HANOI, Vietnam — The death penalty for real estate mogul Truong My Lan was confirmed on Tuesday in connection with Vietnam’s most significant fraud case, which has raised alarms regarding the state of the nation’s economy.
Lan was found guilty of embezzlement and bribery in April, in a case involving fraud totaling $12.5 billion, equating to nearly 3% of Vietnam’s GDP in 2022. As the chairperson of the Van Thinh Phat real estate company, she unlawfully exerted control over Saigon Joint Stock Commercial Bank between 2012 and 2022, facilitating 2,500 loans that resulted in a staggering $27 billion in losses for the bank.
In a ruling from a court in Ho Chi Minh City, Lan’s appeal against her conviction was denied, though it was noted that her death sentence could potentially be changed to life imprisonment if she repays three-quarters of the incurred losses, according to reports. The court highlighted that her actions negatively impacted the banking sector, instigated public chaos, and diminished trust among the populace, as summarized by state media.
Her arrest formed part of an extensive anti-corruption initiative in Vietnam, which gained momentum following 2022. This campaign, often referred to as the Blazing Furnace, has reached into the highest levels of political power in the country. The massive nature of her fraudulent activities shocked many, raising suspicions regarding similar misconduct in other financial institutions or corporations.
This situation has contributed to a more cautious economic outlook for Vietnam, creating unease among foreign investors, particularly as the country seeks to establish itself as a favorable destination for businesses looking to relocate supply chains from China.
At 67 years old, Lan, along with her family, founded the Van Thinh Phat company in 1992, following Vietnam’s transition to a market-oriented economy that welcomed foreign investment. Over the years, the firm evolved into one of the wealthiest real estate companies in Vietnam, developing luxury residential complexes, office spaces, hotels, and shopping centers.
Lan became a significant figure in Vietnam’s financial landscape, overseeing the 2011 merger of the struggling SCB bank with two other financial institutions in collaboration with the central bank of Vietnam. The court observed that she exploited this merger to secure funding from SCB and, according to official records, she possessed more than 90% ownership of the bank while sanctioning thousands of loans to fictitious companies.
According to state media outlets, these loans ultimately flowed into her personal network, facilitated by bribes paid to officials to erase her wrongdoing.
Due to the enormity of the offenses, the case was split into two separate trials, resulting in an additional life sentence handed down to Lan in October. During this trial, she was accused of illegally raising $1.2 billion from approximately 36,000 investors through bond issuance across four companies, as reported by state media.
Moreover, she was convicted of misappropriating $18 billion obtained through fraudulent activities and utilizing her controlled firms to unlawfully transfer over $4.5 billion in and out of Vietnam from 2012 to 2022.