The People's Procuracy of Hanoi City detailed the actions of Tinh and his nine accomplices in a recently issued indictment, prosecuting them for fraud and appropriation of property.

Hundreds of people invested in two virtual shares, BLI and CWE, which were advertised as highly profitable, promising gold, cars, and real estate as rewards. However, behind the glamorous seminars and promises lay a sophisticated scheme orchestrated by Vu Duc Tinh and his accomplices.

To fund personal expenses, from November 2021 to December 2022, Tinh directed the establishment of three legal entities: Bankland Group Joint Stock Company, Cawiho Company, and GBF Company. In reality, these three companies conducted no actual business operations; they functioned solely as a multi-level scheme, raising money from new investors to pay interest to earlier ones.

Although Tinh was not listed as a shareholder in any of the companies, he presented himself as a "senior advisor" and controlled all operations. Using these three legal entities, Tinh organized seminars and disseminated fraudulent information to entice investors to contribute capital and purchase shares not listed on the stock market, according to the indictment.

Two Bankland Group leaders, Quan Van Duong and Nguyen Thi Nhu. Photo: Bankland

Establishing a proprietary exchange and building investment trust

According to the indictment, Bankland company had been operating for just over one year, had not filed taxes, and had not received authorization from state regulatory agencies to issue shares. Nevertheless, on 1/6/2022, Quan Van Duong, whom Tinh appointed as Chairman of Bankland's Board of Directors, signed a notice establishing the Banklandexxchange electronic stock exchange on the website banklandexchange.info.

Bankland subsequently self-issued 10,000 billion shares under the code BLI, setting an initial valuation of 0,0001 USD per share. This created ten bond packages ranging from 100 USD to 10 million USD. Bankland allowed investors holding BLI shares to trade them among themselves and use these shares to register for real estate purchases on the company's exchange.

Concurrently, Bankland consistently launched "demand stimulation promotions" to attract investors to deposit money for share packages. Investors who deposited money were promised rewards and gifts, including cash, gold, real estate, automobiles, SH motorcycles, iPhones, and travel packages.

However, these were merely empty promises fabricated by Tinh and his accomplices. In essence, this was a "virtual currency" created by Bankland itself, possessing no liquidity value in the market.

VLS assessed that the share offering activity violated the provisions of the Securities Law 2019, specifically regarding the conditions for initial public offerings. According to regulations, an entity offering shares must have been profitable for two consecutive years immediately preceding the year of the offering registration and must not have accumulated losses up to the year of the offering registration.

Verification results from the State Securities Commission showed that Bankland company had not registered as a public company and had not registered to offer or issue securities. Documents from the Vietnam Securities Depository also indicated that the BLI share code was issued by Bao Long Insurance Joint Stock Company, not Bankland.

Many investors blindly trusted the group's non-existent share project and invested their money. From December 2021 to September 2022, Tinh and his accomplices appropriated nearly 16 billion dong from 535 victims.

During the investigation, police recorded statements from 83 of the 535 victims. They requested that Tinh return all the appropriated funds.

A grand opening ceremony that marked the beginning of the scam. Photo: Bankland

Self-issuing 3,000 billion virtual shares advertised as 'internal electronic shares'

At Cawiho Company, this enterprise had also been operating for less than one year and had not received authorization from state regulatory agencies to issue shares. Yet, on 1/7/2022, Tinh still instructed Ta Van Cuong, in his capacity as Chairman of the Board of Directors, to announce the establishment of the Cawiho internal electronic stock exchange on the website cawihoexchange.com.

Tinh then discussed and agreed with Cuong to self-issue Cawiho's internal shares with the code CWE. They subsequently issued 3,000 billion shares and self-valued them at an initial price of 0,0003 USD per share, with one USD equivalent to 24,000 dong.

Chairman Tinh also projected share growth from 0,003 USD per share to 5,6 USD per share. Investors could purchase shares directly, with initial buyers receiving preferential pricing.

According to the investigation agency, to attract more targets, Tinh and Cuong continuously launched "strategic shareholder cooperation" promotions to stimulate demand and induce investments. These promotions included gifts of internal electronic vouchers at preferential prices and in large quantities at the time of cooperation.

However, in essence, these were "virtual shares" created by Tinh and Cuong, possessing no liquidity value in the market. The Procuracy assessed that this share offering activity violated the Securities Law 2019, specifically regarding the conditions for offering and registering shares.

Why did so many people believe and invest?

At the investigation agency, victims stated that they learned about the investment opportunity through friends and invitations from Cawiho company via social media. The company introduced itself as operating in various sectors, including finance, real estate, and technology, with internal electronic shares and links to banks for foreign exchange and real estate business.

Upon investing in the company, they were promised high interest rates and the assurance that they could withdraw 100% of their invested capital. Investors were instructed to access the website Cawiho.com.vn to download the Cawiho application to their phones, setting up personal accounts and login passwords. The application would display the amount of money the investor had deposited. Those who paid cash at the company or transferred funds would receive a receipt.

Verification at the Vietnam Securities Depository and Clearing Corporation (VSDC) confirmed that no CWE share code existed. The electronic information platforms of the stock exchanges in Hanoi and TP HCM also did not list the CWE share code.

Using the aforementioned tactics, from November 2021 to August 2022, Tinh's group offered CWE shares, raising 32,7 billion dong from 13 investors. Subsequently, the group paid 15,9 billion dong in commissions, thus appropriating the remaining 16,7 billion dong from 13 victims.

Some defendants in the case. Photo: Police provided

Offering 'ghost' real estate projects

In addition to issuing shares, Tinh's group also faced accusations of fraud by offering non-existent real estate projects.

According to the indictment, to build trust, Bankland company frequently organized conferences and project launch events, attracting thousands of participants. It also opened four offices to welcome clients, accompanied by promises of free land, gold, and automobiles.

The company advertised ownership of numerous projects in prime locations, but in reality, it only held agricultural land that had not been rezoned and had not received investment licenses.

To further enhance credibility, Bankland organized a land plot sale event in Cam Co village, Hong Van commune (Hanoi), promoting it as "Hong Van commercial - tourism - service complex 'golden land'". They also sketched out a project for 29 land plots. Investors wishing to participate had to place a deposit of 50 million dong, submitting money in the form of "goodwill deposit slips".

Local verification revealed that this land was designated for perennial crops, had not undergone a change in land use purpose, and had not received project licensing.

Using these tactics, Tinh's group appropriated 2,3 billion dong from 20 people. They later refunded 560 million dong to 12 individuals, currently retaining 1,8 billion dong.

From August 2022, Bankland closed down, ceased operations, and evaded demands for money from investors. Through tactics of enticing investment, share purchases, and real estate project deposits, Tinh, via Bankland, appropriated 479 billion dong from 5,291 victims.

A Bankland event promoting real estate investment. Photo: Bankland

The money collected was used by Bankland for commissions, salaries, and other expenses, as well as for depositing and purchasing land in Phu Quoc and villas in Ha Long.

Tinh also had others sign contracts to purchase four apartments with Mat Troi Phu Quoc Company Limited, totaling over 24 billion dong. The investigation agency requested this company to cooperate in liquidating the contracts and transferring the money for case proceedings, but has not yet received a response.

Additionally, Tinh had his driver registered as the owner of two apartments in the Sun Harbor Plaza Ha Long project. One apartment has been liquidated, and Mat Troi 2 Real Estate Joint Stock Company must refund 8,6 billion dong. The investigation agency has requested the transfer of this amount, but it has not yet been completed.

The Procuracy accused Tinh and his accomplices of using three legal entities to raise over 572 billion dong from investors and then appropriating it. They have not yet compensated over 497 billion dong to 5,368 people.