control of the Saigon Joint Stock Commercial Bank and the approval of 2,500 loans that led to $27 billion in losses.
Can Truong My Lan's death sentence be commuted to life imprisonment?
Yes, the court stated that her death sentence could be commuted to life imprisonment if she reimburses three-fourths of the losses, which amounts to about $11 billion.
What was Truong My Lan's role in the Vietnamese real estate industry?
Truong My Lan was the chairperson of Van Thinh Phat, one of Vietnam’s wealthiest real estate firms, with a portfolio that includes luxury residential buildings, offices, hotels, and shopping centers. She was a key player in the country’s financial industry.
How did Truong My Lan's case impact Vietnam's economy and foreign investment?
The scale of her fraud has raised concerns about the stability of Vietnam’s financial sector, dampened the country’s economic outlook, and made foreign investors cautious, particularly as Vietnam aims to attract businesses pivoting their supply chains away from China.
What is the 'Blazing Furnace' campaign in Vietnam?
The 'Blazing Furnace' campaign is an intensified anti-corruption drive in Vietnam that began after 2022 and has reached the highest echelons of Vietnamese politics. Truong My Lan’s arrest was one of the most high-profile cases under this campaign.
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