Death sentence for Vietnamese tycoon upheld in massive fraud case

The death sentence for Truong My Lan, the real estate magnate at the heart of Vietnam’s largest fraud case, was upheld on December 3, drawing national attention to the scope of the crime and its economic implications.

Lan, convicted in April of embezzlement and bribery, was found guilty of orchestrating a fraud totalling $12.5 billion — nearly 3% of Vietnam’s 2022 GDP, Caliber.Az reports referring to US media.

As the chairperson of Van Thinh Phat Group, she unlawfully controlled Saigon Joint Stock Commercial Bank from 2012 to 2022. During this period, she approved 2,500 loans, which ultimately cost the bank $27 billion in losses.

The Ho Chi Minh City court rejected her appeal, but indicated that her death sentence could be reduced to life imprisonment if she repays three-quarters of the stolen funds, amounting to approximately $11 billion. State media reported that her defence argued she had already repaid some of the money, but the court disagreed, citing unresolved legal issues surrounding some seized properties and the inability of prosecuting agencies to fully assess their value.

Her lawyers also highlighted mitigating factors, including her admission of guilt, expression of remorse, and partial repayment of the funds. "I feel pained due to the waste of national resources," Lan reportedly said last week.

Despite this, the court emphasized the severity of her crimes, stating that they had caused significant disruption to the banking sector, undermined public trust, and led to widespread disorder. According to VN Express, the court noted that her actions had a profound negative impact on both the financial system and society as a whole.

Under Vietnamese law, death sentences are not immediately carried out and can be subject to an extended legal process. Nguyen Khac Giang, a visiting fellow in the Vietnam Studies Program at Singapore’s ISEAS–Yusof Ishak Institute, suggested that Lan might seek further legal review or request a presidential pardon to reduce her sentence. “If she repays at least three-quarters of the misappropriated funds, the court may consider commuting her sentence to life imprisonment,” he added.

Lan’s arrest was one of the most high-profile outcomes of Vietnam’s anti-corruption campaign, which intensified after 2022 as part of the Blazing Furnace crackdown. The case, which shocked the nation, raised concerns about similar practices in other banks and businesses, further dampening the country’s economic outlook. Analysts also expressed worries that the scandal could make foreign investors hesitant, particularly as Vietnam seeks to position itself as a prime destination for businesses diversifying their supply chains away from China.

At 67, Lan founded the Van Thinh Phat Group in 1992, following Vietnam’s transition to a more market-oriented economy. The company eventually grew into one of the country’s wealthiest real estate firms, with assets including luxury residential buildings, hotels, offices, and shopping centres. Her success made her a key player in Vietnam’s financial sector, including her involvement in the 2011 merger of the troubled SCB bank with two other lenders, a move coordinated with Vietnam’s central bank. The court found that she used this merger to siphon off funds, eventually controlling more than 90% of SCB and approving fraudulent loans to "ghost companies" linked to her.

In addition to the charges related to the $12.5 billion fraud, Lan faced further legal battles. In October, she was sentenced to life imprisonment for illegally raising $1.2 billion from nearly 36,000 investors by issuing bonds through four companies. She was also found guilty of illegally transferring more than $4.5 billion out of Vietnam between 2012 and 2022.

Vietnam has imposed over 2,000 death sentences in the past decade, executing more than 400 prisoners. The death penalty, which is applicable for a range of offenses, including murder and drug trafficking, is also considered a potential sentence for high-profile financial crimes.

By Tamilla Hasanova