40 people, including three Chinese citizens, went on trial this week after being prosecuted for granting loans in civil transactions at unreasonably high interest rates, money laundering, real estate appropriation, bribery, pot brokering – wine and fraudulent appropriation of property, according to the indictment.
The trial is expected to resume on April 22.
According to the indictment, Lu Wang, 37, was identified as the mastermind of the loan shark ring.
Li Xiao Hu, 41, was responsible for accounting and employee management, and Wu Jian Chao, 42, was responsible for receiving money from payment intermediary companies to pay employee salaries and operating expenses .
The remaining 37 defendants are Vietnamese accused of helping Chinese nationals operate a loan shark ring, setting up ghost companies and using violence to recover money from debtors.
In 2018, a group of Chinese people came to HCMC and started running the loan shark network through mobile apps and websites.
Nguyen Chanh Thien, 31, was hired to help run the network with his initial monthly salary of VND8 million, but which was later increased to VND18 million.
Thien hired many people to create and purchase pawn shops.
According to authorities, Thien and his accomplices signed contracts with nine intermediary companies to help the Chinese group hide huge profits. The network used 5,000 unofficial bank accounts to circulate money, thereby organizing money laundering and using numerous illegal methods to move money out of Vietnam.
Thanks to ghost companies, the network recruited hundreds of people.
The network has implemented more than 65 mobile applications and websites to attract borrowers. One team specialized in promoting these apps on social media while another team was responsible for finding customers who were encouraged to borrow money without collateral.
Customers wishing to borrow money from the network would be asked to log in to the registration link with the required information, including their full name, bank account, ID card, phone number and contact number of a parent.
Each debtor could borrow up to 12 million VND each time with interest rates of 35 to 40 percent, equivalent to 2,000 to 2,350 percent per year.
Those who fail to pay their interest on time will be reminded, while those who are several days late will be threatened, slandered, insulted and defamed on social media.
The ring was discovered by Quang Nam police last year when some victims who failed to pay on time were defamed on social media.
According to authorities, since it began operating in 2018, the network has provided loans of more than 20 trillion dong to more than a million people nationwide, accumulating illegal profits of more than 8 trillion dong.
They organized money laundering and illegally transferred more than 5 trillion VND out of Vietnam in many forms, mainly virtual currency.
“This is the largest transnational online lending network ever created,” according to Quang Nam police.
Some Chinese involved in the network have left Vietnam. Among those arrested, Lu Wang was accused of profiting from nearly 7 billion VND, and Li Xiao Hu from more than 630 million VND.
The 37 Vietnamese who helped the Chinese suspects exploit the network were paid between 6 million and 30 million VND.
