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Death sentence for real estate tycoon Truong My Lan upheld in Vietnam’s largest fraud case

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HANOI, Vietnam (AP) — The death sentence for real estate tycoon Truong My Lan was upheld Tuesday in Vietnam’s largest fraud case, the scale of which has raised concerns about the country’s economy.

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She was convicted last April of embezzlement and bribery for fraud amounting to $12.5 billion, roughly 3% of Vietnam’s 2022 GDP. As head of Van Thinh Phat’s real estate company, Lan illegally controlled Saigon Joint Stock Bank Commercial Bank between 2012 and 2022 and authorized 2,500 loans, costing the bank losses worth $27 billion.

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VN Express reported that the court in Ho Chi Minh City rejected her appeal against the conviction, adding that her death sentence could be commuted to life if she pays three-quarters of the losses. The court said its violations negatively affected banking services, caused public disorder and undermined people’s confidence, state media reported.

Her arrest was among the most high-profile events in Vietnam’s anti-corruption campaign that has intensified after 2022. The “Burning Oven” campaign has touched the highest levels of Vietnamese politics. But the scale of its fraud shocked the nation, with analysts raising questions about whether banks or other companies had made similar mistakes.

This has dampened Vietnam’s economic outlook and made foreign investors wary at a time when Vietnam is trying to position itself as a home for companies shifting their supply chains away from China.

Lan, 67, and her family set up Van Thing Phat in 1992 after Vietnam abandoned its state-run economy in favor of a more market-oriented approach open to foreigners. The company has grown into one of the richest real estate companies in Vietnam, with luxury residential buildings, offices, hotels and shopping malls.

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This made it a major player in the country’s financial industry. It orchestrated the merger of embattled SCB Bank in 2011 with two other lenders in coordination with the Central Bank of Vietnam. She used this to get money from SCB Bank, and according to government documents, she owned more than 90% of the bank while approving thousands of loans to “shell companies,” the court said.

According to government media, these loans found their way to her, and she bribed officials to cover her tracks.

The scale of the crime led to the case being split into two trials, and Lan was sentenced to life in prison again in October. State media reported that the trial accused of raising $1.2 billion from about 36,000 investors by illegally issuing bonds through four companies.

She was also convicted of embezzling $18 billion fraudulently obtained and using companies she controlled to illegally transfer more than $4.5 billion in and out of Vietnam between 2012 and 2022.

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