Vietnam to Prosecute Van Thinh Phat Boss Truong My Lan for Laundering $17.5B

Vietnamese authorities are seeking to prosecute Truong My Lan for money laundering, two months after the convicted boss of Ho Chi Minh City-based developer Van Thinh Phat Group was handed the death penalty for orchestrating an embezzlement scheme that led to over VND 677 trillion ($27 billion) in damages the country’s largest ever financial crime spree.

In a statement on Wednesday, Vietnam’s Ministry of Public Security announced the conclusion of the second phase of its investigation against Truong, recommending that she, along with 33 co-defendants, be prosecuted for “fraudulent appropriation of assets, money laundering and illegal cross-border transport of currency.”

The Ministry of Public Security, which conducted the investigation through its Police Investigation Agency unit, accused Truong and her co-defendants of having laundered over VND 445.7 trillion ($17.5 billion), including VND 415 trillion siphoned from Saigon Joint Stock Commercial Bank (SCB) under Truong’s de facto control of the lender. That conspiracy involved the fallen property tycoon placing accomplices in key positions in the bank and disburse fraudulent loans to Van Thinh Phat and other Truong-owned shell companies.

The latest phase of the case comes after Vietnam’s central bank was revealed to have injected another $1.2 billion of liquidity into SCB over the last two months, bringing the total rescue funding to date for the bank to $24.5 billion after a run on deposits triggered by Truong’s October 2022 arrest led to a takeover of the lender by the central bank.

Guilty on All Counts

The investigation determined that the laundered funds also include proceeds fraudulently appropriated by the defendants, after Truong used a series of business entities, including Van Thinh Phat Group, to issue bonds worth over VND 30 trillion, which were sold to over 35,000 investors.

According to state media accounts, Truong made $4.5 billion in cross-border money transfers since 2012, including moving $1.5 billion out of Vietnam and $3 billion into the country. The reports did not specify which other countries were involved, with authorities saying that an investigation into those transfers has been completed.

Truong, who is appealing the death sentence, was convicted in April after having been found guilty of charges including embezzling VND 304 trillion ($12 billion) from SCB, violating bank lending rules, and bribing government officials. The conviction came after Truong, along with 85 associates, were formally indicted in December.

Truong’s husband, Hong Kong businessman Eric Chu, was sentenced in April to nine years in prison for “violating regulations on lending in the activities of credit institutions.” Chu, along with his wife, is said to have used the funds to establish a property empire which stretched beyond Vietnam into Hong Kong and Singapore, with companies linked to the couple and Van Thinh Phat having liquidated properties since Truong’s 2022 arrest.

Regional Liquidation

With the family having acquired commercial buildings around the region, a company registered to Truong and Chu’s daughter, Elizabeth Chu, earlier this year sold the Nexxus Building, an office block in Hong Kong’s Sheung Wan neighborhood to companies controlled by individuals linked to Steve Chang, co-founder and chairman of Tokyo-listed cybersecurity firm Trend Micro, for a reported HK$6.4 billion ($819 million).

In June of 2023 entities controlled by the family sold a hotel in Hong Kong’s Tin Hau area for a reported HK$470 million – a 41 percent discount from what they paid to acquire the property in 2017. Also in June last year, the family sold a house in Hong Kong’s Peak area for HK$300, reportedly for 36 percent less than the acquisition price.

Just over one year ago the Truong-Chu clan sold a development site in Hong Kong’s Quarry Bay area for HK$435 million, with the family still said to own The Wellington office tower on Sheung Wan’s Wellington Street, as well as multiple luxury homes in the Peak and Mid-Levels areas reported to be worth more than HK$2 billion in aggregate.

In Singapore, Viva Land, a local company affiliated with Truong’s Van Thinh Phat Group, during November agreed to sell the Hotel Telegraph along Robinson Road for around S$170 million to S$180 million ($125 to $133 million), with the company incurring an estimated S$70 million loss on the disposal after paying a record S$240 million for the 134-key property in 2022.

In March of last year Viva Land sold 39 Robinson Road in Singapore for S$399 million, with that property also changing hands for less than its purchase price.