Giving away luxury goods and diamond rings to trick people into credit traps

The Criminal Police Department of Hanoi City Police has just arrested a group of people who were hiding under the guise of businesses to lend money at high interest rates on a large scale. They arrested 11 people and seized over 11 billion VND on the spot. It is worth mentioning that the people caught in the black credit trap of this line are mostly businesses.

More than 120 businesses borrowed and thousands of billions of dong in interest

The ringleader is Trieu Dinh Hoan, born in 1979, residing in Van Quan Urban Area, Ha Dong, Hanoi. Hoan has a previous conviction for "Violating regulations on road traffic control" (but was given a suspended sentence).

According to police documents, in 2010, as Chairman of the Board of Directors of Hai Linh Investment Joint Stock Company (Hai Linh Company), Hoan registered to do business in the fields of software publishing and computer programming, but in fact it was an organization disguised as a business to lend money at high interest rates.

Hoan's customers are mainly businesses or individuals who borrow for the purpose of paying off bank debts. Hoan's lending interest rates range from 2,000 VND/million VND/day to 5,000 VND/million VND/day.

Lieutenant Colonel Nguyen Van Binh, Head of the Criminal Police Department of Hanoi City Police, said that one of the differences between this black credit lending scheme and other cases is that the borrowers are mostly construction enterprises with assets, but at a certain point in time are facing financial difficulties.

According to initial verification documents, Hoan's company lent money in this manner to about 120 businesses and individuals, amounting to 1,600 billion VND, with interest income of several thousand billion VND.

The lending scenario set by this group is to pay attention to businesses with good income, then buy valuable gifts to show their concern. Another scenario is to lend black credit to businesses to buy land. Therefore, they are very close to the Bank, if the business agrees to borrow black credit to buy land, they commit to helping the business mortgage the land to borrow money from the Bank at a rate higher than the value of the land.

Specifically, if they lend a business 10 billion to buy land, they will help the business mortgage that land to borrow more than 10 billion from the bank. At this time, according to the calculation of the businesses, they often think that they have just paid back 10 billion in loan money and interest, there is still a surplus of about 1.2 billion to cover.

However, in reality, if a business borrows from a bank, it will take about 3-4 months for the bank to disburse the loan. During the waiting period, the business must pay interest on interest every day, and when it receives the loan from the bank, it is only enough to pay the high interest while the principal debt is still intact.

Buying diamond rings and designer bags creates trust

For Ms. Minh, after being scammed out of hundreds of billions of dong, she realized that she was an easy target for this group. Because her company has a long-standing reputation in the market and good liquidity.

Recalling the time she borrowed black credit to invest in land, Ms. Minh said: “When Hanh saw that I had potential, she invited me to go to Saigon to buy land. While I couldn’t sell it, Hanh told me to borrow from the bank to pay it back. While I couldn’t borrow from the bank, Hanh pretended to introduce me to borrow black credit. So from 10 billion with an interest rate of 5,000 VND/million VND/day, I couldn’t pay it back within 10 days, plus the principal and interest, after 6 months, the principal and interest were equal. Now the principal and interest have reached 50 billion VND. When I couldn’t pay the principal and interest, those people pressured me by going to the company to force me to transfer a percentage of shares and beat the people next to me, making me mentally confused.”

Ms. Minh added that to create initial trust, this black credit group was extremely friendly, buying her diamond rings and designer bags. They even tried to help the company out of difficulties by showing her where to buy land at a bargain price and then lending her money to buy that land.

Regarding this case, Lieutenant Colonel Nguyen Van Binh said that this is a very sophisticated and organized group. The subjects mobilized capital sources up to several thousand billion, and also lent businesses up to 1,600 billion. There were victims who borrowed 40 billion in principal in 2018, and have now paid interest of up to 100 billion. When this subject was arrested, the business still owed this subject 137 billion.

Lieutenant Colonel Binh also suggested that people should not participate in illegal credit activities. Because this activity has many consequences, when borrowing is very simple, but when unable to pay, the ringleaders now let the subjects with many criminal records, powerful people come to suppress. The State Bank has a more open policy to make it easier for people to access and borrow capital for business and production.