Following a probe by economic investigators at the Ministry of Public Security’s central police department, inspectors said that bank official Bui Thi Tam had cooperated with other unidentified officials to transform loans the vendors took out from VND15-100 million each to VND200-400 million, while also faking more loan applications using the vendors’ names and housing certificates.

The forged documents had the signatures of Hoa Binh Market managers.

Vu Long Duc Nghia, director of DongA Bank branch in District 5, had approved more than 770 loan documents using the names of more than 400 vendors from Hoa Binh Market to borrow VND154 billion ($8.63 million) as part of the program.

But police said that only 45 vendors had borrowed around VND6 billion.

Vendor Phan Thi Huyen said she had paid off her whole loan including interest. But when she tried to collect the house title she had mortgaged for the loan, she was told to sign a debt note of nearly VND400 million before receiving the title.

Quang, another vendor, said he just finished paying his VND150 million loan when the bank notified him that he still owed nearly VND1 billion.

Many vendors were labeled debtors by the bank when they hadn’t even taken out an initial loan.

Vendors Pham Xu Ha, Diec Tuyet Anh, Nguyen Thi Ngoc Mai and Le Quang Nam said they had never borrowed from the bank, although it said they owned debts of VND200-500 million each.

According to the vendors, Tam received their payments at the bank but never let them sign any papers confirming they had paid the loans.

She delayed returning house titles to the vendors when they finished clearing debts so she could use the titles again to get more money by faking new bank loans under their names, vendors said.

Some meat and grocery vendors were described in the loan documents as gold sellers so that Tam could get more money, investigators said.

Police reports also showed that the DongA Bank branch in District 5 had established a slush fund worth billions of dong by raising the interest on the vendors above the rate cap to 2-3 percent a month.

Tran Phuong Binh, general director of DongA Bank, told Tuoi Tre early this month that Tam had taken advantage of her job to steal money from the bank. Binh said Tam had then used the money to start a loan sharking operation.

Binh said the managers of Hoa Binh Market were also involved in the scam but Nguyen Ngoc Lam, head of the market management board, denied any involvement.

“I just confirmed that the vendors worked at the market. Other things pertaining to the lending are the bank’s business.”

The bank has retrieved more than VND100 billion pocketed by Tam from the scam and will continue to seek the rest, it said.

Lam said the District 5 DongA Bank had paid the market management board VND2 billion as an incentive in the 2006 credit program. “The bank volunteered to do that. We didn’t force them.”

Source: Tuoi Tre