When Vietnamese property tycoon Truong My Lan was sentenced to death in April for masterminding what is claimed to be the world’s biggest bank fraud, the verdict sent shockwaves through the country. Having lost her appeal this month, the 68-year-old is now in a race against time, says the BBC.
Under Vietnamese law, Lan could get her sentence commuted to life imprisonment if she can raise 75% of the $12 billion she’s convicted of embezzling from the Saigon Commercial Bank to repay victims. She urgently needs $9 billion – an eye-watering sum to raise, and with many of her assets frozen, she may have to call upon friends. She’ll soon find out if any are willing to stand by her.
During her trial, parts of which were live-streamed outside the court in Ho Chi Minh City, Lan was sometimes defiant. But in recent hearings, she has appeared more contrite. Perhaps “the gargantuan scale of the fraud” has finally sunk in, says CNN. Lan – who chairs developer Van Thinh Phat, which owns some of the most prized hotels, luxury residences and offices in the city – is the most prominent of 86 defendants (including her husband and niece) found guilty of syphoning $44 billion from the bank over more than a decade via “a web of thousands of shell companies”.
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By comparison, Malaysia’s long-running 1MDB state fund scandal, often described as one of the world’s biggest financial crimes, involved the looting of just $4.5 billion. Even crypto scammer Sam Bankman-Fried’s $8 billion fraud is “dwarfed by Lan’s case”. Her arrest in October 2022 “sparked a week-long run” on the Saigon Commercial Bank – the fifth largest in the Communist-run country. Tens of thousands lost their savings.
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Vietnam has been plagued by corruption for decades, but the “scale of the case is shocking”, Linh Nguyen, of consultancy Control Risks, told the Financial Times. “It has damaged the sentiment of not only foreign investors” but of “the business community in general”. The involvement of several central bankers and state officials hasn’t helped.
The government’s ensuing corruption crackdown, known as the “blazing furnace”, has been just as damaging – leading to “a stark slowdown in government activity”, including approvals for projects and licences, at a pivotal time for Vietnam. The country had hopes of emerging as a global manufacturing hub as Western companies shift factories away from China.
Truong My Lan's road to riches
Lan herself comes from humble beginnings. Born into a Sino-Vietnamese family in Ho Chi Minh City, she started out selling cosmetics on a market stall alongside her mother, before taking advantage of the “Doi Moi” economic reforms of the 1980s to get into property, says the London Evening Standard. A talented businesswoman with fingers in several pies, her wealth “skyrocketed” after she married Hong Kong investor Eric Chu in 1992 and founded Van Thinh Phat, says CNN. By 2011, she was “a powerful yet low-profile business figure in Ho Chi Minh”. That changed when Lan became involved in the merger of three struggling banks to form the Saigon Commercial Bank, later assuming effective control via illegal proxies. “She was well on her way to riches, high status and, eventually, infamy.”
Lan’s manipulation of the banking system continued for a decade before the scam was uncovered when Vietnam’s property bubble burst and the bad loans started stacking up. When state auditors discovered the fraud, she attempted to bribe them into silence, says the FT. “Because of this case, the dreams, hopes and physical strength of myself and dozens of people here have been affected. That was the most terrible experience for me,” she said during the appeal hearing. But attempts to portray herself as the victim of a witch hunt have fallen on deaf ears. At best, she now faces the rest of her life behind bars.
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