Muaban24 prosecuted for e-commerce fraud

HA NOI -- Police in Ha Noi have prosecuted four top managers of Muaban24 Online Trade and Training Company for using computers, telecommunications networks and the internet and digital devices for fraudulent activity.

Police arrested company chairman Ngo Van Huy, 39, vice chairman cum deputy general director Le Van Cuong, 37, and technical department head Nguyen Manh Ha, 32. Police are searching for the company's general director, Nguyen Tuan Minh.

Established last year, the company set up a Muaban24 network with 120,000 online shops in more than 30 provinces and cities.

Muaban24 invited people to join its online market at the website www.muaban24.com at a cost of VND5.2 million (US$249) per person.

Each member would be given a place to sell and buy goods at favourable prices. Members could also earn VND1.5 million ($72) for recruiting a new member to the market.

However, the website has never focused on trading and instead focused on expanding its customer networks. With the multi-level model, senior members were promised hundreds of millions dong in monthly income.

Many people who were unaware of e-commerce and did not know how to use a computer borrowed money or mortgaged property to buy virtual booths. Farmers in the Central Highlands province of Dak Lak were among the victims.

So far, the company has collected more than VND600 billion ($28.8 million) invested by tens of thousands of members.

Police in the northern province of Hung Yen have prosecuted the provincial branch of the company, and conducted searches at eight company premises, where they seized documents deemed relevant to the case.

Last week, police in Phu Tho arrested managers of the Muaban24 branch for alleged tax evasion.

Director and deputy director of the company's branch in the central province of Thanh Hoa were questioned on suspicion of fraud.

Tran Huu Linh, director of the Ministry of Industry and Trade's E-Commerce Department, said at a conference on Monday that the ministry had refused to grant a licence to the company last August due to irregularities in company paperwork.

However, the company continued to operate illegally.

Linh said that a new e-commerce decree was needed to replace the old one from 2006 to stop this type of e-commerce operation.

He said the ministry was completing a draft decree and would submit it to the Government for approval.

Currently, there are about 40 websites running businesses similar to Muaban24. The department advised people not to join these websites and inform the department of any signs of fraud. -- VNS