Vantage | What's the $12 bn scam that has taken Vietnam by storm?

Scams, unfortunately, have become almost synonymous with certain industries or individuals in recent times. From cryptocurrency controversies to corporate frauds, the term “scam” triggers various images and stories in people’s minds. While names like FTX, Sam Bankman-Fried, Theranos, Elizabeth Holmes, Bernie Madoff, WorldCom and Enron often dominate the narrative, massive scams are not exclusive to the United States. In Asia, too, such fraudulent activities have been on the rise, catching up with global counterparts.

One of the latest additions to the list of massive scams comes from Vietnam. A trial that commenced recently sheds light on a staggering $12.5 billion real estate scam. At the centre of this scandal is Truong My Lan, a prominent figure in Vietnam’s business landscape.

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Truong My Lan: Rise and fall of a real estate tycoon

Truong My Lan, a 67-year-old real estate tycoon, began her journey in the business world at the age of 16, selling cosmetics. Over the years, she amassed significant wealth and eventually gained control over 90 percent of a bank, along with establishing a real estate empire. However, her success story took a dark turn when allegations of fraudulent activities surfaced.

The trial of Truong My Lan is being dubbed as the “trial of the century” in Vietnam. Despite her fame, Vietnamese state-run television has chosen to blur her face, reflecting the gravity of the accusations against her. The trial aims to uncover the truth behind what could potentially be one of the largest scams in Vietnam’s history.

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Truong My Lan stands accused of orchestrating a scheme that amounts to nearly $12.5 billion, surpassing even some of the most infamous scams worldwide. The modus operandi allegedly involved manipulating a bank, the Saigon Joint Stock Commercial Bank (SCB), where Lan had a significant stake. Through a network of associates, Lan purportedly gained control over the bank, allowing her to siphon off funds for her personal gains.

Intricacies of the scam

The intricate web of deception included obtaining loans worth billions of dollars from SCB, which were then funneled into Lan’s ventures. Additionally, Lan allegedly paid off individuals tasked with oversight, ensuring her fraudulent activities remained undetected for nearly a decade.

Despite Lan’s arrest in 2022, the full extent of the scam only came to light when her personal driver’s diary revealed staggering amounts of cash ferried around the city. The subsequent widening of the investigation led to the current trial involving numerous individuals including state bank officials and government inspectors.

The trial, expected to last until April, carries significant implications for Vietnam’s fight against corruption. With nearly 90 people charged, including the possibility of some facing the death penalty, the outcome of this case could serve as a deterrent against future fraudulent activities. However, it also highlights the challenges Vietnam faces in restoring trust and confidence in its financial and regulatory systems.

The Truong My Lan scandal serves as a stark reminder of the pervasive nature of fraud and corruption, not only in Vietnam but across the globe. As the trial unfolds, it remains to be seen how justice will be served and what measures will be taken to prevent similar incidents in the future. For now, Vietnam grapples with the fallout of one of its most significant financial scandals, hoping to emerge stronger and more resilient in its battle against corruption.

Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect Firstpost’s views.