Egroup fraud probe: How victims’ properties ended up in Vietnamese tycoon Shark Thuy’s wife’s name before being mortgaged

So how did properties belonging to victims of the Egroup case end up under the names of people close to Shark Thuy, and eventually become collateral for bank loans?

That trail is among the key issues clarified by Vietnam’s police in its supplementary investigation into the case involving Egroup, Egame, Nhat Tran Company, and related entities.

The latest findings put the number of victims at more than 10,000 and the amount allegedly appropriated at VND8.459 trillion (US$320 million).

Against that backdrop, investigators also zeroed in on 33 properties linked to victims, parties involved in the case, and other related individuals, tracing how the assets changed hands, who ultimately held title to them, and how they were used as collateral.

Five were found to belong to Thuy and were unrelated to the victims.

The remaining 28, however, had been transferred or entrusted by victims and other parties to companies and individuals designated to receive them.

From victims’ properties to Egroup shares

The trail began with investors agreeing to hand over their real estate.

Seven victims told investigators they had agreed, at Egame’s request, to sign contracts transferring their properties to designated recipients.

Six later received strategic cooperation agreements involving Egroup shares. Another victim transferred two properties in exchange for bonds issued by Igarten Education Development JSC.

Between August 2016 and June 2021, five notaries handled the transfer or authorization of 28 properties belonging to 29 victims to three companies and seven individuals.

Investigators found that the properties’ legal status had been checked and the parties had provided the required documents and voluntarily signed the agreements. There was no evidence that they were deceived or coerced during the notarization process.

Investigators also found no evidence that the five notaries benefited from the transactions and therefore found no grounds to consider criminal liability against them.

The investigation then followed the properties into the banking system.

A total of 32 properties were used as collateral for those loans.

Investigators also identified another property used to secure a VND7-billion ($265,000) loan at a different bank.

6 properties ended up with Thuy’s wife, deputy CEO

Among those who received properties were Thuy’s wife, Le Thi Thanh Hien, and Egroup deputy CEO Nguyen Ngoc Khanh.

Investigators said Hien and Khanh acted on Thuy’s instructions when they signed contracts to receive six properties belonging to nine victims.

The properties did not simply remain under their names. They were subsequently mortgaged to a bank.

Investigators, however, found that Hien and Khanh did not know about or participate in Thuy’s alleged scheme to sell non-existent Egroup shares to investors.

Neither they nor other individuals who held title to victims’ properties were found to have benefited from the transactions.

Investigators therefore found no grounds to consider criminal liability against Hien, Khanh, or the other individuals over their roles in holding the assets.

$326 million allegedly appropriated from over 10,000 victims

The property trail forms part of a much larger alleged fraud scheme that investigators say left more than 10,000 victims.

Thuy has been identified by investigators as the alleged mastermind.

According to the supplementary investigation findings, the scheme dated back to 2014, when Thuy needed money to repay debts, cover personal expenses, and keep his businesses running.

Investigators allege that he and his associates devised a plan to raise money by selling non-existent Egroup shares.

Thuy allegedly instructed associates to inflate Egroup's charter capital from VND32 billion ($1.23 million) to VND962 billion ($37.1 million) and fabricate revenue figures.

Fictitious revenue accounted for about 70 percent of the company’s reported annual revenue, investigators said, creating the appearance of a profitable conglomerate and helping attract investors.

Egroup shares were then offered at VND38,000 ($1.46) each, with a promise that they would be repurchased a year later for VND42,000 ($1.62).

Initially, when the number of customers and the amount of money raised remained relatively small, payments due under maturing contracts were still made.

However, as English-language centers and preschools within the Egroup ecosystem gradually shut down and the number of new customers declined, incoming funds were no longer sufficient to meet payments on maturing contracts.

Investigators allege that Thuy then instructed 23 managers and team leaders overseeing 341 sales employees to use money raised from new customers to pay earlier investors.

Under the arrangement, 70 percent of newly raised funds went toward payments to existing investors managed by the respective sales employees, while the remaining 30 percent was transferred to the company.

Investigators said the money was not invested in education businesses or used for its stated fundraising purposes. Instead, the cash flow was tracked separately and excluded from tax filings and financial statements submitted to authorities.

By the time the case was uncovered, Egroup and Egame had become financially unable to repay investors.

The supplementary investigation identified more than 10,000 alleged victims, including nearly 9,000 still owed more than VND8.459 trillion ($320 million) in principal.

The Ministry of Public Security’s Investigation Police Agency has recommended that Thuy and 28 other defendants be prosecuted.