High interest rate scam

According to initial conclusions from Hanoi Police, Sen Tai Thu signed about 100 contracts and illegally mobilized about 1,000 billion VND from people from 2018 to May 2023. Chairwoman of the Board of Directors of Sen Tai Thu Joint Stock Company Pham Thi Hoa (born in 1958) and her daughter were arrested for fraud and appropriation of property.

The mobilization is carried out under the name of buying and selling shares. Sen Tai Thu commits to offering high interest rates, about 12%/year.

Just like many previous fraud cases, it is unknown whether the assets of the people who gave money to Sen Tai Thu to buy shares can be recovered when this enterprise has a huge outstanding debt and is unable to pay.

Ms. Pham Thi Hoa is said to have used more than 1,000 billion VND mobilized "mainly for personal purposes".

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Sen Tai Thu is a famous health care facility.

According to a VTV report, Mr. Tran Tuan Anh, General Director of Sen Tai Thu Vietnam Group Joint Stock Company, admitted that Sen Tai Thu does not have the function of receiving money. Capital mobilization through this form of share transfer is off the books and has not been declared, and has not been protected by the State. 100% of the mobilized capital is not used for business but is transferred to the personal accounts of the management board for spending. The intention of the old management board was very clear from the beginning and followed the right path of borrowing from the later to pay the earlier.

According to Lao Dong, by early April 2023, despite losing the ability to pay old customers, Sen Tai Thu continued to raise capital from new people. Some people still paid money to buy shares with the expectation of receiving an interest rate of 12%/year as advertised.

Sen Tai Thu has been mobilizing money from later investors to pay earlier investors. The interest payable exceeds the profits the company has achieved. Sen Tai Thu's leaders said that in addition to the interest paid to investors, the company also has to pay a very large percentage of commission to the sales staff.

Previously, in November 2023, the Investigation Police Agency of Cau Giay District Police, Hanoi City prosecuted and temporarily detained Ms. Pham My Hanh (1980), Chairwoman of the Board of Directors of My Hanh Group Joint Stock Company, for the crime of Fraudulent appropriation of property. Accordingly, Ms. Hanh provided false information about the Ngoc Linh ginseng investment project in many localities, mobilizing more than 1,200 billion VND from many individuals and then appropriating it.

Same scenario

Like many other Ponzi scams (taking money from later investors to pay interest to earlier investors), Sen Tai Thu raised a large amount of money, probably due to the high profits and reputation of this business.

According to the police, the former chairman and his accomplices took advantage of the reputation of the Sen Tai Thu healthcare brand, inflated charter capital, and reported unrealistic revenue to illegally raise capital.

The victims of Sen Tai Thu were all scammed by the same scenario. Initially, investors who deposited money were paid back in full, both interest and principal. However, by early 2023, many people had not received either principal or interest.

The reason why capital mobilization was made easy was thanks to the Sen Tai Thu brand. For decades, Sen Tai Thu has been known as a provider of health care services using non-drug treatments, distilled from the application of traditional medicine, thanks to the reputation of Professor, Dr. Nguyen Tai Thu.

In the case of My Hanh Ngoc Linh Ginseng, My Hanh Group (MHG) has taken advantage of Vietnam's Ngoc Linh ginseng brand. MHG has promoted the Ngoc Linh ginseng brand and announced that the following year's revenue is 100% to 300% higher than the previous year.

Also according to MHG, after only a few years of operation, this group has expanded its network of stores and agents across the country, with revenue of thousands of billions of VND/year and created stable jobs and good income for hundreds of employees at the company.

In fact, Ms. My Hanh gave false information about the Ngoc Linh ginseng investment project. MHG did not grow Ngoc Linh ginseng in many localities as stated. The high profit level given was only to mobilize capital.

With outstanding communication and winning many titles such as “Outstanding Vietnamese Businesswoman of 2019” and “Golden Rose Cup”, Ms. Hanh has mobilized capital from many people with a total amount of more than 1,200 billion VND. Then, she used a part of the mobilized money to pay interest to investors.

In the market, there are many cases where leaders inflate the value of businesses and brands to raise capital from investors in one way or another and then appropriate it.

In the context of the difficult economy , many real estate businesses are struggling on the brink of bankruptcy due to bank debt, bond debt and very limited cash flow when the real estate market is sluggish. Many people are concerned that some businesses use tricks to beautify financial and business reports to raise capital and may "herd" individual investors who have money but have little information about the business or are attracted by the profit cake created by the masterminds.

Former Chairman of Sen Tai Thu arrested: The company used the title of Professor to change its legal representative many times . Ms. Pham Thi Hoa - former Chairman of the Board of Directors of Sen Tai Thu Group Joint Stock Company and her two daughters have just been urgently arrested. During their operations, Sen Tai Thu and Ms. Pham Thi Hoa have received many awards, certificates, and commendations.