In a criminal case involving a business, from time to time, the courts will need to decide on the civil liability of the criminal and other persons including those who are not aware of the crime relating to the case. For example, if A commits a fraud against B and uses the monies obtained from B to repay a debt between A and C who is not aware of A’s crime. In addition to deciding on whether A is guilty or not, the court will need to decide whether (1) requesting A to compensate B for the loss that B suffers or (2) requesting C to return the monies C receives from A to B (assuming that A is convicted). However, it appears that the court does not have a consistent approach. In this post, we discuss the approaches that the courts took in some significant criminal cases for the last decade.

Huyen Nhu Case – 2014

Huynh Thu Huyen Nhu was the head of a transaction office of Vietinbank (a large State-owned bank). Huyen Nhu has offered high interest rate (exceeding the interest rate cap provided by law) to various companies to convince them to deposit their monies with a branch of Vietinbank. After those companies made the deposit under instructions of Huyen Nhu, Huyen Nhu used fake documents and payment instruction to cause Vietinbank to transfer the deposit to Huyen Nhu’s designated accounts. Huyen Nhu used most of the amount obtained through her fraud to repay her debts to several individuals. The damages caused by Huyen Nhu is reported to be around VND 4000 billion (about US$ 200 million at such time), being largest bank fraud at the time.

In addition to convicting Huyen Nhu of the crime of committing fraud to appropriate properties (lừa đảo chiếm đoạt tài sản), the court also requested Huyen Nhu to compensate all the relevant companies for the losses that such companies suffer. The relevant companies took the view that they are not victim of Huyen Nhu’s fraudulent acts but Vietinbank is. Therefore, the relevant companies requested Vietinbank to repay them the deposits they made with Vietinbank. However, the court rejected such view and considered those companies to be victims of Huyen Nhu’s fraudulent acts. The court confiscated the amount of interests that Huyen Nhu paid her lenders but did not require these lenders to return the entire amount they received from Huyen Nhu.

Phan Sao Nam Case – 2018

Phan Sao Nam set up a large online gambling network in Vietnam. The gambling network used pre-paid mobile phone credit issued by mobile phone operators as a means of payment. Accordingly, to convert the pre-paid mobile phone credit used by the gambling system into cash, Phan Sao Nam and his associates set up several companies which sold such pre-paid mobile phone credit to other entities (F1 Counterparties) which will then sell back to the mobile phone operators in Vietnam (F2 Counterparties). The criminals in Phan Sao Nam case also purchased services from other providers such as internet providers or data center providers (F1 Counterparties). In Phan Sao Nam case, the court has decided to confiscate most of the amounts that each F1 Counterparty received from Phan Sao Nam’s affiliated entities as illegal profit (khoản lợi bất chính). The court has decided to confiscate parts of the amounts each F2 counterparty received from Phan Sao Nam’s affiliated entities as benefits which have no legal grounds (lợi không có căn cứ pháp luật).

Tan Hoang Minh Case - 2024

In Tan Hoang Minh Case, Do Anh Dung is the controlling shareholder of Tan Hoang Minh Company. Do Anh Dung used Tan Hoang Minh and several entities controlled by Do Anh Dung to issue and sell corporate bonds privately to numerous bondholders. The entities which issued bonds privately to the market were proved not to have the required conditions for issuing bonds to the market. Accordingly, Do Anh Dung was convicted of the crime of committing fraud to appropriate properties. Relating to this crime, Do Anh Dung was ordered to compensate for the bondholders who purchased bonds from Tan Hoang Minh and its related entities.

Van Thinh Phat Case – 2024

In Van Thinh Phat Case, Truong My Lan was the controlling shareholder of Van Thinh Phat Company and Saigon Joint Stock Commercial Bank (SCB). The court declared that Truong My Lan has illegally withdrawn about VND 670,000 billion from SCB. As such, Truong My Lan was convicted of the crime of embezzlement (tham ô) and was ordered to compensate SCB as the victim of her crime.

This post is written by Nguyen Quang Vu.

Vietnam Business Law