Lã Quốc Trưởng, chairman of Capel Group, at the investigation agency. — Photo courtesy of police

HCM CITY — Vietnamese prosecutors have accused the chairman of Capel Group and several associates of running a fictitious investment scheme that raised more than VNĐ702 billion (US$26.8 million) from 4,837 investors, with more than VNĐ420 billion ($16 million) allegedly misappropriated.

Lã Quốc Trưởng, 40, chairman and legal representative of Capel Group, has been charged with fraud and money laundering, according to an indictment issued by the HCM City People’s Procuracy.

Vũ Đức Tĩnh, 45, director of Thái Tuấn Trading and Services Co Ltd, and three other defendants have also been charged with fraud, according to the indictment.

Prosecutors allege that Trưởng established Capel in 2019 as an investment consultancy but that the company did not conduct the business activities it promoted to investors.

From around October 2021, Trưởng worked with Tĩnh, who prosecutors say provided strategies for raising funds and organising the company's operations in return for 15 per cent of the revenue raised.

Capel allegedly operated a multi-level fundraising structure disguised as business cooperation agreements and share-purchase contracts.

The company organised investment seminars at its offices, restaurants and other venues in several provinces and cities, sometimes attracting more than 300 people, according to the indictment.

At these events, Capel promoted purported investments in real estate, green energy, solar power, tourism, transport, training and technology transfer.

It also claimed to have representative offices in several countries and to be operating successfully, prosecutors said.

Investors were allegedly offered returns of 0.625 per cent a day, 3.125 per cent a week or 12.5 per cent a month. Those investing for two years were promised repayment of their principal plus profits equivalent to 300 per cent of the amount invested.

Investigators determined that the claims about Capel's business activities were false and that the company was not eligible to issue shares and did not actually transfer shares to investors, prosecutors said.

Thousands of contracts

Data extracted from computers and storage devices seized from Capel showed that the company signed nearly 8,000 contracts with 4,837 investors between 2021 and 2022 and raised more than VNĐ702 billion, according to the indictment.

Prosecutors said the money was circulated in a manner in which funds from later participants were used to make payments to earlier investors.

Of the amount raised, Capel paid more than VNĐ52 billion in direct bonuses and over VNĐ229 billion in purported profits to investors, according to investigators.

They allege that Trưởng misappropriated more than VNĐ420 billion.

Prosecutors said Trưởng used multiple bank accounts to receive investors' money, pay commissions and employee support, transfer 15 per cent of the funds raised to Tĩnh, and purchase property and other assets. Some assets were allegedly registered in other people's names.

During the investigation, Trưởng admitted to the alleged conduct and said he had used investors' money for property investments, projects and personal spending, according to the indictment.

He currently has no assets available to compensate investors, investigators said.

Tĩnh has denied acting as an accomplice, saying he only provided business consultancy to Trưởng.

Tĩnh told investigators that he had lent Trưởng about VNĐ5 billion and advised him on real estate investment, seminars, company departments and fundraising plans.

He said the 15 per cent he received from Capel was a consultancy fee voluntarily paid by Trưởng and was unrelated to any alleged misappropriation.

Investigators rejected Tĩnh’s account, saying it was inconsistent with evidence collected during the investigation. 

They said he regularly received money from Capel and that his consultancy work was closely linked to the alleged fictitious business model and illegal fundraising activities.

Prosecutors allege that Tĩnh provided active assistance to Trưởng in carrying out the scheme. — VNS