Scarce recompense for victims of real estate frauds
Scarce recompense for victims of real estate frauds
Frauds in real estate cause significant financial damages to investors but the chance for victims to collect what they have invested is very slim.
The recent arrest of National Assembly deputy Chau Thi Thu Nga, chairman of the real estate developer Housing Group, was predicted two years ago. At that point, all the contracts putting money into the real estate projects of Housing Group reached their deadlines at which Housing Group was legally obligated to payout its investors but Nga did not honour them.
Between 2008 and 2014, for two blocks in the B5 Cau Dien apartment project in Hanoi, Nga and accomplices signed 752 contracts with a cumulative worth of VND377.2 billion ($17.7 million). Now the money is nowhere to be found, because her house was determined by the police as collateral for a loan at Vietinbank and her car is rented, not bought.
The Housing Group case is one of many real estate frauds busted recently. In another case, Le Hong Bang, general director of the Vietnamese real estate exchange JSC, signed 578 contracts with 397 people, collecting VND347 billion ($16.3 million) in 2009. As of now, Bang has repaid VND63 billion ($2.9 million) to 82 people while the remaining money cannot be found anywhere.
Similarly, Tran Ung Thanh, general director of Hong Ha JSC, mobilised VND169 billion ($7.9 million) from 143 people, under the agreement that the money will be invested in an apartment project in Hanoi, but after Thanh was given a life sentence and court-ordered to pay back the money, he was unable to and victims were left without any form of compensation .
According to Vietnamese law, perpetrators of fraud have to return misappropriated properties to the victims. However, this part of the sentence has largely proven difficult to enforce.
