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Two Chinese loan sharks jailed for charging extortionate interest

15:20 | 19/08/2020

Two Chinese nationals Tu Long, 28, and Yuan Deng Hui, 27, were sentenced to 18 months in prison for running a loan racket charging yearly interest of 912.5 percent.

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two chinese loan sharks jailed for charging extortionate interest
Five members of a loan racket stand trial in HCMC, August 18, 2020 (Photo: VNE)

Three Vietnamese accomplices, including two men and one woman, were sentenced to one-year imprisonment.

According to the indictment, Jiang Miao and Niu Li Li, identified as ringleaders, were found to have hired Long and Hui to set up three companies, namely Beta, Vinfin, and Dai Phat in Binh Tan District, Ho Chi Minh City.

They created three mobile phone apps – vaytocdo, Moreloan, and VDonline, offering loans of over VND100 billion (around $4.26 million) at 2.5 percent interest per day, equivalent to 75 percent a month and 912.5 percent a year, more than 30 times higher than rates at local commercial banks.

These three loan apps are widely advertised on the Internet and Facebook, as well as via street leaflets which is fast and requires little papperwork.

The duo employed nearly 40 customer service staff who instructed borrowers on downloading the company's apps on their phones. Once the app users log their personal information in the downloaded apps, which includes ID card information and bank account numbers, the loan racket will get all the phone numbers of the borrower’s relatives, colleagues, and friends who could be intimidated later for debt collection.

two chinese loan sharks jailed for charging extortionate interest
(Photo: PLO)

Investigators said the ring had nearly 500 customers and had earned profits of over VND658 million ($28,300) after six months of operation.

Long and Hui ran the financial companies with a monthly salary of VND35 million each, while three Vietnamese accomplices were hired to work as an interpreter, accountant, and HR manager to assist the two Chinese operating the ring.

Police haven't caught Miao and Li yet since they were managing the ring via phone and the internet, as reported by VNE.

Investigators in Vietnam have said around 210 loan-shark rings are operated by more than 2,000 people across the country, targeting low-income workers in urgent need of money. The borrowers approach the loan sharks because they cannot afford the time and paperwork demanded by banks.
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Jasmine Le