The construction of a building near Bến Thành Market, believed to be owned by Viva Land, a subsidiary of Vạn Thịnh Phát Group, stalled at the end of 2022 following the arrest of Trương Mỹ Lan. The police have said the money and assets recovered from the scandal will be returned to victims. — VNS Photo Bồ Xuân Hiệp

HCM CITY — The Ministry of Public Security has recommended prosecuting 34 individuals, including Vạn Thịnh Phát chairwoman Trương Mỹ Lan, who is on death row, for misappropriation of assets, money laundering and illegal transportation of currency across borders.

The 68-year-old chairwoman, sentenced to death earlier this year for financial fraud at Saigon Commercial Joint Stock Bank (SCB), is the mastermind behind bond fraud at the private lender, the police have alleged.

Lan and her accomplices, including her Chinese husband, have also been accused of illegally transporting over US$4.5 billion and laundering over VNĐ445 trillion across borders over a 10-year period.

In addition, other 20 individuals, including Lan’s niece, are facing charges of misappropriating assets, according to the police.

During the trial later this year prosecutors will be focusing on fraudulent bond issuances related to Lan and her company.

Speaking to Việt Nam News, the police said they have concluded their investigation but did not disclose details about the “misappropriation of property through fraudulent bond issuances”.

Lan’s 1,000-odd fake companies under Vạn Thịnh Phát group carried out fraudulent bond issuances worth over VNĐ30 trillion ($1.24 billion) and sold them to 42,000 victims, mostly SCB depositors.

Since her arrest in October 2022 the victims have not received any interest or principal payments.

The State Bank of Vietnam guarantees bank savings accounts but not bonds purchased through lenders.

Authorities continue to urge victims in possession of bonds to come forward with information and documents.

The money and assets recovered from the convicted people would be prioritised for repaying the victims, the police have said.

At her trial in April, Lan received the death penalty for financial frauds at SCB and was also ordered to pay compensation of VNĐ673.8 trillion ($27 billion) to the bank.

Her Chinese husband, Eric Chu Nap-kee, chairman of the board of Times Square Vietnam Joint Stock Company, received a nine-year prison sentence for violating banking regulations at Lan's direction.

Lan’s niece, Trương Huệ Vân, CEO of Windsor Property Management, was sentenced to 17 years in prison for aiding Lan in committing the crimes.

Other bank executives and State officials involved in the scandal received various sentences ranging from three years to life for embezzlement and violating banking regulations.

People who were deceived into purchasing bonds through private bank SCB gather in front of the Ministry of Finance office in Hà Nội at the end of 2023 to demand a resolution to the scandal, holding the ministry responsible for poor oversight of corporate bond issuances. — VNS Photo Bồ Xuân Hiệp

Lan, who did not hold positions at the bank but owned a significant stake in it under various people’s names, was found guilty of using it for loans to fund her own company’s operations.

Her arrest was part of a national anti-corruption campaign which has intensified since 2021.

In 1992, Lan and her family founded Vạn Thịnh Phát, one of the country’s most prominent real estate companies.

While Lan’s arrest has exposed the massive scale of the fraud, experts have warned the scandal is just the “tip of the iceberg” in the financial sector.

The Government has blamed the Ministry of Finance and central bank for their poor management of the sector that led to the scams.

It has tightened bank ownership regulations and called for increased oversight to preclude future scandals. — VNS