From the Nhat Nam case, experts warn of the trick of hiding behind "calling for investment" to commit fraud

On September 8, Hanoi City Police issued a decision to prosecute and detain Vu Thi Thuy (born in 1983), Chairwoman of the Board of Directors and General Director of Nhat Nam Real Estate Investment and Trading Joint Stock Company.

Police determined that Vu Thi Thuy had provided false advertising information about the projects, promising to pay interest rates of 34-46% to make people trust and deposit money into the company under the form of a business cooperation contract, then take money from later people to pay interest to earlier people. With this method, Vu Thi Thuy had defrauded and appropriated the assets of more than 10,000 individuals with a total amount of up to thousands of billions of VND.

Before this shocking incident, economic experts warned about the distortion of the trick of calling for investment, paying unbelievably high interest rates and then appropriating investors' assets.

Dr. Nguyen Minh Phong said that whether or not raising capital with high interest rates is a scam depends on how well the business keeps its promise. If they promise to pay high interest rates and can pay them, then there is no problem. But if they promise but cannot pay them and continue to raise capital, then there are signs of fraud.

For example, Nhat Nam Company promised to pay interest of 46%/year, even up to 70% or 80%/year, paid interest daily but only paid interest for half a month and then stopped completely; committed to buying back investors' shares but did not do so, while still admitting that they were no longer able to pay and continued to raise capital, that is fraud.

Mr. Phong also said that we need to be cautious with interest rates that are unusually high, surpassing the general context, because most of them will not be trustworthy.

“That is actually just a trick to attract more and more money from investors so that they can use the money of later investors to pay earlier investors and then appropriate it. Because in reality, even effective businesses cannot afford such sky-high interest rates to pay investors on time.”Mr. Phong analyzed.

Advised investors to be alert and not fall into the trap of fraudulent capital mobilization, Mr. Phong emphasized that before investing, it is necessary to carefully research where to invest money, and see their capacity and history.

“If it is just a promise without any guarantee, it is meaningless. In this day and age, investors should not rely solely on promises to trust. That is no different from a bank lending money without collateral. And the important thing is to understand that it is not easy to make money, because if it were that easy, why would those who call for investment capital need to mobilize capital from investors?”Mr. Phong said.

Meanwhile, Dr. Vo Tri Thanh said that investment capital mobilization fraud can be identified through the following signs:

Firstly, the benefits offered by the caller are too high and unusually attractive.

The second is the implementation of commitments in capital mobilization and capital contribution.

Third is the financial and economic real estate exodus.

Fourth is the similarities with situations, stories, and cases that have happened.

According to Mr. Thanh, most of the scams and deceptions of investors have taken place with different forms, methods, and tricks, but the essence is still the same, so investors need to be alert to identify them.

“If it involves assets and finances, you need to be extremely careful. If you are not alert, do not have knowledge, and do not have a way to find information about the object you want to invest in, it is easy to fall into a maze and lose all your assets.”Mr. Thanh said.

Economists also believe that most of the previous acts of fraud and appropriation of investors' money were often made to look good with false information, exaggerated to become attractive in the eyes of everyone.

For example, Vu Thi Thuy exaggerated that Nhat Nam Company has many real estates and investment projects. Or on the website of Song Da Nhat Nam Group (songdanhatnamgroup.vn) it is also introduced with compliments: "Song Da Nhat Nam Group is known as a multi-industry company with a focus on real estate and finance. In addition, Song Da Nhat Nam also owns a chain of service systems including: restaurants, hotels, spas, karaoke…

Currently, the company owns many real estates stretching from North to South, including: Ho Chi Minh City, Tay Ninh, Phu Quoc, Thanh Hoa, Ha Nam, Hanoi... These land funds are all located in prime locations, helping Song Da Nhat Nam implement many outstanding and more suitable business strategies, thereby achieving many memorable achievements.

The current head and operator of Song Da Nhat Nam Company is Chairwoman Vu Thi Thuy. In addition to a huge asset fund, Ms. Vu Thi Thuy also owns a large-scale multi-sector ecosystem. Holding the strength of financial potential, the female chairwoman is even more confident in the real estate market when playing the role of the leader of Song Da Nhat Nam Group.".

Previously, many warnings were issued that Nhat Nam Company had mobilized capital through "Business Cooperation Contracts" which posed many risks to investors. The most obvious manifestation was that after signing the contract and depositing money, investors would receive daily profits into their accounts. However, Nhat Nam Company did not use the company account but used personal accounts such as Vu Thi Thuy (Director) to transfer money. This was a "trick" to circumvent the law, evade taxes and partly revealed the "nature" of the risky game.

According to the authorities, the purpose of using the mobilized capital of Nhat Nam Company has many suspicious signs, possibly operating according to the "Ponzi" model (taking money from previous investors to pay later investors). At some point, Nhat Nam Company will no longer be able to pay investors, which will lead to disputes and lawsuits, potentially posing complex risks to economic security and public order.