The People's Court of Dong Nai province began questioning 87 defendants on July 18th in the fraud and embezzlement case involving Loc Phuc Investment and Trading Joint Stock Company, based in Ho Chi Minh City, after three days of verifying identities and announcing the indictment.

Huynh Huu Tuong (the true owner of Loc Phuc Company) is accused of masterminding the scheme that defrauded 165 customers of 255 billion VND. The defendants include Loc Phuc's management, sales floor managers, sales staff, legal and accounting personnel, and the hired shills.

Mastermind Huynh Huu Tuong answers questions from his defense attorney on the morning of July 18th. Photo: Phuoc Tuan

Mastermind Huynh Huu Tuong answers questions from his defense attorney on the morning of July 18th. Photo: Phuoc Tuan

In 2020, Tuong established Van Phuc Real Estate Investment and Brokerage Limited Liability Company. From April 2022 to August 2023, he hired Nguyen Van An, 29, to establish Loc Phuc Company and Green Link Real Estate Limited Liability Company, both based in Ho Chi Minh City. Tuong financed and directly managed both companies.

Under Tuong’s direction, employees of Loc Phuc and Green Link Real fabricated information and printed maps of non-existent residential projects in An Phuoc commune (formerly Long Thanh district), Song Thao and An Vien (formerly Trang Bom district), and Hung Loc (formerly Thong Nhat district).

According to the indictment, the defendants took images and prices of attractive houses from social media, lowered the prices, and falsely advertised them as their own properties. Sales staff purchased personal data to make calls promoting the properties on their "trading floor." The company also hired shills to interact with potential buyers at company events.

Police raided Loc Phuc Company's "trading floor" in An Vien commune, Trang Bom district, catching hundreds of people in the act of enticing customers to buy fake projects on August 31st. Photo: Thai Ha

Police raided Loc Phuc Company's "trading floor" in An Vien commune, Trang Bom district, catching hundreds of people in the act of enticing customers to buy fake projects on August 31st. Photo: Thai Ha

The defendants took customers to tour these fake projects (not owned by the company) showcasing good infrastructure to encourage them to sign contracts and make deposits. Once a customer agreed, Loc Phuc Company demanded a deposit of 60-70% of the land's value (inflated far above market price).

After signing the deposit contract, if customers couldn't afford the full amount or refused to complete the transfer, they lost their deposit. If they paid in full, the company took them to a notary office in Long An commune, Long Thanh district (now Long Thanh commune) to sign a land-use right transfer contract for different, undisclosed plots. Upon inspection, customers discovered these plots were worth only one-third of the market price. When they realized they had been scammed and complained, the company's legal staff blamed them and denied any responsibility.

After uncovering Tuong and his accomplices' scheme, Dong Nai Province Police Director, Major General Nguyen Si Quang, ordered a takedown in August 2023. On the afternoon of August 31st, as Loc Phuc Company transported dozens of customers to the "trading floor" in An Vien commune, hundreds of investigators raided the location, catching Nguyen Van An and 122 employees in the act, along with 20 hired shills pretending to compete for the projects.

Sales floor manager Nguyen Thanh Tung refuted Tuong's testimony, claiming that all strategies were directed by the owner. Photo: Phuoc Tuan

Sales floor manager Nguyen Thanh Tung refuted Tuong's testimony, claiming that all strategies were directed by the owner. Photo: Phuoc Tuan

In court, Tuong admitted to buying plots of land with existing titles in Dong Nai (not projects) for over 80 billion VND and reselling them. To boost sales, he and his staff used shills to create a sense of high demand, playing on customer psychology. "I saw other real estate companies doing it, so I followed suit. I didn't know it was fraud," Tuong stated.

For this scheme, also known as "AC" sales, the accountants typically advanced each shill between 500 million and one billion VND. This money was returned to the company after a successful sale to a genuine customer.

According to the investigation, these shills were trained and given scripts. On the 52-seat bus to the land sites, they were assigned to sit among real customers, posing as buyers, building rapport, and enticing others to make transactions.

At the fake "projects" created by Loc Phuc Company, the shills stayed close to the customers. Dozens of employees surrounded customers, promoting the properties at vastly inflated prices, pressuring them to make deposits, and creating a sense of urgency that left victims with little choice.

The shills also pretended to pool money with customers for deposits to receive "fake discounts." When a customer agreed to a deposit (typically around 100 million VND), a shill would follow suit to encourage the purchase. After the deposit and receipt, the customer was taken in a seven-seat car with the shill, the sales manager, and a consultant back to Loc Phuc Company to pressure them into depositing an additional 60-70% of the transaction value. If a customer realized the inflated price and requested a refund, it was denied.

When questioned about the tactics, such as buying personal data to make calls using burner SIM cards, luring customers from Ho Chi Minh City to Dong Nai, and organizing events, Tuong claimed ignorance, stating, "I wasn't aware; the sales floor managers and department heads handled that."

"I only bought the land and set the selling price. I didn't know about the advertising or sales methods. The sales floor managers and staff handled that," Tuong testified, adding that a 230 million VND commission was paid to subordinates for each plot sold.

Tuong stated that he paid each employee a base salary of three million VND per month, plus 700,000 VND per week for advertising. The company had five to seven sales floors, each with a manager and sales staff. "All sales proceeds and employee payments were handled through accounting," Tuong said.

Called to testify, Nguyen Thanh Tung, 30, the Tan Binh sales floor manager, contradicted Tuong's testimony, asserting that all strategies were directed by Tuong, and they simply followed orders. Tung stated his base salary was 35 million VND, with a five million VND commission per plot sold.

During the morning questioning, the presiding judge and the People's Procuracy representative repeatedly reminded the defendants to be truthful, answer directly, and avoid being evasive if they wanted leniency.

The trial is scheduled to continue until August 15th.

Phuoc Tuan