In a shocking early ruling, a Vietnamese court sentenced one of the world’s wealthiest women to death during the country’s largest fraud trial.
The trial in Ho Chi Minh City highlighted the lifestyle of Vietnam’s nouveau riche elite, when Truong My La Lan was found guilty of stealing $44 billion from the country’s largest bank.
The judge determined that she merited “the harshest sentence,” despite the fact that she had never been arrested before. She burst into tears as she fought for her life before the sentence was announced. She admitted that she “did the wrong things” because of her “lack of understanding of legal matters.”
She tugged at the heartstrings of a society long accustomed to bribes at all levels, saying, “My heart breaks whenever I leave the court in the prisoners’ vehicle as I see the hands of my family members waving.” However, the court plainly sought to make an example of her, citing fears that bribery is eroding the Communist regime’s grip on a citizenry accustomed to free-wheeling capitalism.
The trial caused a stir when police-escorted convoys of 20 prison vans, sirens blasting, transported 68-year-old Lan and her colleagues between the courthouse and the prison where they were being kept.
The scope of the claims was startling, making the pranks of the old South Vietnamese crowd, who benefitted from American help before succumbing to the North Vietnamese in 1975, appear small. Lan has been ordered to refund $27 billion, but it is thought that most of the money may never be recovered.
Lan, like many wealthy Chinese-Vietnamese, was obsessed with her property business, which extended to Hong Kong and Singapore. She was charged with acquiring money through cash and bank transfers embezzled through shell firms owned by private banks in which she had a controlling position. She was charged with embezzling more than $12 billion from the Saigon Joint Stock Commercial Bank (SCB), which she chaired.
Prosecutors claimed they had taken over 1,000 assets from her vast empire.
Lan, a Chinese-Vietnamese born in Cholon, Saigon’s Chinese-dominated neighborhood, as HCM is still generally called, began her entrepreneurial career selling cosmetics at a market stall alongside her mother. By the 1990s, she had started purchasing assets such as restaurants and hotels.
She faced a slew of charges alongside her husband, Eric Chu Nap Kee, a millionaire Hong Kong real estate developer, and 85 co-conspirators, including lawyers and banking regulators from Hanoi, the capital of communist control.
Seventy were imprisoned alongside Lan and her husband at a high-security prison northwest of HCM at the ancient US base at Cu Chi, the wartime headquarters of the US Army’s 25th Infantry Division, and an adjacent tunnel complex that is now open to tourists.
Ten are under home detention, while five are on the run, asked by radio to turn themselves in. The verdicts against all of the co-conspirators are not yet revealed.
In HCM, new fire and security equipment adorn the Palais de Justice, a notable relic of French colonial authority where the accused were tried, amid suspicions that Lan’s associates would try to destroy six tons of documents prosecutors had gathered as evidence.
Lan’s arrest in 2022, while she was staying in the penthouse of her luxurious Sherwood apartment on Rue Pasteur in central HCM, set off an extremely convoluted series of events. At the trial, a driver admitted to smuggling millions of dollars in cash into and out of the penthouse—just one of her houses.
The case focused on Van Thinh Phat, Lan’s holding company, the SCB, and shell firms in Hong Kong and Singapore. To finance her operations, large amounts of cash were transported in and out of the bank.
Bribes to bank regulators in Hanoi, where the legendary Ho Chi Minh established the regime that expelled the French and subsequently the Americans and their proxies, were enough for years to smooth the scams masterminded by the Chinese mafia in HCM’s ancient Cholon neighborhood.
“Our days were peanuts compared to this one,” said Carl Robinson, an Australian journalist who returned to HCM after years of covering the conflict for the Associated Press. It is often considered that “the whole country runs on corruption,” he stated.
However, nailing Lan and her cohorts was not easy. Members of Vietnam’s Chinese minority “are notoriously secretive and non-ostentatious in their wealth,” Robinson said. “Everything is oral, no paper trails.”
Lan “had a big ‘umbrella’ protecting her entire scheme and now she’s lost it,” Robinson speculated. “The story is very much about property development and share market manipulation and sucking in investors who lose everything.” With the exception of “a yacht and flashy car or two, this really is all about money speculation,” he went on to say, “to borrow a pig’s head to make money, an endless Ponzi scheme.”
Those Chinese connections were critical for Lan, whose wealthy Cholon family was linked to the district leader, Le Thanh Hai. During the conflict, he joined the Viet Cong and climbed to the position of secretary of the HCM Communist Party, thereby becoming the city’s mayor.
Until 2015, Hai is thought to have supplied Lan with the protection she needed to establish her kingdom. Lan lived a lavish lifestyle in HCM, Hanoi, Hong Kong, and Singapore, weaving a tangled web that would make Carlo Pietro Ponzi blush from beyond the grave. She is claimed to have a half-dozen automobiles and a yacht on the Saigon river.
“For over two decades, two institutions with deep roots in Cholon—the Hai machine and Ms. Lan’s Vinh Thanh Phat empire—took good care of each other,” David Brown, a retired American ambassador stationed in Saigon in the mid-1960s, told The Daily Beast. “As the Hai machine was dismantled, there were plenty of functionaries who were induced to rat on Ms. Lan’s patient and shady accumulation of Saigon real estate.”
All was fine until March 2020, when Hai was removed from his powerful party positions on charges of “violating the principle of democratic centralism, the Party unit’s working regulations, and making wrongful decisions under the jurisdiction of the Party unit’s standing committee,” according to the official announcement.
In fact, it looks that Comrade Hai was operating a protection racket. It wasn’t until he was dumped that the rats began accusing Lan.
The political aspect of the case was highlighted in court, with the verdict emphasizing that “the defendant’s actions… eroded people’s trust in the leadership of the (Communist) Party and state.”
Another element in this story is the connections between Singapore and Hong Kong, which include questionable real estate deals orchestrated by Lan’s spouse, Eric. Rich old Eric appeared sorrowful in court, gravely promising to sell all of his assets in those Chinese high-finance hotspots to pay for the damage done in Vietnam.
So far, it appears that the prosecution has ignored his offer. “This is far more than tax evasion,” observed a longtime HCM observer. “This involves transferring monies from a bank with hundreds of investors to real estate businesses ranging from Saigon to Dalat [the picturesque French-built resort in the central highlands] to Hanoi, Hong Kong, and Singapore. It’s also a scam in which many ‘innocent’ investors suffer.”
Lan purchased one of the more extravagant properties, the lofty Capital Place building in downtown Hanoi, directly beneath the noses of the country’s current authorities. She has estimated its worth at over $1 billion, which would cover nearly 10% of the money she is suspected of stealing, but her daughter testified that the most she could receive for selling it would be $360 million.
Lan did own a prominent $400 million office tower in Singapore, but she sold it a year ago for a reduced $300 million, transferring it out of the hands of Viva Land, one of her holding companies. In 2020, Viva paid $376 million for the 21-story structure on Robinson Road, the main street in the heart of the city-state. The issue is embarrassing for Singapore, which prides itself on its clean government despite being embroiled in real estate scams and corruption implicating at least one high minister.
Lan’s niece, Van Thinh Phat, a member of one of HCM’s wealthiest families and married to a popular singer, appears willing to let her aunt, whom she refers to as “Mommy” from childhood, bear full responsibility for the empire’s transgressions. VN Express, a website that reports what the authorities want the world to know, claimed that prosecutors determined Van “has acknowledged and shown remorse for her crimes, provided honest information, and fully cooperated with investigators.”
Van, as CEO of auntie’s company, would have faced a life sentence if she had misappropriated $456 million from the bank. To protect herself, she told the court, “Though she bought stakes in SCB, she was only following her aunt’s instructions and sent proxies in her place to the bank’s shareholders’ meetings.”
According to VN Express, Van testified that Lan was “the actual owner of Saigon Commercial Bank” and that everyone else on the board of directors was only her pawn. “She unquestioningly signed all documents placed before her because of respect for their familial relationship.”
The niece testified that all Lan had to do to withdraw from SCB was “instruct her subordinates to establish shell companies and fabricate business plans to borrow from it.” She explained that her aunt could then do anything she wanted with the loot.
Fighting for their life, Lan and her husband Eric, who appeared distraught, promised the court that they would liquidate nearly all of their assets in Vietnam and China, including Hong Kong, to repay investors. Lan said all she wanted for herself was a $28 million antique mansion on a green HCM avenue built in 1925 during the height of the French colonial era.
After purchasing the estate in 2015, Lan recruited Italian and British restorers to do a $20 million makeover. By all appearances, the renovation is almost finished. Originally planned to open in 2022 as a prestigious restaurant and apartment, the gorgeous edifice, enclosed by a high gate, is currently closed. A sign on the door states that it has been confiscated for nonpayment of “water bills.”
Now she won’t see it again.
“Please let my daughter keep the villa so she can maintain and preserve it as a Vietnamese relic,” she pleaded, but her daughter declined.
Lan stated this compassion was the reason she handed millions to her employees “for contributing to SCB.” “The shares had belonged to my friends,” was her deceptive answer. “They went abroad so I bought the shares [and then gave them away].”
Much of the money is likely to be lost forever, as no one seems to know where it went. Tran Thi My Dung, the bank’s former deputy CEO, testified that Lan transferred funds online while cash was sent to her office “for her own expenses, which I did not know about.” Nor do the cops know “where the cash eventually ended up.”
Brown, the retired ambassador, is fairly knowledgeable about the origins of the fortune. He told The Daily Beast that Lan and other high rollers had taken possession of property “that, much earlier, had been confiscated from RVN stalwarts”—members and friends of the previous American-backed “Republic of Vietnam.”
Finally, in late 2022, the secretary-general of the Communist Party of Vietnam and his politburo allies decided it was time to depose her as part of an anti-corruption campaign, presumably because they did not receive the payoffs they had requested.
“That’s the backstory,” explained Brown. The subsequent show trial has been arranged as a warning to a slew of miscreants. “Ms. Lan will hang sometime before the 13th Party Congress next January,” Brown told reporters.
“By lethal injection, we no longer hang!” exclaimed a Vietnamese buddy in HCM. A Vietnamese woman who fled to the United States prior to the fall of the former Saigon administration mourned, “I am afraid she might be shot to death.”