3 arrested in Vietnam for e-commerce fraud

TN News

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Police in the Central Highlands province of Dak Lak Thursday arrested three executives of an e-commerce company that was recently shut down for fraud and tax evasion.

Ngo Van Chien, former director of Muaban24 Online Trade and Training Company (MB24)'s Dak Lak town office, Tran Van Su, current director, and Dang Anh Tuan, director of the Buon Ma Thuot town branch, face charges of fraud.

A report on Dan Viet (Vietnamese People) news website said since the branches were opened more than six months ago, they have tempted over 900 people into buying 1,838 online "shops" for nearly VND1.8 billion (US$85,450).

The transactions were not documented and both the branches failed to properly pay taxes, police said.

Chien, Su, and Tuan are the latest to be taken into custody for a massive fraud the police allegedly found at the Hanoi-based MB24 Company last week.

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 taxes.

Each shop was priced at VND5.2 million ($248.43), and claimed to offer buyers a place to buy and sell goods at cheap prices.

But while people paid real money to the company, they got virtual money in return.

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While 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 money to others instead, the news website said.

Most of the members were found to be from remote areas and not computer-savvy or really 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 a new member.

On August 1 and 2 three company bosses and three executives at a branch in the northern province of Phu Tho were arrested for fraud and tax evasion.

Police in Hanoi are hunting for board chairman Nguyen Van Minh, who is on the lam.

The company's offices in seven provinces and cities are under investigation, Dan Tri reported Friday. 

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