Former Vietnamese pharmaceutical executive accused of paying millions in bribes to hospitals

Cach and the company's former deputy director, Le Van Tinh, face charges of fraud and bribery. 

Authorities have also charged 18 hospital leaders and staff members with accepting bribes. Than Duc Lai, former director of the Social Insurance Office in Bac Giang Province, was also charged in connection with the case.

According to the indictment, Son Lam Pharmaceutical, which focused on selling traditional herbal medicines, secured numerous supply contracts at traditional medicine hospitals and medical centers throughout Vietnam. 

Prosecutors allege that Cach paid bribes to decision-makers before, during, or after contract execution to ensure smooth operations.

At the Traditional Medicine Institute in Ho Chi Minh City, the company signed 10 contracts worth over VND230 billion ($8.8 million), between 2017 and 2023. 

Investigators said director of the institute Huynh Nguyen Loc demanded a 20 to 25 percent commission per invoice. Payments were allegedly made directly to Loc or through staff member Pham Van Chuan, either after the hospital paid Son Lam or when Loc needed money urgently.

Cach complied, according to investigators, with Loc receiving a total of VND47.1 billion ($1.8 million). That included one direct payment of VND500 million ($19,100), 34 bank account transfers worth VND26.8 billion ($1.02 million) through Chuan, and 12 cash payments totaling VND4.7 billion ($179,600), also handled by Chuan.

At the Traditional Medicine Hospital in Tay Ninh Province, southern Vietnam, from 2017 to 2020, Son Lam Pharmaceutical signed six contracts worth VND16.8 billion ($642,000). 

In return, deputy director of the hospital Dinh Thi Mong Thanh allegedly demanded a 20-percent personal commission. She also directed that 17 percent go to chief accountant Nguyen Thi Hieu, while another deputy director, Cao Huu Hang, requested between one and three percent.

Thanh received about VND2.3 billion ($88,013) across 15 payments. Hieu was paid VND2.6 billion ($99,494) in 16 transfers, while Hang received VND188 million ($7,196) in nine payments.

In Hung Yen Province, northern Vietnam, Son Lam executed six contracts worth VND21.4 billion ($819,000), with the Traditional Medicine Hospital between 2014 and 2019. 

Chief accountant Quach Thi Lich reportedly demanded a 10 to 15 percent commission on each invoice. Cach then instructed his daughter-in-law to transfer VND507 million ($19,403) to Lich in four bank transactions.

Also in Hung Yen, the company signed four contracts worth VND4.2 billion ($160,727) with Khoai Chau District Medical Center. Director Vu Thi Ngat allegedly requested a 12-percent commission, and investigators said she received VND476 million ($18,215) in nine bank transfers sent to a subordinate's account.

At Kim Dong District Medical Center, also in Hung Yen, Cach allegedly transferred VND287 million ($10,982) across six payments to Vu Duc Thang, head of the pharmacy unit.

In Thai Nguyen Province, also in the north, investigators allege that Cach directed 24 transfers totaling VND10 billion ($382,674) to Truong Thi Thu Huong, director of the province's Traditional Medicine Hospital. The bribes amounted to 10 to 30 percent of each contract's value, in line with what Huong allegedly demanded.

Authorities said Cach used the same method to pay off leaders and employees at other hospitals as well, securing contracts for the company through a widespread and systematic bribery scheme.