Vietnam court upholds death penalty for property tycoon over fraud scandal

Hanoi – A Vietnamese court upheld the death penalty on Dec 3 for a property tycoon in a multibillion-dollar fraud case – but said her life could still be spared if she paid back three quarters of the assets she embezzled.

Property developer Truong My Lan, 68, was convicted earlier in 2024 of swindling money from Saigon Commercial Bank (SCB) – which prosecutors said she controlled –

and was condemned to die for fraud totalling US$27 billion (S$36.4 billion).

She appealed against the verdict in a month-long trial, but on Dec 3, during the hearing at the High People’s Court in Ho Chi Minh City, the judge said the total loss from the case was “huge, with extremely serious consequences” and there was “no basis to reduce the penalty”.

Under Vietnamese law, Lan can still have her death sentence commuted if she returns at least three-quarters of the total embezzled assets and cooperates with the authorities.

Another avenue open to her would be a petition for a pardon from President Luong Cuong.

Prosecutors had told the former chairwoman of Van Thinh Phat Group that she must repay an estimated US$11 billion, to avoid the death penalty. Her lawyers said multiple investments and loans are being negotiated to clear her debts, but it is unclear how much of these are tied to properties that can be sold or assets that have been frozen by the authorities.

By law, Lan’s death sentence would be commuted to life in prison if she turns 75 before the execution is carried out.

Tens of thousands of people who had invested their savings in SCB lost money, shocking the communist nation and prompting rare protests from the victims.

Lan, who founded real estate development group Van Thinh Phat, told the court in Ho Chi Minh City that “the quickest way” to repay the stolen funds would be “to liquidate SCB, and sell our assets to repay SBV (State Bank of Vietnam) and the people”.

“I feel pained due to the waste of national resources,” Lan said last week, adding that she felt “very embarrassed to be charged with this crime”.

On Dec 3, she sat in the front row of the courtroom, waiting to hear if her life would be spared. Next to her was her husband, who is appealing against a nine-year sentence for violating banking regulations.

In her official handwritten appeal of more than five pages seen by AFP, Lan had said that the death sentence was “too severe and harsh”, asking the court to consider a more “lenient and humane approach”.

The month-long appeal was attended by more 100 lawyers, according to the state media.

Harbour, luxury homes

Lan owned just 5 per cent of shares in SCB on paper, but at her trial the court concluded that she effectively controlled more than 90 per cent through family, friends and staff.

The State Bank said in April that it pumped funds into SCB to stabilise it, without revealing the amount.

Among the assets that Lan and Van Thinh Phat own are a shopping mall, a harbour and luxurious housing complexes in business hub Ho Chi Minh City.

During her first trial in April, Lan was found guilty of embezzling US$12.5 billion, but prosecutors said the total damages caused by the scam amounted to US$27 billion – equivalent to around 6 per cent of the country’s 2023 gross domestic product.

The real estate mogul’s downfall has captured global attention due to the severity of the sentence and complexity of the case. She has become emblematic of the ruling Communist Party’s crackdown on corruption, showcasing the kind of high-level networks it wants to go after and make an example of.

Lan and dozens of defendants, including senior central bank officials, were arrested as part of a national corruption crackdown dubbed the “burning furnace” that has swept up numerous officials and members of Vietnam’s business elite.

A total of 47 other defendants have requested reduced sentences at the appeal.

In November, Lan was convicted of money laundering and jailed for life in a separate case. Thousands of bond holders saw their investments all but wiped out. Some turned up at court to demand justice and that their money be repaid. AFP, BLOOMBERG