Hanoi police arrest property firm CEO over Ponzi scheme

The Hanoi Police Department has issued an arrest warrant for Vu Thi Thuy, CEO of Nhat Nam Investment & Trading Real Estate JSC, over a Ponzi scheme she allegedly set up to appropriate a huge amount of money.

Nhat Nam was founded in July 2019 and is headquartered in Ho Chi Minh City. Thuy, 40, holds 50% of its shares (equivalent to VND100 billion or $4.16 million), while Mai Thanh Tung and Vu Duc Tai each have 25%.

For more than three years, Thuy and her accomplices have been raising funds through a so-called “business co-operation contract”, which enticed a large number of investors. The investors were required to keep information confidential and proceed civil settlements rather than criminalizing disputes if any.

Nhat Nam has established many branches and real estate transaction offices across the country and coaxed many investors into capital contribution with pledges to give them high interest rates of 5-7% per month or 60-84% per year and other incentives.

As an agreement, the investors received their payments via banks. However, the transfers were processed using Thuy’s personal bank account instead of the company, probably for tax invasion.

According to financial experts, under Thuy's Ponzi scheme, money was taken from new investors to make payments to earlier ones. Authorities had tried to warn people against investing in Nhat Nam by many means, for instance Letter 518/DK issued by the Ministry of Public Security’s department of economic security in August 2022. In early 2023, the media reported that many Nhat Nam investors had not received their earnings as promised.

In addition to business co-operation contracts, Nhat Nam also lured people by offering them strategic shareholder certificates and internal stock purchasing options. The firm, however, failed to pay or buy back shares as promised.

Furthermore, they created a pyramid snowball selling model and recruited brokers. For every network of five brokers that expands to 10, and with sales up to VND10 billion ($416,000), they would receive commission of 7%. As a result, many people have thrown a huge fortune or even their entire saving lives into Nhat Nam but received nothing.

More seriously, in February 2023, Nhat Nam began a rug pull by informing its investors that they needed to return their original contracts for a legal status update. A new entity called Song Da Nhat Nam was registered on Novenmber 21, 2023. Thuy holds 90% of shares while Pham Van Tuyn and Trinh Van Ton hold the remaining 10%.

For investors who signed new contracts in February 2023, they could expect to receive their interest payments in June. For those who didn’t convert to Song Da Nhat Nam, their benefits could be retained but rely on the company’s business picture.