Friday , April 12 2024

Massive fraud trial postponed as accusers don’t show

A former Hanoi company chairman’s trial, for allegedly defrauding over $100 million from more than 2,500 people by selling them phony “investments”, has been rescheduled as hundreds of his accusers did not show up.

Pham Thanh Hai, former chairman of the International Trade, Investment and Development Technology Company (IDT), was supposed to stand trial before the Hanoi People’s Court on March 29, but hundreds of his alleged victims were absent, so the trial has been rescheduled for April 19.

The postponement is the latest development in a multi-year fraud case that began when Hai was arrested in 2015.

He was sentenced to life imprisonment for fraud back in 2018, but an appeal court found the ruling faulty and called for another investigation. One reason was that Hai was believed to have accomplices somehow omitted from the investigation.

On October 19, 2015, Hanoi police forces raided IDT headquarters and found a store of contracts calling for large amounts of money as capital investments in projects to be paid back at astoundingly high interest rates of up to 50%. But the company was not authorized to mobilize capital or perform credit activities.

An investigation revealed that Hai, who founded IDT and became chairman of the IDT management board in 2007, founded a website in 2008 to host “conferences” on teaching people “how to get rich.”

In what were described as “lessons,” Hai said he had a PhD and that he had a wide breadth of investment and business experience in the Soviet Union. He said his IDT company dealt in education, management, foodstuffs, chemical production and conference hosting, and had projects calling for investments that would pay back high interest rates, among other claims.

Authorities said Hai provided his victims investment contracts that promised to pay back at interest rates of 40-50% a year. Hai gave bonuses to those who managed to persuade others to sign contracts and give money, and he also threw parties and organized vacations for these so-called investors.

But prosecutors said Hai used the money he raised for personal purposes while instructing IDT accountants to process the contracts as company deals. Hai also used the IDT seal on the contracts to gain the trust of his victims.

From October 2014 to October 2015, Hai managed to mobilize over VND2.725 trillion ($116.17 million) from 2,574 people. An investigation revealed that these numbers might not be entirely accurate as Hai also instructed his accountants not to record the total amounts of money.

Hai did not inform his “investors” of how their money would be used. Authorities said Hai ended up using only VND99 billion (3.6% of the amount of money) on 9 projects.

All 9 projects either produced no or little profit (VND2 million-200 million a year).

Hai said he knew the projects did not generate the profits as he had promised, so he decided to mobilize even more money from others to pay back his “investors” and to “maintain his personal reputation.” However, to date, Hai has still been unable to pay back any of the money as promised.

Claims of innocence

Of the nearly 2,600 people who had given Hai money, prosecutors said around 2,000 people have not reported themselves to authorities. Among those who did, authorities determined the amount of money stolen from them to be a total of VND576 billion.

Of the 600, 294 people said they were introduced to IDT conferences though friends, acquaintances or Internet promotions. They thought the company was launching promising projects and offering investment contracts at high interest rates. They believed Hai had many years of experience in investment and business, and so they believed in the projects he advertised.

“If I knew I was giving Hai money for personal investment, I wouldn’t have done so,” several victims said, demanding that IDT and Hai compensate them for their losses and take responsibility before the law.

Meanwhile, 92 accusers have retracted their complaints, saying that Hai did not trick them. They are calling for him to be set free.

A 95-year-old woman in Hanoi’s Thanh Xuan District on March 29 told the court that Hai was “intelligent, talented and visionary,” and that he did not trick her. She requested that Hai be proclaimed innocent and set free so he could continue his “education.”

Another 48-year-old victim said Hai had actually paid his “investors” more money than the amount of money that had been mobilized. “It means Hai did make a profit,” the man said, adding that he also wished for Hai to be set free.

Twenty one bank accounts registered to Hai and certain former IDT employees, with funds totaling around VND17 billion, have been frozen pending the court’s decision.

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