2 more arrested in ecommerce fraud case in central Vietnam

TN News

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Police in the central province of Thanh Hoa Monday arrested two executives of an ecommerce company suspected of having defrauded thousands of people.

Nguyen Van Huy, 29, director of Muaban24 Online Trade and Training Company (MB24)'s branch in Thanh Hoa, and his subordinate, vice director Le Ngoc Chung, 27, were the latest suspects taken into custody after the company and its branches were busted in Hanoi and at least seven other provinces and cities earlier this month.

Since August 1, police have arrested ten executives from MB24, including 39-year-old Ngo Van Huy, director general, and 27-year-old Le Van Cuong, deputy director general.

Thanh Hoa police said that the local branch has convinced over 5,000 people, including farmers, students and teachers, into buying shops on the company's online markets, since it was founded in August of last year 

As of the time the branch was closed, it had sold 8,274 shops for some VND43 billion ($2 million), they said.

According to police findings, MB24 defrauded people by offering them online shops for VND5.2 million ($248.43) for them to buy and sell goods at cheap prices.

But while people paid real money to the company, they got virtual money in return. Although they were told initially that the virtual money could be exchanged into real money, when someone wanted to quit, they were told to transfer the virtual funds to others instead.

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Moreover, most of the members were found to be from remote areas, not computer-savvy or even particularly interested in buying or selling goods online; they were lured by the commission of VND1.5 million ($70.9) that the company promised to pay them for signing up new members.

The Dan Tri news website quoted the Ministry of Public Security's hi-tech crime department C50 and Hanoi police as saying that the company had more than 50 branches in 32 provinces and cities.

In the past year it coaxed tens of thousands of people into buying some 120,000 of its shops for over VND600 billion ($28.48 million), but evaded paying taxes.

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