By Eric Vandenbroeck and co-workers

The Biggest Bank Fraud in the World

Her arrest was among the most high-profile in an anti-corruption drive in Vietnam that intensified after 2022. The Blazing Furnace campaign touched the highest echelons of Vietnamese politics. But the scale of her fraud shocked the nation with analysts raising questions about whether other banks or businesses had similarly erred.

This dampened Vietnam’s economic outlook and made foreign investors jittery at a time when Vietnam has been trying to position itself as a home for businesses pivoting their supply chains away from China.

Lan, 67, and her family set up the Van Thing Phat company in 1992 after Vietnam shed its state-run economy in favor of a more market-oriented approach open to foreigners. The company grew into one of Vietnam’s richest real estate firms, with luxury residential buildings, offices, hotels, and shopping centers.

This made her a key player in the country’s financial industry. She orchestrated the 2011 merger of the beleaguered SCB bank with two other lenders in coordination with Vietnam’s central bank. The court said that she used this to tap SCB for cash and, according to government documents, owned more than 90% of the bank while approving thousands of loans to “ghost companies.” These loans, according to state media, found their way to her and she bribed officials to cover her tracks.

When the trial got underway Fraud victims were standing outside:

The scale of the crime meant the case was split into two trials, and Lan was sentenced to another life sentence in October. At that trial, she was accused of raising $1.2 billion from nearly 36,000 investors by issuing bonds illegally through four companies, state media reported.

She was also found guilty of siphoning off $18 billion obtained through fraud and for using companies controlled by her to illegally transfer more than $4.5 billion in and out of Vietnam between 2012 and 2022.

In April, the trial court found that Truong My Lan had secretly controlled Saigon Commercial Bank, the country’s fifth biggest lender, and taken out loans and cash over more than 10 years through a web of shell companies, amounting to a total of $44bn.

Her arrest in 2022 prompted a run on SCB, one of the country’s largest private banks. About 36,000 people have been identified as victims of the fraud, which shocked the communist nation and prompted rare protests.

She stole our money the crowd says:

She had been convicted in April of embezzlement and bribery over the fraud amounting to $12.5 billion, nearly 3% of Vietnam’s 2022 GDP. As chairperson of her real estate firm, Lan illegally controlled a bank and allowed loans that cost it $27 billion in losses. The court Tuesday rejected her appeal against the conviction while adding that her death sentence could be commuted to life if she reimbursed three-fourths of the losses.

The crowd outside demanded to get into the courtroom:

The 68-year-old is one of the most famous business executives and state officials jailed in the communist country’s lengthy anticorruption campaign known as “Blazing Furnace”, which has intensified since 2022, netting several business executives, government officials and members of the police and armed forces.

Hothy Han is one of more than 35,000 thousand people affected:

She entrusted the bank with half a million Dollars, it was her life savings:

Under Vietnamese law, death sentences aren’t immediately carried out and there is an extended legal process, said Nguyen Khac Giang, a visiting fellow in the Vietnam Studies Program at Singapore’s ISEAS–Yusof Ishak Institute. He added that Lan would 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 said. During her trial Truong My Lan was sometimes defiant, but in the recent hearings for her appeal against the sentence she was more contrite.

 

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