VietNamNet Bridge – The Can Tho City police have wrapped up investigations into a case of swindling in which a person collected VND50 billion (US$3 million) promising high interest rates, and have transferred the case to the city People’s Procuracy for filing charges.

Dozens of people in the city’s Ninh Kieu District wrote to the police last month to complain about Vo Hoang Minh Khoa, who, after collecting the money, had said she was insolvent and could not repay them.

But this is only one of nearly 100 such frauds that have occurred nationwide in recent months, with hundreds of people losing billions of dong.

Last July Doan Vinh Dung, an official at the Gia Lai Province People’s Committee Office, wrote to local authorities accusing Mai Quy Tho, 38, of cheating his wife Phan Thi Hong of VND131 billion ($7.9 million) and 230 taels of gold (a tael now costs around VND17 million).

The couple told investigating agencies that Hong met Tho early last year when Tho had introduced himself as the representative of a local beer company.

In April Tho borrowed VND5 billion ($303,000) from Hong and paid her 6 per cent interest a month. Two months later, he repaid the entire loan.

Then, from July 2007 to June this year Tho borrowed money from Hong several times until it added up to VND150 billion ($9 million).

Hong reportedly borrowed the money from 48 people at a monthly interest rate of 4 per cent. Many loaned her the money without documentation because they trusted her.

She loaned it in turn to Tho to pocket the interest difference of 2 per cent.

To impress Hong, Tho always came in expensive business suits and by two different fancy cars.

But one day he disappeared with her money.

According to preliminary investigation by the Gia Lai Province police, Tho, who lives in Da Nang City, is only a marketing employee for a brewery in Kon Tum Province.

The police have filed a suit against Tho and issued a warrant, but he is still absconding.

Widespread practice

In the past four months there have been 10 such fraud cases in Da Nang, 21 in Binh Dinh Province’s Quy Nhon City, and 33 in Gia Lai Province.

Many victims borrowed money from banks and then lent it to "borrowers" to enjoy the interest rate differential, investigators reported.

According to the State Bank of Viet Nam’s Gia Lai branch, 29 of the local victims had borrowed VND52 billion ($3.1 million) from commercial banks.

Nguyen Thi Hoa (not her real name), a victim of Nguyen Quynh My Ngoc, director of the Ngoc Boi Private Company in Da Nang, said she lent VND5 billion ($300,000) to Ngoc, including VND2 billion she borrowed from a bank.

Not much later Ngoc declared bankruptcy and the Da Nang police arrested her in August on charges of swindling nearly VND200 billion ($12 million) from her lenders.

Hoa said she has since been facing a very difficult situation. She has to borrow tens of millions of dong every month to pay interest on the bank loan, and maybe has to sell her house to repay the loan.

Vo Van Nam, who teaches at the HCM City University of Pedagogy’s Psychology and Education Faculty, said people are normally greedy that when they see the possibility of fat profits they ignore the possible risks.

In almost all of the nearly 100 cases of fraud, the perpetrators took advantage of this mentality to fleece the victims, he said.

Lawyer Ngo Dinh Hoang told Nguoi Lao Dong (the Labourer) newspaper that people should make loan contracts when they lend money to protect their rights.

They should never rely on oral agreements, Hoang warned.

(Source: Viet Nam News)