She used VND4,144 billion to pay back earlier investors, while nearly VND5,000 billion was embezzled and spent for personal purposes.

According to the indictment, on July 2, 2019, Vu Thi Thuy founded Nhat Nam Company with charter capital of VND50 billion. By the end of July 2019, she had changed its registration from Nhat Nam Real Estate Service Trading Investment Co., Ltd. to Nhat Nam Real Estate Trading Investment JSC.

At that time, the company raised its charter capital to VND200 billion, of which Thuy contributed VND100 billion, her ex-husband Mai Thanh Tung VND50 billion, and another person named Vu Duc Tai VND50 billion. Thuy served as the company’s legal representative, chairwoman of the board, and CEO.

In fact, Tung and Tai were only named as shareholders and did not contribute capital to the company. By September 2022, Thuy changed the business registration, moved the company headquarters to HCMC, and reduced the charter capital to VND80 billion, with the defendant contributing 99.8 percent.

The indictment states that after establishing Nhat Nam Company, Thuy began raising funds from investors. She created a network to approach and persuade victims through a corporate leadership team consisting of herself and two deputy CEOs, Tran Thien Tam and Trinh Van Ton.

Vu Thi Thuy also established a Strategic Board, an Advisory Board, business groups, and representative offices in various provinces to implement the strategy of advertising, introducing, and expanding the scope of capital mobilization for the company. The indictment shows that Nhat Nam Company opened 32 representative offices in Hanoi, HCMC, and other provinces and cities.

The 'herding' tricks

To attract many investors, Thuy lured the naive by promising that upon signing a contract and depositing money with Nhat Nam Company, they would receive profit distribution (including both principal and interest) on a daily basis (excluding holidays). After two days, the company would pay a profit distribution rate of 7–8 percent/month, equivalent to the investor receiving 168–192 percent of the contract value (over a 2-year term).

Additionally, every month, or during company establishment events, holidays, and Tet, Thuy offered promotional policies and rewards to investors who signed contracts. The larger the investment amount, the higher the incentive was, such as giving gold, travel vouchers, and adding cash to the contract value.

In addition, investors were granted Expanded Shareholder Certificates, received dividends every three months, were given a company real estate purchase voucher worth VND250 million, and received instant bonuses. 

These incentive policies were only offered for a short period of 10–30 days, creating a sense of urgency for investors to sign contracts immediately so as not to miss the promotion, leaving individuals little time to consider and evaluate.

In reality, Nhat Nam Company's business activities in real estate investment, restaurants, and hotels were ineffective, incurring losses of billions of VND. However, in 2022, Thuy establish a series of companies more, including Nhat Nam Son Tay Investment and Construction JSC, Song Da Nhat Nam Group JSC, Nam Nhat Khang Investment JSC, and Song Da Invest JSC, to continue using these legal entities to sign capital mobilization contracts.

The indictment points out that the Nhat Nam Real Estate CEO used a small portion of the investors' contributed capital to purchase some land in provinces and cities like Hanoi, Thanh Hoa, Central Highlands, Dak Lak, Tay Ninh, Phu Quoc, and Bac Giang.

Still, this land was mostly agricultural land, perennial crop land, or 50-year leased land, with only some areas used for building subdivided houses, which were then advertised as large real estate projects developed by Nhat Nam Company.

To build trust, and to provide status and means for company members (Strategic Board, office managers), Thuy even signed fake contracts (where no money was actually deposited into the company) worth billions to tens of billions of VND and granted Strategic Shareholder Certificates to the Deputy General Directors and Strategic Board members.

Afterward, the company's Board of Directors and Strategic Board used these contracts and certificates for advertising to attract investors. Thuy instructed the accountant to pay "sham" profit distributions for the "sham" contracts as if they were real contracts.

Thuy also instructed accountants to pay out fake profit distributions for these non-existent contracts, later deducting them from internal bonuses and commissions.

Through these tactics, from 2020 to 2023, Thuy and her accomplices convinced thousands of investors to sign more than 43,000 investment contracts, collecting VND9,113 billion. She used VND4,144 billion to pay back earlier investors, while nearly VND5,000 billion was embezzled and spent for personal purposes.

T. Nhung