A breakdown of the $12.5 Billion Financial Fraud committed by Truong My Lan and the Death Sentence imposed on her by Vietnam.
ABSTRACT
This article aims to explore the recent case of Truong My Lan’s unusual death sentence for her role in a $12.5 billion bank fraud case in Vietnam. Known for its high rate of capital punishment, mostly for murder and terrorism, this case represents a notable departure since it applies the death penalty to a financial offence. This article investigates the justification for such a severe sentence and its potential impact on the legal and financial systems in Vietnam. The case raises significant concerns regarding legal standards, the harshness of sanctions for financial malfeasance, and the future of financial regulation.
INTRODUCTION
Vietnam is a country in Southeast Asia that is well-known for its rivers, beaches, lively cities, and Buddhist pagodas.There is always another side to the coin, recently vietnam had become a hot topic in news for its judgement of the death penalty of a woman. The woman in question is Truong My Lan, a Vietnamese real estate tycoon. Lan was born in 1956 and began selling cosmetics with her mother, a Chinese businesswoman, at Ho Chi Minh City’s oldest market, according to Vietnamese newspaper Tien Phong. When Vietnam’s state-run economy gave way to a more market-oriented one that welcomed foreign investors, she and her family founded the Van Thinh Phat company in 1992. The company has grown over the years to become one of Vietnam’s wealthiest real estate enterprises, with projects that include luxury residential towers, offices, hotels, and shopping centres. Lan first met her husband, Hong Kong investor Eric Chu Nap-kee, in 1992.
VIETNAM AND CAPITAL PUNISHMENT
The death sentence was historically used to maintain societal order and justice. It has become a contentious issue for many years. Some countries have abolished this penalty, while others still use it. Vietnam is one of the countries that still use the death sentence. The death penalty is used to punish a variety of offences, and many are executed each year. Because China ruled Vietnam for a long time, Chinese law had a significant influence on Vietnamese criminal law for about a millennium. The “Hong Duc Code,” which was implemented during the Le Dynasty, is one of Vietnam’s most famous criminal codes. It heavily draws from Chinese laws, particularly the “Ten Abominations,” which were serious offences deserving of severe punishments. Similar to the integrated legal codes of China’s Tang and Ming Dynasties, Vietnam’s early criminal laws encompassed a wide variety of legal principles and did not clearly distinguish between criminal law and civil law. Following its independence, Vietnam’s criminal law was greatly impacted by Soviet law, owing to educational exchanges and the adoption of communist ideas. Vietnam’s criminal laws were structured in the same way as Soviet codes, with general provisions, specific crimes, and punishment protocols.
Following the Soviet example, the Communist Party of Vietnam (CPV) used criminal legislation to preserve political stability. Vietnam has been lowering the number of offences that carry the death penalty. There were 44 capital offences mentioned in the 1985 Criminal Code; they were lowered to 29 in the 1999 Code and even fewer in later versions. The death sentence is stipulated in the 2015 Criminal Code for crimes against human life, national security, drug-related offences, and situations of extreme corruption . Some demographics are immune from the death penalty: those who are over 75 years old, expectant moms, and mothers of small children. Death sentences for corruption or embezzlement can be modified if the convict returns a large amount of the stolen property or cooperates with the law.
A major change in the application of the death sentence has occurred in Vietnam with the implementation of Decree No. 82/2011/NĐ-CP in 2011, which required the switch from firing squad execution to lethal injection. This change has been further modified through subsequent decrees. Using three different medications, this technique aims to provide a more humane and regulated death process, with stringent procedures in place to deal with any difficulties.
Despite the global movement to abolish the death penalty and the influence of democratic ideals, it is nevertheless difficult to apply a rights-based approach to Vietnam’s deeply ingrained Confucian legal system. Vietnamese people find it difficult to accept alternative viewpoints on the death sentence because for a long time, many of them saw it as an extreme and necessary form of punishment. According to the state, the death penalty is an essential instrument for punishing and educating criminals as well as serving as a deterrent for more serious crimes down the road.
While countries with similar cultural norms, such as South Korea, have abolished the death sentence, Vietnam has been slower to adopt this progressive mindset. This is mostly because of the political regime’s power, as the Communist Party of Vietnam (CPV) has a big say in how laws are made, especially when it comes to criminal law. The CPV places a higher priority on political stability, social order, and national security than it does on humanitarian and religious grounds.
BREAKDOWN OF THE $12.5 BILLION FRAUD SCHEME
My Lan established her business, Van Thinh Phat Group (VTP), in 1992 following the reforms that took place after 1986. VTP has subsequently grown significantly, purchasing a diverse portfolio of premium properties such as luxury apartments, hotels, restaurants, and office buildings. The well-known real estate magnate expanded her holdings in 2011 when she combined three financially troubled banks to form Saigon Commercial Bank (SCB), which by mid-2021 would have more than 20 trillion VND in assets, making it the largest commercial bank in Vietnam. But My Lan’s rise was marred by questionable financial dealings and close ties to dishonest people in the banking industry. My Lan’s trial revolved around a fraud involving the Saigon Commercial Bank (SCB).
It was discovered that she had planned a massive scheme to use hundreds of shell companies to channel loans to her enterprises, which had a negative effect on the bank’s capacity to make money. A person’s share of bank ownership is limited to 5% per Vietnamese law. My Lan’s loans accounted for a staggering 93% of the bank’s total lending, and there have been accusations that these funds were embezzled for personal benefit. These include a withdrawal of 108 trillion VND, or nearly 2 tonnes if the largest denomination of bills was used, which she stored in her basement, as well as multiple unreported real estate investments. It is said that My Lan authorised the loans and withdrawals using proxies and self-appointed staff members. In reaction to the bank run that resulted, prompting the central bank to take over SCB, new laws were put into place providing the central bank the power to interfere in circumstances of massive cash withdrawals.
The Communist Party Secretary-General, Nguyen Phu Trong, a conservative ideology trained in Marxist theory, launched the larger “Blazing Furnaces” anti-corruption campaign, which included the Vietnamese government’s intention to demonstrate its crackdown on corruption. This vast legal effort served to underline this goal. Hundreds of prominent business people and state officials have been charged as a result of this initiative. The arrest of Lan in October 2022 was one of the most well-known cases in Vietnam’s ongoing, since 2022, anti-corruption campaigns. The highest levels of Vietnamese politics have been impacted by the so-called Blazing Furnace campaign. Following his involvement in the campaign, former president Vo Van Thuong announced his resignation in March.
After a month-long trial that was widely reported by official media, Truong My Lan was found guilty of bribery, embezzlement, and breaking banking regulations. Thousands of people were called to testify, hundreds of lawyers, and tons of evidence were all present during the trial. Lan was sentenced to 40 years in prison and a $27 million fine and a death sentence, which is exceptional for a woman convicted of white-collar crime in Vietnam. It’s assumed that this intensity is an attempt to get more money out of her. Even though Lan denied the allegations and entered a not guilty plea, she and her attorney, Nguyen Huy Thiep, said that Lan would appeal the decision.
According to AFP and official media, Lan appeared to express suicidal thoughts in her closing words to the court. “In my desperation, I thought of death,” she said. “I am so angry that I was stupid enough to get involved in this very fierce business environment – the banking sector – which I have little knowledge of.”
CONCLUSION
The decision to execute My Lan, which is unusual for financial crimes in Vietnam, was a declaration of the country’s strong stance on transparent administration and has generated a great deal of controversy. Eighty-one other defendants were given prison terms ranging from three to twenty years. Critics contend that although the judgement highlights the seriousness of My Lan’s offences and the government’s resolve to fight corruption, it also raises a number of moral concerns regarding the applicability and scope of the death penalty in relation to white-collar crimes. The case establishes a concerning precedent that may have an impact on views on the junction of financial wrongdoing and criminal justice from both domestic and foreign viewpoints.
The severe penalty imposed on My Lan has impeded the advancement of the development. Vietnam’s business landscape has reached a breaking point as authorities, fearing prosecution, are stuck in a state of “bureaucratic paralysis,” unsure of how to move forward. Political figures have quietly resigned in response to accusations of “violations and wrongdoings.” The integrity of the Vietnamese banking industry as a whole has unavoidably come under scrutiny from foreign investors, which has further dimmed the country’s economic prospects.