What seen from exposed multi-billion-dollar financial scams in Vietnam?

Terms like Mr. Pips, Trieu Nu Cuoi (Million Smiles), GFDI, and investment fraud became some of the hottest keywords trending on social media in Vietnam in 2024 - the year that witnessed an unprecedented surge in exposed investment scams, with figures that could shock anyone.

Shocking numbers

A 2024 cybersecurity survey by the National Cybersecurity Association shows that for every 220 smartphone users in Vietnam, one person falls victim to online scams, accounting for 0.45%. The total losses from these scams are estimated at a staggering VND18.9 trillion ($744.6 million).

Of the victims, only a very small percentage are able to recover their money. Up to 88.98% of users said they immediately gave warnings to their friends and families when they fell victim of a scam, but only 45.69% of those surveyed reported the scam to the authorities.

The number VND18.9 trillion is not just a number. It highlights the severity of technology-related investment frauds. People were once shocked by the massive confiscated assets of over VND5.2 trillion ($204.85 million) related to Mr. Pips, a popular “investment guru” on TikTok, Telegram, and other social platforms before his arrest.

On December 20, 2024, the Hanoi police announced that they had coordinated with Interpol to issue an international arrest warrant for Le Khac Ngo (34, in Phu Dien, Bac Tu Liem district). Ngo was an accomplice of Pho Duc Nam, known as TikToker Mr. Pips, in the criminal case of “fraudulent appropriation of property, money laundering, harboring assets obtained from criminal acts, and failing to report crimes.”

Nam, Ngo, and 29 other individuals were formally charged in this case. However, Ngo had fled, and police are calling for his surrender in exchange for leniency.

On the afternoon of December 26, Major General Nguyen Thanh Tung, deputy director of the Hanoi Police Department, confirmed that following the dismantling of the fraud network led by Nam, investigators were making efforts to recover appropriated assets. At that time, authorities seized additional assets including a Mercedes G63 worth VND12 billion ($472,720), 18 luxury apartments, and real estate worth about VND100 billion ($3.94 million).

By December 10, the police had seized assets totaling over VND5.2 trillion, including VND316 billion ($12.46 million) in bank accounts, VND9 billion in bonds, over VND200 billion in savings books, VND69 billion in cash, $2.3 million, 890 SJC gold bars, 246 kg of raw gold, 31 supercars and seven high-end motorcycles, 59 luxury watches worth around VND300 billion, and 84 jewelry pieces made from gold and encrusted with diamonds.

Another shocking case is the investment scam involving the Danang-based GFDI Investment Consulting One Member Co., Ltd, established on May 17, 2018, with a charter capital of VND80 billion ($3.15 million).

Since its establishment, Nguyen Quang Hoang - chairman, director and legal representative, had developed the company's business model by borrowing money from the public through "asset borrowing agreements."

From November 2023, due to investment losses and financial difficulties, in order to sustain the company's operations, Hoang directed employees to "defraud to appropriate assets" from customers under the guise of signing loan agreements, using funds borrowed from new customers to pay off the debts of previous ones.

In early November 2024, the company lost its ability to repay 7,541 customers, with a total outstanding principal of over VND3.7 trillion ($145.76 million).

Tricks exposed

Despite the diverse and sophisticated forms, the common thread among financial frauds in the past year is that the perpetrators have a deep understanding of the desire for quick wealth among social media users. They exploited the naivety and lack of knowledge of individual investors to "set traps."

Many fraudsters created glamorous, luxurious, and extravagant personas as a façade to portray themselves as successful financial experts to lure their victims. At the same time, they exploited technological platforms to carry out their fraudulent activities.

A survey conducted by the National Cybersecurity Association revealed that the three most common tactics include luring users into fake investment schemes that promise high returns, impersonating the identities of organizations or institutions to gain credibility and deceive victims, and scamming individuals with fake prizes or large promotional offers.

According to survey results, 70.72% of users have received invitations to invest in financial schemes on trading platforms of unknown origin, promising zero risks and high profits. This is not surprising, given recent cases such as Trieu Nu Cuoi (Million Smiles), a company masquerading as an investment firm and led by Ho Quoc Than, which was recently raided by Hanoi police.

To participate in the Trieu Nu Cuoi "ecosystem," individuals and businesses were required to pay "blessing" fees to own the quantum financial system (QFS) currency, priced at VND4-5 million ($197) per QFS for individuals and VND39 million ($1,537) for businesses.

According to its advertisements, the QFS was supposedly backed by the legacy of multiple sources and families, preserved over hundreds of years. It was also claimed to be recognized by 48 countries and scheduled to be activated in October or November 2024 in Vietnam.

Participants in the "ecosystem" were promised financial support to restructure and grow their businesses without collateral or interest payments. Additionally, Than said if individuals or businesses wanted to withdraw from the scheme for any reason, he would return the money.

Police investigation showed that approximately 100 businesses and nearly 400 individuals had purchased QFS coins, with a total value amounting to tens of billions of VND (VND10 billion = $394,166).

Than had cultivated an image of a welfare conglomerate for the public's benefit, in order to build trust among individual and business clients to purchase the coins.

At the same time, he instructed the issuance of "welfare cards," which required an upfront payment of VND2.6 million ($102.5). For one year, customers could use the card to shop with special discounts, offering VND500,000 worth of purchases per week (available on Saturdays and Sundays).

The card had no geographical restrictions and was valid for use 30 days after purchase. To date, the company had issued over 2,000 welfare cards.

To boost sales of the "welfare cards" to the public, Than organized numerous livestream sessions on social media platforms like Facebook and YouTube, and hosted online meetings on Zoom, attracting participants from various provinces and cities.

He used Buddhist teachings to introduce the concept of welfare and his own commitment to spreading goodwill, promoting the company's activities to a wider community.

Although Than had no official occupation, he rented luxury houses and set up the company's office in prestigious locations, driving high-end cars to gain the trust of potential investors.

Before Than, there were even more sophisticated and larger-scale investment scams, which, of course, led to even greater losses for investors - the cases of Mr.Pips and Mr.Hunter.

Born in 1994, Pho Duc Nam, better known by his nickname Mr.Pips, was a popular TikToker among those interested in finance and investment. Despite his young age, his TikTok channel gained millions of views, with clips on financial issues that were considered extremely difficult for many to follow.

Moreover, Mr.Pips built an image associated with luxury and wealth, frequently appearing in upscale places, driving supercars, and flaunting unimaginable amounts of money.

Under the guise of being an expert and "trading tycoon," Mr.Pips frequently shared "investment secrets" and promised high returns with strategies that were marketed as "guaranteed wins." Many people, entranced by his promotion, placed their trust in his advertisements, joining investment groups organized by Nam or investing in financial products he introduced.

Mr. Pips was also known as the founder and operator of a community group with about 20,000 members on Telegram, where investors of all levels could connect and share experience. Additionally, Nam created a YouTube channel and several online courses to teach forex trading, as well as to guide how to analyze market trends.

Initial investigations revealed that in June 2019, Nam collaborated with Ngo to establish a fraud network to defraud people, using a model of brokerage firms. Nam and his accomplices used several fake company accounts and e-wallets to receive money from customers. They lured customers into private chat groups and guided them on how to deposit and withdraw money smoothly to build trust. After that, they advised them to make large trades and encouraged them to deposit even more money and use leverage to quickly lose all their money in their accounts.

Once the victims lost all their money, the scammers invited them to join a new platform with even more attractive promises, claiming they could win back the money they lost, thus continuing to defraud their victims.

To carry out their crime, Nam and Ngo created the website "artexvina.co" to recruit employees and build an image of a professional, well-organized company specializing in providing investment consultancy for international stock trading. They set up numerous branches across the country, primarily in Ho Chi Minh City, Hanoi, and Da Nang, and even Cambodia.

The perpetrators also established multiple departments (such as IT, support, administration, security) and provided formal training within their system. They then used their trained staff to approach, advise, and encourage customers to invest.

Operating under the guise of a company offering services in telemarketing, telesales, financial investment consultancy, and stock brokerage (investing in stocks of multinational companies listed on international stock exchanges, such as Facebook, Apple, Pepsi, Microsoft, Adidas), the scammers successfully lured customers into their scheme before eventually defrauding them.

Investigators confirmed that the suspects managed and operated 21 websites and used seven bank accounts for fraud.

Vo Hoang Hai, deputy general director of Nam A Bank, emphasized that the biggest problem of individuals when they begin investing is their lack of risk analysis and assessment skills.

"Everyone wants to make money legitimately. Unfortunately, some exploit the desire for quick wealth, taking advantage of victims' lack of knowledge," he said.

Hai noted that to reduce and prevent fraud, it is crucial to strengthen financial education by integrating such content into school curricula and organizing financial investment or management training courses for people from a young age.

In addition, he emphasized that regulatory agencies should regularly cooperate in conducting communication campaigns to spread investment knowledge and raise awareness of potential risks, helping investors equip themselves with skills and knowledge to protect themselves.

Echoing Hai, lawyer Tran Tuan Anh, director of Minh Bach law firm under the Hanoi Bar Association, noted that scams like Mr. Pips, Trieu Nu Cuoi, and GFDI often target the greed and ignorance of investors.

"To avoid falling into these sophisticated traps, investors should be cautious of unusually high promised returns, as this is often a sign of fraudulent activities. Before investing, they must thoroughly research information about organizations and projects through official channels, and only invest in platforms licensed by regulatory authorities.

People should seek reputable lending institutions such as banks or legitimate financial companies and never share personal information or bank account details on unreliable websites or apps.

“A crucial thing for investors is to adhere to investment discipline: trust only market data and official announcements to determine profit-taking or loss-cutting points and avoid falling into the psychological trap of FOMO (Fear of Missing Out). Additionally, improving financial knowledge and managing personal risks are vital steps to protecting oneself from potential dangers," lawyer Tuan Anh noted.

In reality, the government is highly concerned about investor protection. Many legal documents, such as Decree 144/2021/ND-CP on penalties for violations that harm the assets of other organizations or individuals, Decree 98/2020/ND-CP on penalties for violations related to multi-level marketing activities, the Penal Code, and the Investment Law, serve as a reference for citizens to protect their interests.

Regarding sanctions, individuals or organizations involved in fraudulent financial investment schemes that attract large numbers of participants will face administrative fines. Under Article 73, Clause 3 and Clause 11 of Decree 98/2020/ND-CP, individuals who commit financial investment fraud will be fined between VND10-20 million ($788). For organizations, the fine will be double that of individuals, in addition to being required to return any illicit profits gained from the violations.

Moreover, individuals or organizations could be criminally prosecuted for asset fraud under Article 174 of the Penal Code, with penalties depending on the nature and severity of the offense. The highest penalty can be life imprisonment if the fraud involves assets valued at VND500 million ($19,708) or more or if the crime is committed in a state of war or emergency. “Therefore, citizens should familiarize themselves with these regulations to recognize risks and protect their rights,” he stressed.

"Online scams will continue to be a major issue in 2025. In addition to measures from regulatory authorities, users must remain vigilant and enhance their cybersecurity skills when navigating the online space. They must never share personal information with unfamiliar individuals or untrustworthy services, always verify any calls or transactions involving money transfers, and use anti-scam apps like nTrust to filter and block fraudulent phone numbers and harmful websites," said Vu Ngoc Son, head of the technology department at the National Cybersecurity Association.