The mention of “scam” often conjures images of recent financial scandals like FTX and Theranos. However, large-scale fraud isn’t limited to specific regions, and Vietnam is currently grappling with its own “trial of the century” – a $12.5 billion real estate scam masterminded by Truong My Lan, a 67-year-old tycoon.
Lan, a self-made business woman who began selling cosmetics at 16, built a real estate empire and amassed significant wealth. However, the foundations of her fortune were allegedly built on deceit.
Accused of orchestrating one of Vietnam’s biggest scams, Lan stands trial facing the possibility of the death penalty. The scandal dwarfs past financial fiascos like FTX and even Malaysia’s 1MDB, making it one of Asia’s largest financial crimes.
Lan’s story begins with the founding of her VTP Group Real Estate Company in 1991. As her company grew, she secured loans from banks, particularly the Saigon Joint Stock Commercial Bank (SCB). From 2012, the year SCB was established and Lan became a shareholder, the bank loaned an astonishing $43 billion to Lan and her associates.
One might wonder how a bank could grant such immense sums to a single individual, especially using customer deposits. The answer lies in Lan’s control. Through a network of individuals holding shares in her name, she effectively controlled 90% of SCB, allowing her to influence how the bank spent its money. A significant portion of these funds were used to purchase bonds from Lan’s company, facilitating the embezzlement of vast amounts.
To maintain this elaborate scheme, Lan allegedly paid individuals entrusted with oversight, including 15 state bank officials, three government inspectors, and a former state audit office official. This web of deception successfully kept Vietnam’s government in the dark for almost a decade, until Lan’s arrest in 2022.
Initially, the authorities only suspected a few thousand dollars’ worth of embezzlement. However, the discovery of a diary belonging to Lan’s driver revealed meticulously documented details of ferrying around $4.4 billion in cash, exposing the true magnitude of the scam.
This revelation triggered a wider investigation, leading to the current trial expected to continue until April. Nearly 90% of those involved face charges, with some facing the potential death penalty.
Vietnam hopes this trial sends a powerful message against corruption. The nation has long wrestled with this issue, and a harsh sentence in such a high-profile case could have a significant ripple effect. However, the stain of this massive scam remains, and Vietnam has a long road ahead to rebuild trust and confidence.