Corruption is Everywhere > Tycoon sentenced to Death, hundreds prosecuted or fired in Viet Nam

 

Vietnam tycoon receives death sentence

in fraud case

By Khanh Vu  Reuters

Posted April 11, 2024 7:15 am

 3 min read

Business woman Truong My Lan attends a trial in Ho Chi Minh City, Vietnam on Thursday, April 11, 2024. Thanh Tung/VnExpress via AP

A court in Vietnam handed the death sentence on Thursday to real estate tycoon Truong My Lan for her role in a 304-trillion-dong (US$12.5-billion) financial fraud, the country’s biggest on record, state media said.

Her trial, begun on March 5 and ending earlier than planned, was one dramatic result of a campaign against corruption that the leader of the ruling Communist Party, Nguyen Phu Trong, has pledged for years to stamp out.

Lan, the chairwoman of real estate developer Van Thinh Phat Holdings Group, was found guilty of embezzlement, bribery and violations of banking rules at the end of a trial in the business hub of Ho Chi Minh City, state media said.

“We will keep fighting to see what we can do,” a family member told Reuters, speaking on condition of anonymity. Before the verdict he had said Lan would appeal against the sentence.

Lan had pleaded not-guilty to the embezzlement and bribery charges, Nguyen Huy Thiep, one of Lan’s lawyers told Reuters.

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“Of course she will appeal the verdict,” he added noting she was sentenced to death for the embezzlement charge and to 20 years each for the other two charges of bribery and violations of banking regulations.

Vietnam imposes the death penalty mostly over violent offenses but also for economic crimes. Human rights groups say it has executed hundreds of convicts in recent years, mainly by lethal injection.

The Thanh Nien newspaper said 84 defendants in the case received sentences ranging from probation for three years to life imprisonment. Among them are Lan’s husband, Eric Chu, a businessman from Hong Kong, who was sentenced to nine years in jail, and her niece who got 17 years.

From perfumes to high finance

Lan started as a cosmetics trader at the central market in Ho Chi Minh City, helping out her mother, she told judges during the trial, according to state media.

She later founded her real estate company Van Thinh Phat in 1992, the same year when she got married, according to state media.

She was found guilty, with her accomplices of siphoning off more than 304 trillion dong from Saigon Joint Stock Commercial Bank (SCB), which she effectively controlled through dozens of proxies despite rules strictly limiting large shareholding in lenders, according to investigators.

From early 2018 through October 2022, when the state bailed out SCB after a run on its deposits triggered by Lan’s arrest, she appropriated large sums by arranging unlawful loans to shell companies, investigators said.

“The defendant’s actions not only violate the property management rights of individuals and organizations but also put SCB under scrutiny, eroding people’s trust in the leadership of the Party and State,” state newspaper VnExpress cited the jury as saying.

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The bank is currently propped up by the central bank and faces a complex restructuring under which authorities are trying to establish the legal status of hundreds of assets which were used as collateral for loans and bonds issued by VTP. The bonds alone are worth US$1.2 billion.

Some of the assets are high-end properties but many others are unfinished projects.

Before her fall from grace, she had played a key role in Vietnam’s financial world, getting involved in the previous rescue of troubled SCB more than a decade before she contributed to the bank’s new crisis.

She was found guilty of having bribed officials to persuade the authorities to look away, including paying $5.2 million to a senior central bank inspector, Do Thi Nhan, who was sentenced to life in prison.

Vietnam’s graft crackdown, dubbed “Blazing Furnace”, has seen hundreds of senior state officials and high-profile business executives prosecuted or forced to step down.

Corruption is so widespread that in some provinces many people say they pay bribes just to obtain medical services in public hospitals, according to a recent survey by the U.N. Development Programme and other organisations.

–Reporting by Francesco Guarascio; Editing by Peter Graff

Corruption is Everywhere > Would you believe Credit-Suisse? How about the King of Jordan? Swiss could be blacklisted by EU

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Credit Suisse faces charges in cocaine trafficking trial

The drug money laundering case centers on the bank’s ties with a criminal ring

© Getty Images / Medioimages

A Swiss criminal court opened trial proceedings on Monday against Credit Suisse, accusing the bank of failing to do enough to stop money laundering linked to drug trafficking by a Bulgarian criminal organization. Associated Press reports that the gang employed a wrestler who once hauled millions in currency by car to Switzerland.

The names of the defendants have not been made public, to protect their privacy, but Swiss prosecutors identified Credit Suisse by name in an indictment announced in December 2020.

The charge, which centers on a former manager at the Swiss bank and two members of the criminal ring, follows a years-long investigation into allegations of wrongdoing that apparently took place between 2004 and 2008.

According to AP, the case against the bank revolves around charges that it “did not take all necessary measures to halt the infraction of money laundering” by one of its employees.

Credit Suisse has denied any wrongdoing, saying during the hearing on Monday that it “unreservedly rejects as meritless all allegations in this legacy matter raised against it and is convinced that its former employee is innocent.” The bank added that it “will defend itself vigorously in court.”

The Swiss attorney general’s office said that, after the fall of communism, top-level athletes in Bulgaria “turned towards other sources of income, and numerous wrestlers received approaches from mafia clans.” Thus, one unnamed wrestler aimed to cash in by trafficking tons of cocaine through “mules” from South America to Europe by air and sea and then laundering the profits.

The proceeds from the drug sales entered Swiss bank accounts from 2004 to at least 2007 and were used to buy real estate in Bulgaria and Switzerland in particular, court proceedings show.

Prosecutors said that the wrestler’s “main offense was committed in February 2006, when he transported the equivalent of more than four million Swiss francs (over $4 million) in small denomination notes hidden in his car from Barcelona to Switzerland.”

They also said that a former Credit Suisse executive in charge of business relations with the criminal organization carried out transactions for the ring despite “strong indications that the funds were of criminal origin.”

The executive is accused of preventing the identification of the origin of the funds, which ultimately involved transactions of more than 140 million Swiss francs (about $150 million).

Credit Suisse has consistently rejected the allegations and has said the court could order the “disgorgement of profits” and a maximum fine of about $5 million.

Credit Suisse ignored murders while laundering cocaine cash,

banker testifies

Bank management accused at trial of knowingly accepting money from criminal activities

© Getty Images / Michaela Begsteiger

A former Credit Suisse banker, who had been previously accused of money laundering, has reportedly told a Swiss court that top management at the bank knew about murders and cocaine smuggling connected to a Bulgarian gang, but continued managing cash that is now at the center of a criminal trial.

The Zurich-based banking giant and one of its former employees are facing charges for failing to tackle money-laundering practices connected to drug trafficking by a Bulgarian criminal syndicate. The gang allegedly managed to launder millions of euros, with some of it delivered to the bank in suitcases stuffed with cash.

Credit Suisse has denied any wrongdoing and stood by its former bankers accused. The trial began last week and is scheduled to end in early March.

The case hinges on illegal relations established between Switzerland’s second-largest bank and former Bulgarian wrestler Evelin Banev and multiple associates, two of whom are also charged in the case. The Bulgarian cocaine trafficking gang allegedly employed Banev, who is accused of hauling millions in currency by car to Switzerland. The events reportedly unfolded between 2004 and 2008.

In an email from June 2005 read out in court last week, the banker played down press reports linking the murder of one of Banev’s associates a month earlier with drug trafficking.

“After the homicide we have decided to continue the business relationships,” the banker wrote in the email. “The said (short and imprecise) article linking the murder to Spanish cocaine… has not been confirmed.”

Last week, Banev’s attorney said in Sofia that his client denied any involvement in laundering money from drug trafficking through Credit Suisse. Meanwhile, the former wrestler was convicted of drug trafficking in Italy in 2017 and money laundering in Bulgaria in 2018. Banev was detained in September in Ukraine after Bulgaria and Romania sought his arrest.

The banker accused of helping conceal the criminal origins of the money, totaling more than 146 million Swiss francs in transactions, appeared in Federal Criminal Court in Bellinzona with her managers, who gave evidence. The banker’s identity cannot be reported under Swiss privacy rules.

Credit Suisse disputes the illegal origin of the money, according to a source close to the bank quoted by Reuters. The source also claims that Banev and his circle operated legitimate businesses in construction, leasing, and hotels.

King hid personal wealth in Credit Suisse accounts – media

Leaked data from the Swiss bank show King of Jordan Abdullah II

placed his personal funds in at least six accounts

Jordan's King Abdullah II attends the State opening of the Parliament. © Jordan Pix / Getty Images

Jordan’s monarch, King Abdullah II, has been named in the leaked trove of data from Credit Suisse bank, as the holder of at least six accounts where he has housed millions of dollars in personal wealth, The Guardian reported on Monday. Alongside Abdullah’s own accounts, his wife, Queen Rania, allegedly had another.

The leaked data about the Credit Suisse accounts comes months after the monarch was featured in the Pandora papers, another leak of data which revealed King Abdullah’s property portfolio, including premises in California and central London.

A spokesperson for Jordan’s king and queen stated there has been no wrongdoing on behalf of the pair, claiming that the source of their funds was entirely compliant with the relevant tax legislation. Under Jordanian law, King Abdullah is exempt from paying taxes.

According to the monarch’s lawyers, a large proportion of the funds held within his Credit Suisse accounts were derived from the inheritance he received from his father, King Hussein. The law in Jordan exempts the king from paying inheritance tax as well.

During the release of the Pandora papers, the UK media claimed that Jordanian intelligence forces had sought to block access to online stories about the monarch’s wealth. King Abdullah’s lawyers have denied this suggestion. It is not known if any similar attempts have or are set to be made in the wake of the latest revelations.

King Abdullah’s lawyers stated that only one of the monarch’s Credit Suisse accounts remains open, comprising investment companies established to serve as a trust fund for their children, as well as using the bank to hold proceeds from the sale of a “large wide body aircraft.”

Switzerland could be blacklisted as money-laundering state

The financial hub is dealing with the fallout from a huge leak

of Credit Suisse banking data

© Getty Images / Matthias Kulka

The European People’s Party (EPP), the largest political grouping in the European Parliament, called for a review of Switzerland’s banking practices on Monday, and for the country to be included on the EU’s dirty-money blacklist after leaked Credit Suisse documents revealed the bank’s dealings with shady clientele.

The Swiss banking giant has reportedly served a motley client roster for decades, which included heads of state and spy chiefs, as well as human rights abusers and sanctioned individuals.

“The ‘Swiss Secrets’ findings point to massive shortcomings of Swiss banks when it comes to the prevention of money laundering,” the EPP’s coordinator on economic affairs Markus Ferber said, adding: “When Swiss banks fail to apply international anti-money-laundering standards properly, Switzerland itself becomes a high-risk jurisdiction.”

The EPP released the proposal following media reports on Monday on the results of investigations into the leak of data on thousands of accounts held at the bank during recent decades. The investigation, called Suisse Secrets, identified clients of the Swiss bank who had been involved in torture, drug trafficking, money laundering, corruption, and other serious crimes.

Credit Suisse has strongly rejected any allegations of wrongdoing, saying that the media reports were based on “selective information taken out of context, resulting in tendentious interpretations of the bank’s business conduct.”

If Switzerland is added to the blacklist, it would face the kind of enhanced due diligence applied to transactions linked to nations including Iran, Myanmar, Syria and North Korea. The EU money-laundering blacklist currently comprises 21 countries, none of which are European.

Switzerland is not part of the EU.

Americans Losing Control of World Monetary System

UK support for China-backed Asia bank prompts US concern

The Asian Infrastructure Investment Bank agreement was signed in October
by 21 countries, including China

The US has expressed concern over the UK's bid to become a founding member of a Chinese-backed development bank.

The UK is the first big Western economy to apply for membership of the Asian Infrastructure Investment Bank (AIIB).

The US has raised questions over the bank's commitment to international standards on governance.
"There will be times when we take a different approach," a spokesperson for Prime Minister David Cameron said about the rare rebuke from the US.

The AIIB, which was created in October by 21 countries, led by China, will fund Asian energy, transport and infrastructure projects.

The UK insisted it would demand the bank adhere to strict banking and oversight procedures.
"We think that it's in the UK's national interest," said Mr Cameron's spokesperson.

'Not normal'
Pippa Malmgren, a former economic advisor to US President George W Bush, told the BBC that the public chastisement from the US indicates the move might have come as a surprise.

"It's not normal for the United States to be publicly scolding the British," she said, adding that the US's focus on domestic affairs at the moment could have led to the oversight.

Chinese construction site

However, Mr Cameron's spokesperson said UK Chancellor George Osborne did discuss the measure with his US counterpart before announcing the move.

In a statement announcing the UK's intention to join the bank, Mr Osborne said that joining the AIIB at the founding stage would create "an unrivaled opportunity for the UK and Asia to invest and grow together".

The hope is that investment in the bank will give British companies an opportunity to invest in the world's fastest growing markets.

But the US sees the Chinese effort as a ploy to dilute US control of the banking system, and has persuaded regional allies such as Australia, South Korea and Japan to stay out of the bank.

This is, indeed, another nail in the coffin of American control of the world monetary system. I fully expect the AIIB to use the Chinese Yuan as its base currency thereby further weakening the American dollar as the base of the world economy. Having a major western economy sign-on to that is of very great concern to Americans, as it should be.

In response to the move, US National Security Council spokesman Patrick Ventrell said: "We believe any new multilateral institution should incorporate the high standards of the World Bank and the regional development banks."

"Based on many discussions, we have concerns about whether the AIIB will meet these high standards, particularly related to governance, and environmental and social safeguards," he added.

Analysis: Linda Yueh, BBC chief business correspondent

It's a tricky task to align oneself with both China and the US. The Americans are apparently unhappy with the UK, while China has welcomed the British application.

It may be a pragmatic move, but it's hard not to offend one side or another.

I suspect this will be the first of many decisions to be taken by countries such as the UK to position themselves between the new economic superpower and the existing one.

The trick will be to come away with economic advantage at minimal political cost. We'll find out if this one will pay off for the UK.

'No consultation'
Some 21 nations came together last year to sign a memorandum for the bank's establishment, including Singapore, India and Thailand.

But in November last year, Australia's Prime Minister Tony Abbott offered lukewarm support to the AIIB and said its actions must be transparent.

US President Barack Obama, who met Mr Abbott on the sidelines of a Beijing summit last year, agreed the bank had to be transparent, accountable and truly multilateral.

"Those are the same rules by which the World Bank or IMF (International Monetary Fund) or Asian Development Bank or any other international institution needs to abide by," Mr Obama said at the time.

The Financial Times (FT) newspaper reported on Thursday that US officials had complained about the British move.

The report cited an unnamed senior US administration official as saying the British decision was taken after "virtually no consultation with the US".

"We are wary about a trend toward constant accommodation of China," the newspaper quoted the US official as saying.

However, in response to the UK announcement, World Bank president Jim Yong Kim told a news conference he supported the goals of the AIIB.

"From the perspective simply of the need for more infrastructure spending, there's no doubt that from our perspective, we welcome the entry of the Asian Infrastructure Investment Bank," he said.

Offence

The founding member countries of the AIIB have agreed the basic parameters that would determine the capital structure of the new bank would be relative gross domestic product.

Banking experts have estimated that, if taken at face value, this would give China a 67% shareholding in the new bank.

That's significantly different than the Asia Development Bank, which has a similar structure to the World Bank and has been in existence 1966. There, the majority stakes are controlled by Japan and the US.

Tony Abbott poses with Chinese President Xi Jinping at the
Apec summit banquet in Beijing - 10 November 2014

Speaking in Beijing last year, Mr Abbott said Australia would only sign up to "a genuinely multilateral body"

When asked if Britain would seek assurances before it signed on as a member that no one country would be able to unilaterally control the AIIB, economist David Kuo told the BBC that the UK "wouldn't have a great deal of say in the matter".

"He who pays the piper calls the tune," he said. "The UK could try and negotiate a power to veto projects but it is unlikely to get it," Mr Kuo, who is from investment advisers The Motley Fool, said.

The UK was caught between the US on the West and China in the East, he added.

"It hopes that it can exert force from within, rather than put pressure from the outside - but [the UK] is only one voice in a crowd of many."

With regard to the competition the AIIB would give the ADB or World Bank, Mr Kuo said there were plenty of infrastructure projects in Asia that needed funding.

"The existing sources of money can't do everything. So every little helps."