The Mastermind Behind the Chinese Loan Shark Ring Absconds; 135 Accomplices Face Justice.

Chinese National Runs an Illegal Lending and Debt Collection Operation in Vietnam

On August 22nd, the Hanoi People’s Court opened a first-instance trial against 135 defendants involved in an illegal lending and debt collection scheme, utilizing nude photo manipulation as a means of extortion. The ringleader is a Chinese national.

The trial is expected to last ten days, with a three-judge panel, presided over by Judge Nguyen Thanh Nha.

The indictment states that the 135 defendants are charged with “Usury in civil transactions,” “Tax evasion,” and “Extortion of property.”

According to the prosecution, Li Zhao Qiang (born 1988, Chinese national) entered Vietnam in October 2017 and created apps such as “Cash Vn” and “Vaynhanhpro,” with servers based in Hong Kong. These apps offered loans to Vietnamese citizens, charging interest rates of 43,000 to 60,000 VND per 1 million VND per day (equivalent to an annual interest rate of 1,570% – 2,190%).

To facilitate his operations, Li Zhao Qiang hired Nguyen Quang Vu (born 1987, from Ba Dinh district, Hanoi) and several other individuals to establish, manage, and operate a number of companies.

Additionally, Li Zhao Qiang brought two fellow Chinese nationals, Zhang Min (born 1986) and Liu Dan Yang (born 1992), into Vietnam to recruit employees for various departments, including telesales, credit assessment, and debt collection.

The prosecution determined that Li Zhao Qiang and Nguyen Quang Vu established two “general” companies, Newstar Vietnam Technology Company Limited and Vietnam Star Service Trading Company Limited, to manage the entire operation.

These two “general” companies would manage the branch companies, pay salaries to employees, and handle the assessment of all loan applications.

Specifically, Vietnam Star Service Trading Company Limited was directly involved in money lending transactions through electronic payment intermediaries, mainly YooPay Vietnam Technology Company Limited. This company was not licensed to operate as a payment intermediary in Vietnam but was established by Li Zhao Qiang, who invested money and hired Chinese nationals to manage the technical programming of the electronic payment system, including the “pay-for” and “collect-for” solutions.

In Vietnam, Nguyen Quang Vu was in charge of managing several companies for Li, with subordinates heading separate departments, such as defendant Phan Duc Dien in the management department and defendant Tran Thi Hang in the credit assessment department.

A Three-Step Debt Collection Process

To run the operation, Li Zhao Qiang deposited money into the bank accounts of Vietnam Star Service Trading Company Limited to fund the loans offered through apps like “Cash VN” and “Vay nhanh Pro.” These funds were then managed by Vu.

Vu, in turn, handed over the funds to Tran Thi Hang, who oversaw 28 employees dedicated to “inviting customers to borrow.” Each new employee was provided with a fixed computer, installed with the X-Lite software to make free calls to customers, along with a detailed guide on how to handle various call scenarios.

If a customer agreed to borrow money, the employee would request them to download the app and register for an account, providing personal information and details such as their address. The credit assessment department would then verify and approve the loan.

To collect the debts, the defendants categorized the debts into three groups, each with its own method of collection.

For Group M1 (4-9 days overdue), the defendants would resort to verbal abuse, profanity, and threats. For Group M2 (10-17 days overdue), they would post the customers’ photos on their Facebook accounts or manipulate the images by superimposing them on nude bodies, coffins, sexual acts, or wanted posters. For Group M3 (18-25 days overdue), the defendants would post the manipulated images on social media, in the customers’ neighborhoods, and even visit their homes to threaten them.

According to the prosecution, from 2019 to 2022, this operation lent over 1,607 billion VND to 120,780 customers in Hanoi and other provinces across the country, charging usurious interest rates and earning illegal profits of more than 732 billion VND. Specifically, the “Vay nhanh pro” app generated profits of over 177 billion VND, the “Cash VN” app made over 547 billion VND, and the “Ovy” app earned more than 7.5 billion VND.

Li Zhao Qiang, the mastermind and ringleader of this operation, is currently at large. The investigating agency has issued a wanted notice, and he will be apprehended and prosecuted at a later date.