The Billion-Dollar Fraud
Did you know? In Vietnam, it's possible to buy your way off death row. Let me explain. If you embezzle enough money there, the punishment isn't just prison time; it's death. And this Vietnamese billionaire has been sentenced to die.
Truong My Lan was the mastermind behind the scheme to defraud the Saigon Commercial Bank of more than $12 billion.
A property tycoon has been sentenced to death in the country's biggest-ever financial fraud case.
She was found guilty of siphoning from one of the country's biggest banks, hundreds of trillions of dong—the local currency—worth nearly 17 billion Canadian dollars. She tried to appeal her death sentence, and she lost. But there is a way out. It involves scraping together billions of dollars as quickly as possible.
To commute that death sentence into life imprisonment, she has to raise 75% of the $12 billion.
Yes, if she can pay back most of what she stole, she doesn't have to die. So how likely is she to win her survival? And how did she get all that money in the first place? The crimes of Truong My Lan have been called one of the greatest bank frauds the world has ever seen, and it all started with a bank. She helped create three banks strapped for cash, merged with her oversight to create the Saigon Joint Stock Commercial Bank. Now, she didn’t own that. There's actually a Vietnamese law that prohibits any individual from owning more than 5% of a bank's shares. So, according to prosecutors, she faked her way into near-complete ownership. Hundreds of shell companies and people acted as her proxies, buying altogether more than just a controlling interest. By the end, Truong My Lan owned more than 90% of Saigon Commercial Bank. Then, according to the evidence, she appointed her own people as managers, who would then go on to approve billions of dollars in loans to all of those shell companies that she had set up. Those loans added up to about 93% of all the bank's lending.
She had so much money that she was paying off all of the state regulators who should have been sounding alarms about the way in which she was controlling the bank. This went on for more than 10 years. Prosecutors figure about $27 billion USD was misappropriated.
For context, that's about 6% of the country’s GDP. Of that amount, she was found to have embezzled around $12 billion, and repaying most of that back is the price for her survival.
The Fight Against Corruption
You might be wondering why Vietnam has such a harsh punishment for what is really just a white-collar crime.
One Vietnamese academic put it to me very well. She said, "In Vietnam, money is God."
Vietnam has seen incredible economic growth in the last 10 years. That's wild, right? Vietnam has been called the next China, but historically, corruption has been a big part of doing business there. It is a widely accepted feature, not a bug, of many systems, including the Vietnamese.
The government is trying to keep total political control over an increasingly wealthy and ambitious population. But they cannot afford to stop the engine of the economy. They are addicted to growth, and with growth in Vietnam comes corruption. It's a dilemma that they haven't solved, but they're trying. Hundreds of officials, even presidents—plural—have been caught up in a massive national crackdown, hence making an example of Truong My Lan, who stole an unbelievable amount of money. The only thing more important than punishing her is getting that money back.
People were panicking. They were pulling their money out of her bank. People were starting to worry that other banks might be affected, so getting the money back makes an awful lot of sense. They've given her the best possible incentive to do that.
A key section of Vietnam's criminal code, Article 40, makes clear that corruption-related crimes are punishable by death. But much earlier in the code, it states that leniency shall be shown towards criminals who voluntarily compensate for the damage they inflict. And in the case of a billionaire who stole billions from the people, from the country—they want the money back. This was an enormous fraud.
The Communist Party leadership has built its legitimacy on economic performance, and the fact that corruption has been so rampant, so widespread, directly challenges its claim to this performance-based legitimacy.
It was such a spectacular fraud that they had to make an example of her, and I think they will make her sweat on death row for a while.
For as long as Truong My Lan is alive, she will be singularly focused on raising the required 75% of the amount stolen—$12 billion USD, which is around $9 billion. So now, the billion-dollar question is: Can she?
The Race Against Time
Many years ago, Truong My Lan founded a real estate firm called Van Thinh Phat (VTP for short). It was among the country's richest real estate firms, with a portfolio full of hotels, shopping centers, office buildings, and luxury properties. One of Ho Chi Minh City's tallest buildings, Saigon Times Square, was among them.
She was almost a queen in Ho Chi Minh City, in Saigon. She was so powerful.
This is where there is the greatest hope of recovering the money. In all, the state has identified more than 1,000 different assets linked to the fraud. And there may be others.
These are some of the most iconic buildings in Saigon. If you looked at a property portfolio of Ho Chi Minh City—of Saigon—and examined the most valuable buildings there, Truong My Lan would own a very significant chunk of them, perhaps 20 to 25% of those buildings. She is a property magnate.
And her lawyers seem confident she can raise the money.
The total value of her holdings actually exceeds the required compensation amount, said one lawyer to the BBC. According to one appraisal firm in Vietnam, the total value of assets linked to VTP could be between $12 billion and $48 billion.
Technically, she should be able to hit $9 billion, but everything depends on whether she can sell all the assets she owns.
And therein lies the problem. Because Truong My Lan is a billionaire on paper, but she's also desperate.
You can imagine if anybody wanted to buy a property from her, they would think, "Well, she's facing the death penalty. She's definitely a distressed seller. I can get a great price."
Now, let’s be real. She is unbelievably wealthy, and the prevailing belief right now does seem to be that she can buy her way out of the death penalty. But death is the price of failure. And from what I've read, it is impossible to know when exactly that penalty will come. So she's on the clock, her life on the line, and life in prison is her best possible outcome.
Sourse: CBC News. (2024b, December 6). Can this Vietnamese billionaire save herself from death row? | About That [Video]. YouTube. https://www.youtube.com/watch?v=bmj0gxbQyy4