Female head of informal lending group prosecuted for defrauding people and appropriating 10 billion VND.

According to the Investigation Police Department of Ky Anh District (Ha Tinh Province), in 2014, Hoang Thi Thao started small-scale trading at Voi Market (Ky Anh, Ha Tinh). From 2015, traders at Voi Market pooled their resources to form a rotating savings and credit association (ROSCA), and agreed that Thao would be the head of the association.

Initially, Thao organized rotating savings schemes with interest for participants. Each scheme had 10 participants, and each participant had to pay 100,000 VND per day. At the end of the month, when everyone had paid the agreed-upon amount, Thao would hold a lottery to determine who would receive their share of the scheme for that month.

From the second month onwards, those who purchased shares in the previous month will no longer receive interest, and similarly, the last person will no longer have to pay interest.

For the first two years or so, participants contributemutual aid associationBecause she bought a lot of money, Thao also earned extra income. However, from around 2017 onwards, the number of people participating in the monthly rotating savings scheme decreased, so Thao intentionally bought back the money from the participants and paid them the interest monthly. With the money she bought back, Thao invested in business and lent it to others to earn interest.

Because her business wasn't profitable, and Thao had to pay monthly interest to participants in the rotating savings scheme, plus a large principal amount when it was time to pay out the winnings, she resorted to a modified method of organizing the scheme. She collected money from later participants to pay off the principal and interest to earlier participants, instead of organizing the scheme in the traditional way.

Around 2019, Hoang Thi Thao became heavily in debt and resorted to deceptive tactics to encourage people to continue participating in her rotating savings scheme. She offered higher interest rates in other schemes to attract more participants. When the principal repayment deadline arrived, she would intentionally delay it or borrow the money back, accepting the high interest rate.

In late 2022, after mortgaging all her existing assets to borrow money from the bank to pay off her debts to the members of the informal lending group, Thao provided false information to borrow money from several people, including billions of dong from the group members.

To date, the Investigation Police Department of Ky Anh District has received 56 complaints from citizens accusing Hoang Thi Thao of embezzling more than 10 billion VND.

The case is still under investigation.