Vietnam police expand probe in massive ecommerce fraud

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Police in two provinces have started investigating the branches of an ecommerce company after it was busted on fraud and tax evasion suspicions involving hundreds of billions of dong in Hanoi this week.

A Dan Tri report Saturday quoted Colonel Ma Van La, director of the Police Department in the northern province of Bac Kan, as saying that they have started investigating the Bac Kan branch of Muaban24 Online Trade and Training Company (MB24) on suspicion that it used the Internet to steal property.

One day earlier, police had summoned Pham Ba Quyet, director of the branch, and accountant Duong Thi Diep, for questioning, and searched their houses to collect documents deemed relevant to the case.

That same day, police in the Central Highlands province of Dak Lak also summoned the leaders of two local branches of MB24 and searched their headquarters.

Speaking to Thanh Nien, Nguyen Tuan Ha, chief of the provincial Market Management Division, said initial information is that the branches do not have licenses.

They are also believed to have evaded taxes, said Colonel Pham Minh Thang, office chief of Dak Lak's police department.

Earlier on Wednesday police in the northern province of Phu Tho arrested three leaders of the company's branch on suspicion of evading nearly VND3 billion ($143,250) in taxes.

On Thursday, four top officials of the company, including board chairman Ngo Van Huy, were taken into custody in Hanoi, on suspicion of committing fraud.

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A VnExpress Friday cited police's initial findings as saying that the company could have pocketed more than VND500 billion ($23.65 million) from their scheme.

The company's modus operandi was to offer shops in its online market for VND5.2 million ($248.43).

The shop gave its members a place to sell and buy goods from at cheap prices. Moreover, members could earn VND1.5 million ($70.9), if they could recruit a new member for the market.

When it was busted, MB24 had set up some 120,000 online shops for its members in more than 30 provinces and cities, Dan Tri reported.

However, just 5 percent of the shops were engaged in trade, while the rest were bought by people who wanted to earn commissions from member recruitment.

In fact, the company was said to mainly target people in distant areas and who were not well versed in computer skills or buying and selling goods online.

The case is being investigated further.

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