Thousands of Vietnamese swindled by online pyramid scheme

By Thai Son, Thanh Nien News

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An advertisement for the Khai Thai Company. File photo An advertisement for the Khai Thai Company. File photo


The six Khai Thai Company officials who were arrested early this month swindled thousands of Vietnamese citizens out of VND487 billion (US$23 million) in an elaborate pyramid scheme, according to the Ministry of Public Security.
Investigators are still identifying others involved in the Hanoi-based syndicate by combing through computers seized from their offices.
The arrestees included the company's Taiwanese general director, Hsu Ming Jung, and five locals, including director Dinh Manh Linh and director Doan Thi Luyen.
Police have also detained the director of the company's Cau Giay branch, Dinh Thi Hong Vinh, the director of its Long Bien branch, Tang Hai Nam, the director of the Ba Dinh Branch and chief accountant Trinh Hoa Binh.
Police seized VND20 billion (US$94,200) from the company's offices, VND70 billion from Jung's home and a number of computers and relevant documents.
According to Lieutenant General Tran Trong Luong of the Ministry of Public Security, this was a new and unprecedented scheme.
The suspects sought to swindle customers by posing as the operators of a lucrative gold and foreign currency investment firm.
The group began by seeking investors, he said.
Luong said the syndicate rented large offices in luxury buildings to win investors' trust.
They also recruited hundreds of employees, paid high salaries and bonuses and tasked them with luring people to deposit money for high interest returns.
The whole company operated as a pyramid scheme, Luong said.
The company’s employees believed they were earning 36-42 percent annual interest on deposits and were encouraged to offer lower interest rates to other investors.
The firm also offered employee bonuses of up to hundreds of millions dong to those who could attract major clients.
The company never invested its deposits, but distributed them among new investors and employees, police said.
The group founded Khai Thai in 2011 and modified its business license six times.
The company's current license permits it to trade gold and foreign currency, however, Vietnamese law prohibits the operation from conducting its businesses online.
Police are investigating the case.

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