They couldn’t even wait for the show trial to reach its scheduled conclusion. In a shock early verdict, a Vietnamese court sentenced one of the world’s wealthiest women to be executed after the country’s biggest ever fraud trial.
The lifestyle of Vietnam’s nouveau riche elite was exposed during the devastating trial in Ho Chi Minh City that convicted Truong My La Lan of stripping the country’s biggest bank huge sums of money in a scam worth $44 billion.
The court ruled she deserved “the toughest sentence” while acknowledging she had never previously been arrested. She broke down in tears as she battled for her life before the sentence was announced. It was “due to my lack of understanding of legal matters,” she said, that she “did the wrong things.”
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Tugging at the heartstrings of a public long accustomed to bribery at all levels, she said, “My heart breaks whenever I leave the court in the prisoners’ vehicle as I see the hands of my family members waving.” The court, however, clearly wanted to make an example of her amid concerns that bribery is undermining the grip of the Communist regime over a society now accustomed to free-wheeling capitalism.
The trial created a sensation as police-escorted convoys of 20 prison vehicles, sirens blaring, carrying 68-year-old Lan and her cohorts between the courthouse and the prison where they were held.
The scale of the allegations were of such staggering proportions as to make the shenanigans of the old South Vietnamese crowd, who profited off American aid before falling to the North Vietnamese in 1975, look petty. Lan has been ordered to repay $27 billion although it is feared much of that money will never be found.
Like most wealthy Chinese-Vietnamese, Lan’s world revolved around property—in her case an empire with tentacles reaching to Hong Kong and Singapore. She was charged with amassing wealth via both cash and bank transfers embezzled through shell companies from private banks in which she held controlling stakes. She was accused of embezzling more than $12 billion from the Saigon Joint Stock Commercial Bank (SCB), which she chaired.
Prosecutors said they had seized more than 1,000 properties from her extraordinary empire.
A Chinese-Vietnamese born in Cholon, the Chinese-dominated district of Saigon, as HCM is still widely known, Lan started her business career selling cosmetics at a market stall with her mother. By the 1990s she began to purchase properties, including restaurants and hotels.
She faced an array of charges along with her husband, Eric Chu Nap Kee, a billionaire Hong Kong real estate operator, and 85 co-conspirators, including lawyers and banking regulators from the capital of Hanoi, the seat of communist rule.
Seventy were imprisoned with Lan and her husband at a top-security prison northwest of HCM near the old U.S. base at Cu Chi, wartime headquarters of the U.S. Army’s 25th Infantry Division and a nearby tunnel complex that is now open to tourists.
Ten are under house arrest and five are on the run—urged by radio to turn themselves in. Verdicts against all of the co-conspirators are not yet known.
In HCM, new fire equipment and security devices adorn the Palais de Justice, a distinguished relic from French colonial rule where the accused stood trial amid fears that Lan’s cronies may try to destroy six tons of documents that prosecutors have amassed as evidence.
It was an incredibly complicated ordeal beginning with Lan’s arrest in 2022 while she was living in the penthouse of her luxury Sherwood condominium on Rue Pasteur in central HCM. At the trial, a driver testified to hustling millions of dollars in cash in and out of the penthouse—just one of her homes.
The case focused on Van Thinh Phat, the holding company of which Lan is chairwoman, along with the SCB, which Lan has chaired, and shell companies in Hong Kong and Singapore. Bundles of cash moved in and out of the bank to finance her transactions.
Bribes to bank regulators in Hanoi, where the legendary Ho Chi Minh founded the regime that kicked out the French and then the Americans and their stooges, were enough for years to grease the scams masterminded by the Chinese mafia in HCM’s historic Cholon district.
“Our days were peanuts compared to this one,” said Carl Robinson, an Australian journalist who is back in HCM years after covering the war for the Associated Press. It is widely assumed that “the whole country runs on corruption,” he said.
Nailing Lan and her cohorts, though, wasn’t easy. Members of Vietnam’s Chinese community “are “notoriously secretive and non ostentatious in their wealth,” Robinson told The Daily Beast. “Everything is oral, no paper trails.”
Lan “had a big ‘umbrella’ protecting her entire scheme and now she’s lost it,” Robinson surmised. “The story is very much about property development and share market manipulation and sucking in investors who lose everything.” Quite aside from “a yacht and flashy car or two, this really is all about money speculation,” he said, “to borrow a pig’s head to make money, an endless Ponzi scheme.”
Those Chinese links were vital for Lan, whose wealthy Cholon family was closely allied with the district boss, Le Thanh Hai. Having joined the Viet Cong during the war, he rose to secretary of the HCM Communist Party, becoming the city’s de facto mayor.
Until 2015, Hai is believed to have provided Lan with the protection needed to build her empire. Weaving a tangled web that would make Carlo Pietro Ponzi blush from beyond the grave, Lan lived a life of luxury between HCM, Hanoi, Hong Kong, and Singapore. It’s said she had half a dozen cars 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 diplomat who was posted to 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 stripped of his powerful party positions on charges, said the official announcement, of “violating the principle of democratic centralism, the Party unit’s working regulations and to have made wrongful decisions under the jurisdiction of the Party unit’s standing committee.”
In fact, it appears Comrade Hai was running a protection racket. Not until he was dumped did the rats come out of the woodwork to start accusing Lan.
The political element of the case was underlined in court when the ruling emphasized that: “The defendant’s actions... eroded people’s trust in the leadership of the (Communist) Party and state.”
Other elements in this saga are the links in Singapore and Hong Kong, including shady real estate purchases engineered by Lan’s husband, Eric. Rich old Eric looked rather sad in court, solemnly swearing to sell all his assets in those hubs of Chinese high finance to pay back the damage in Vietnam.
The prosecution so far seems to have ignored his offer. “This is far more than tax evasion,” said one veteran HCM observer. “This is moving funds from a bank with thousands of investors into companies for real estate investments from Saigon to Dalat [the beautiful French-built resort in the central highlands] to Hanoi to Hong Kong and Singapore. It’s also a scheme with lots of ‘innocent’ investors hurt.”
One of the more ostentatious properties Lan purchased is the soaring Capital Place building in downtown Hanoi, right under the noses of the country’s latter-day leaders. She has placed its value at around $1 billion, which would cover nearly 10 percent of the money she’s accused of stealing, but her daughter testified the most she can get for letting it go would be $360 million.
Lan did have a prestigious $400 million office tower in Singapore but sold it a year ago for a discounted $300 million, taking it out of the hands of Viva Land, one of her holding companies. Viva bought the 21-story building on Robinson Road, a main drag in the heart of the city-state, in 2020 for $376 million. The case is an embarrassment to Singapore, proud of its clean government while caught up in real estate scams and corruption involving at least one top minister.
Lan’s niece Van Thinh Phat—a member of one of HCM’s richest families, married to a popular singer—seems prepared to let her aunt, whom she’s called “Mommy” from childhood, take full blame for the transgressions of the empire. VN Express, a website that reports what the authorities want the world to know, reported that prosecutors decided Van “has acknowledged and shown remorse for her crimes, provided honest information and fully cooperated with investigators.”
As CEO of her aunt’s company, Van would otherwise have also been on trial for her life for misappropriating $456 million from the bank. To save her neck, 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.”
Van testified that Lan was “the actual owner of Saigon Commercial Bank and everyone else on its board of directors was merely her pawn,” according to VN Express. “She unquestioningly signed all documents placed before her because of respect for their familial relationship.”
All Lan had to do to withdraw from SCB, the niece testified, was to “instruct her subordinates to establish shell companies and fabricate business plans to borrow from it.” Her aunt, she said, could then do whatever she wanted with the loot.
Fighting for their lives, both Lan and husband Eric, looking stricken, promised the court to sell just about all their assets anywhere in Vietnam as well as China, including Hong Kong, to pay back investors. All Lan wanted for herself, she said, was a historic villa valued at $28 million on a leafy HCM boulevard dating from 1925 at the height of the French colonial era.
After buying the mansion in 2015, Lan hired Italian and British restorers for a faithful $20 million remodeling. By all appearances, the restoration is nearly complete. Originally set to open in 2022 as a prestige restaurant and residence, the lovely building, surrounded by a high fence, is tightly shut. A sign on the door says it’s been seized for non-payment of “water bills.”
Now she will never 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 said she didn’t want it.
Lan claimed such generosity was why she gave millions to her staff “for contributing to SCB.” “The shares had belonged to my friends,” was her disingenuous explanation. “They went abroad so I bought the shares [and then gave them away].”
It’s quite likely that much of the money will never be recovered, as no one seems to know where the hell it all went. The former deputy CEO of the bank, Tran Thi My Dung, testified that Lan transferred funds online while cash was delivered to her office “for her own expenses, which I did not know about.” Nor do the police know “where the cash eventually ended up.”
Brown, the retired diplomat, does have a pretty good idea of the origins of the wealth. He told The Daily Beast that Lan and other high rollers had gained control over property “that, much earlier, had been confiscated from RVN stalwarts”—members and friends of the old American-backed “Republic of Vietnam.”
Finally, in late 2022, the secretary-general of the Communist Party of Vietnam and his friends on the politburo decided it was time to take her down as part of an anti-corruption kick, possibly because they didn’t get the payoffs they had demanded.
“That’s the backstory,” said Brown. The resulting show trial has been staged as a warning for a legion of miscreants. “Ms. Lan will hang sometime before the 13th Party Congress next January,” Brown predicted.
To which a Vietnamese friend in HCM proudly piped up, “By lethal injection, we no longer hang!” Although a Vietnamese woman who fled to the U.S. before the fall of the old Saigon regime lamented to The Daily Beast, “I am afraid she might be shot to death.”
