Dismantling a loan shark ring with 40 pawn shops in Nghe An

On the morning of November 10, Thai Hoa Town Police said that the Investigation Police Agency had just initiated a case and prosecuted Phan Hai Duong (born in 1993, residing in Hoa Hieu Ward, Thai Hoa Town); Tran Manh Hiep (born in 1995, Quang Tien Ward, Thai Hoa Town); Tran Xuan Hung (born in 1987, residing in Dong Hieu Commune, Thai Hoa Town) and Nguyen Viet Nghia (born in 1979, residing in Nghia Thuan Commune, Thai Hoa Town) to investigate the crime of "loan sharking".

The four prosecuted subjects include: Phan Hai Duong, Tran Manh Hiep, Tran Xuan Hung and Nguyen Viet Nghia. Photo: Vu Bac

The above 4 subjects were arrested by Thai Hoa Town Police on November 6, 2018 and accused of lending money to dozens of people at "exorbitant" interest rates, with monthly amounts up to 10 billion VND, illegally profiting 1 billion VND.

According to Thai Hoa Town Police, recently, the situation of unsecured loans or mortgages with assets at high interest rates in Nghe An province has become very complicated. In Thai Hoa Town, many financial companies and pawnshops have sprung up like mushrooms.

Through the work of grasping the situation, Thai Hoa town police determined that in the locality there are nearly 40 pawnshops and financial companies operating with many signs of violating the law, lending money at agreed interest rates many times higher than those prescribed by law.

Faced with the above situation, Thai Hoa Town Police established Project 108L to fight and eradicate groups hiding under the guise of financial companies and pawnshops lending at high interest rates, causing bad public opinion.

The mortgaged vehicles were seized by the police at financial companies and pawnshops in Thai Hoa town. Photo: Bac Vu

Major Pham Thanh Long - Deputy Chief of Thai Hoa Town Police said that collecting documents and evidence is difficult because most of the victims are afraid to provide information to the police for fear of retaliation. On the other hand, loan sharks are often notorious criminals in the area. When the debt is overdue, they often threaten and terrorize borrowers, making them panic, sell family assets or break the law to have money to pay interest.

After 6 months of establishing the project, the Project Board has gradually built a detailed plan, assigning each working group to solve the case. At exactly 10:30 a.m. on November 6, 2018, nearly 100 officers and soldiers of Thai Hoa Town Police simultaneously inspected 40 financial companies and pawnshops in Thai Hoa Town.

At the time of inspection, many companies and pawnshops could not present operating licenses as required and were engaged in usury activities contrary to the law.

The investigation team has temporarily detained 4 suspects including: Phan Hai Duong (born in 1993, residing in Hoa Hieu ward); Tran Manh Hiep (born in 1995, Quang Tien ward); Tran Xuan Hung (born in 1987, residing in Dong Hieu commune) and Nguyen Viet Nghia (born in 1979, residing in Nghia Thuan commune). At the same time, 20 related suspects were administratively handled.

Article 201,Penal Code 2015aboutCrime of usury:

“1. Any person who in a civil transaction lends money at an interest rategHatching 05 times the highest interest rate prescribed in the Civil Code, illegally profiting from30,000,000 VND to under 100,000,000 VNDor has been administratively sanctioned for this act or has been convicted of this crime, has not had his criminal record cleared, and still commits the violation, thenbe fined from 50,000,000 VND to 200,000,000 VND or be subject to non-custodial reform for up to 03 years.

2. Committing the crime of illegal profit from 100,000,000 VND or more, shall be punishedfine from 200,000,000 VND to 1,000,000,000 VND or imprisonment from 06 months to 03 years.

3. The offender may also be fined from VND 30,000,000 to VND 100,000,000, banned from holding positions, practicing a profession or doing certain jobs from 01 to 05 years.”

During the inspection, the police collected many documents and equipment related to the loan sharking activities of 24 subjects, confiscated more than 500 million VND in cash, 30 motorbikes, 14 cars, 20 mobile phones and 18 computers.

According to the Investigation Police Agency, for a long time, the above subjects have taken advantage of individuals' need for quick money, so they have lured them to borrow money with interest rates that they offered many times higher than the interest rates regulated by the State Bank. The monthly loan amount is up to more than 10 billion VND, the amount of illegal profit is more than 1 billion VND.

Mr. NVN, residing in Dien Chau district, is a victim in the case. He said: In July 2018, he pawned his car at Phan Hai Duong's pawn shop to borrow 80 million VND with an interest rate of 12 million VND/month. He had to pay 400,000 VND in interest per day. When the due date came but he could not pay the interest, the subjects texted him threateningly and mentally terrorizing him.

Leaders of the Provincial Police and the People's Committee of Thai Hoa town presented flowers and awards for the outstanding achievements of the Thai Hoa town police. Photo: Vu Bac

According to an investigator, many victims, due to economic difficulties, have the habit of being afraid to do loan procedures at credit institutions, so they often go to financial companies and pawnshops to "hot-borrow" a sum of money at a self-agreed interest rate. When the payment date comes, the interest rate is too high and they cannot pay on time, leading to interest on interest. Therefore, the black credit lenders seize their assets, collect debts, cause injuries, seriously affect security and order in the area, and cause bad public opinion among the people.

In recognition of the achievements in solving the 108L case, on November 8, 2018, the leaders of Nghe An Provincial Police and Thai Hoa Town People's Committee commended Thai Hoa Town Police and requested Thai Hoa Town Police to continue to consolidate documents and expand the investigation of the case to strictly handle the subjects according to the provisions of law.

Duc Vu - Xuan Bac