The Biggest Scam in the World | ₹2,160,000,000,000 Vietnam SC Bank Scam!

In this 21st century where technology can watch almost everything and easily spot when something strange happens, it's surprising that one person was able to do something so wrong and so big without getting caught right away. This scam is so big that any other scam you have heard might look small. 

The scandal centers around Vietnam's Sai Gon Joint Stock Commercial Bank (SCB) and Truong My Lan who has carried out one of the largest financial frauds ever, stealing ₹2,16,000,00,00,000 from SCB.  

As we look closer, we'll see how Lan's actions revealed big flaws in banking systems. 

The Background story 

Truong My Lan is a property developer born in a small village 'Ho Chi Minh' in Vietnam. Vietnam was a very poor country back in the 80's, it is still developing now. Lan also belonged to a poor family, her mother had a tea stall, and Lan helped her mom sell tea. Lan's business sense was good since childhood, she used to sell beauty products in her teens and earn bread and butter for the family.  

In the early 1980s, Vietnam's law didn’t allow private companies to purchase land. However, a new government came into power, and amended the law, allowing private companies to buy land. In 1986, Vietnam introduced new reforms that permitted private companies to engage in buying and selling land. Consequently, several banks started providing loans to businesses for property acquisitions, which resulted in a rapid increase in the real estate market in Vietnam. 

Many real estate developers were making profits by purchasing land by bribing banks to secure loan approvals and then selling it at inflated prices. One notable developer among them was Lan, who established 'Van Thinh Phat,' a real estate empire that brought her immense wealth by the 1990s in this process. 

The Unfolding of the Scam 

Lan was extremely wealthy already with her real estate company. But now she wanted to expand it further. Taking loans from banks gave her only marginal profits, she also had to pay high interest and bribes to the banks, which left very little profit to Lan. Hence Lan came up with the idea of starting her own bank! 

Birth of Sai Gon Joint Stock Commercial Bank (SCB) 

Lan thought that if she owned a bank, she wouldn’t have to give bribes, pay high interest rates, or worry about how much money she could take. So, she acquired three small banks and merged them into one, creating Sai Gon Joint Stock Commercial Bank (SCB) in 2012. At first, SCB didn’t get many deposits, so Lan focused heavily on public relations. Her efforts paid off as people began to trust the bank and started depositing large amounts of money. 

How the Fraud Was Executed 

Now Lan had the money coming into the bank, but Vietnamese law prohibited any individual from holding more than 5% of the shares in a bank. This limitation meant that Lan couldn’t withdraw as much money as she wanted. To get away from this, Lan came up with another plan. She created several shell companies—businesses that don’t actually operate or have employees—located in tax havens to avoid paying taxes. These companies were named after different people that Lan appointed, making it hard for anyone to trace them back to her. 

Through hundreds of shell companies and people acting as her proxies, Truong My Lan owned more than 90% of Saigon Commercial. Lan started giving huge loans to the shell companies, all the loan money was coming from people's deposits, this way she gave a huge sum of $44 billion to the shell companies! She withdrew approximately $4.3 billion from the $44 billion. 

How the Scam Came to Light 

Everything was going smoothly, and Lan became one of the richest known entrepreneurs in Vietnam.  

Since 2012, corruption has been considered an obstacle to doing business in Vietnam, and the use of facilitation payments has been widespread when dealing with frontline civil servants at all levels of society. As of January 2018, Vietnam scored one of the highest rates of bribery practices. 

That's when the Vietnam government brought up an Anti-Corruption Campaign in 2019. This campaign was so strictly conducted that anyone found involved in any kind of corruption was arrested. During this time a few former employees of SCB have spread the word that Lan is withdrawing money from the bank and sending it to shell companies. This information went so viral through WhatsApp and other social media channels that people lost trust in the bank, and those who deposited their money in the bank panicked and ran to the bank. 

The Impact on SCB

Those who went to the bank in the beginning could receive their money. Eventually, everyone went to the bank to get their money back, but the bank didn't have that much money and told them that they were bankrupt. The issue became so huge that people started protesting to get their money back from the bank. 

The Aftermath: Did People Get Their Money Back? 

After the scam was exposed, authorities moved quickly to recover the stolen money. This is when the government came into the picture. Lan's possessions were frozen, and bank accounts were examined. Out of $44 Billion around $17 billion was recovered, but still around $27 billion was missing. Hence, certain victims did get back some amount of their cash, but numerous others continue to wait for their money. 

The Fate of Truong My Lan: Government Action and Legal Consequences 

Lan and other SCB officials allegedly bribed state officials with $5.2 million to cover up the fraud, which has been said to be the biggest ever in Vietnam. Prosecutors said the total damage caused by the scam amounted to $27 billion — equivalent to 6% of the country’s 2023 GDP. 

After years of investigation on 6 October 2022 Lan was arrested on charges of many counts of financial fraud. She was accused of illegally issuing tens of millions of US dollars worth of bonds in 2018 and 2019. It is also alleged that she used 916 fake loan applications to secure 304 trillion dong—equivalent to US $12.5 billion—from the Sai Gon Joint Stock Commercial Bank.  

During the March 2024 trial of Trương Mỹ Lan, the judge stated that SCB should have been put under government supervision back in 2018, but due to a bribed report from an inspector at the State Bank of Vietnam, this action was delayed until 2022. 
She was found guilty of committing a huge fraud and on April 11, 2024, she was sentenced to death. Her property was also confiscated by the State prosecutors to refund the defrauded people although some losses could not be compensated.  

This case acted as a rebuke against grave consequences for money laundering activities in Vietnam which reinforced the response of its authorities towards corrupt acts and swindles.