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The sideshow that matters
Thursday,  11/22/2018, 21:22 

The sideshow that matters

By Son Nguyen

All eyes are on the first-instance hearing taking place in the northern province of Phu Tho where two former police leaders are standing trial for allegedly facilitating and covering up a huge online gambling ring. Roughly VND10 trillion, or some US$430 million, was found to have flown through the ring as bets during more than two years between April 2015 – when the gambling portals were started – and May 2017 when the police scented the organized crime and later busted the ring. Behind the scenes, however, numerous legal loopholes have emerged that made it possible for the ring to go largely unchecked.

The two ring leaders, Nguyen Van Duong and Phan Sao Nam, pocketed over VND1.5 trillion each, and were charged with organizing the gambling ring and money laundering. Investigators have established that up to 43 million accounts were opened for gamblers. The two defendants could rest assured when running the large-scale ring backed by two senior police officials: Phan Van Vinh, then head of the General Police Department, and Nguyen Thanh Hoa, at the time serving as director of the Anti-High-tech Crime Department (C50) under the Ministry of Public Security.

As revealed at the ongoing trial, Nguyen Van Duong set up an entity named Hi-Tech Security Development and Investment Co., Ltd (CNC), which was recognized by the two former police leaders as a front company for C50. Duong then lured Phan Sao Nam, chairman of local online game firm VTC Online, as the key partner to set up the gambling portals. The two former police officials are found to have covered up the ring by making false reports to their superiors at the Ministry of Public Security and barring other investigative agencies from meddling in, of course for huge kickbacks that are claimed to amount to tens of billions of Vietnam dong for each.

Phu Tho Province’s People’s Procuracy this Wednesday proposed handing down jail terms on the two ring leaders and former police officials, each with between seven and 13 years behind bars. Harsh sentences are likely in the days ahead when the court wraps up, given the devastating impacts inflicted on the society as well as on the Ministry of Public Security.

Apart from thousands of news stories and articles scrutinizing developments at the court, the local media have also dug deep into the sideshow: loopholes in the legal corridor regarding money circulation that helped oil the ring. In this respect, other culprits should also be held responsible.

As much as 97% of the amount of money used as bets in the gambling ring came from top-up cards for mobile phones, according to data given by investigators at the hearing. Mobile carriers as well as banks have earned sizable profits from services related to such cards, but in this trial, such entities as well as their administering agencies are pretending themselves to be outsiders or onlookers.

The indictment given by the prosecutor at the court says three major mobile carriers Viettel, MobiFone and VinaPhone alongside banks have made illegal gains amounting to over VND1 trillion from the gambling ring, according to Tuoi Tre.

Specifically, VnEconomy says the three aforesaid mobile carriers obtained between 15.5% and 16.3% of the bets. “The gambling ring could not have reached such a large scale without intermediary settlement portals and top-up cards. The money from top-up cards accounted for up to 97% of the total bets,” the news site reports, quoting data from investigators.

To gamble on the ring, players must acquire virtual money from any game agent, using money from their accounts opened at a bank or using the value in top-up cards for payment. Players can convert the virtual money back to real money, says Tuoi Tre.

“It is mobile carriers and banks that have played a crucial role in converting virtual money into real one and vice versa,” says the paper.

As the trial proceeds, questions and answers show the key problem rests with the top-up card that has been used as a crucial means of settlement for not only this gambling ring, says the news site Vnexpress. “Top-up cards are created for use in telecom services, and are never meant as a settlement vehicle,… which in this case is not governed by the State Bank of Vietnam,” says the news site.

Lawyers have pinpointed the role of mobile carriers and banks in this case.

Lawyer Tran Hong Phuc, who defends some of the accused at the trial, says in Tuoi Tre that Decree 25 of the Government providing guidelines for the Telecommunications Law specifies that scratch or top-up cards are for use in the telecom sector only, specifically for phone and internet services. However, “in this gambling ring and many other illegal rings, virtual money is converted into real money and vice versa using such cards. How can mobile carriers be not held responsible?” he is quoted in the paper. Similarly, Phuc also ponders why banks were not aware that money transfers for the real-to-virtual money conversion are illegal.

Lawyer Truong Thanh Duc, meanwhile, bluntly says in the paper that banks in this case have lent a helping hand in money laundering.

“Online game agents by performing the settlement transactions have violated the Law on Credit Organizations, because they are not credit institutions; on the other hand, credit organizations have infringed on the Law against Money Laundering,” the lawyer says in Tuoi Tre. The paper cites a prosecution official in HCMC to assert that banks should be held responsible, or they can even be implicated as conspirators.

However, relevant State agencies have all denied their responsibilities over the top-up card being used in the wrong way. The blame game ensues.

The Ministry of Information and Communications says that the use of such cards as a settlement means falls within the jurisdiction of the State Bank of Vietnam and the Ministry of Industry and Trade, while the trade ministry says the issuance and use of the card are all under the Ministry of Information and Communications’ management. The State Bank of Vietnam, meanwhile, also keeps the issue of responsibility at arm’s length, saying in a correspondence sent to the court that it only oversees bank cards, according to the local media.

In a commentary, Vnexpress says as the gambling ring is brought to light, relevant agencies have failed to draw the line of their responsibilities and obligations in State management. The issue of top-up cards being tossed up among the ministries and agencies shows that the legal corridor has failed to pinpoint do’s and don’ts, as not a single regulation has been issued over the use of such cards as a settlement vehicle.
As the cause-célèbre trial in Phu Tho is to wrap up in the days to come, the sideshow is still there to follow up: as a matter of principle, the people and businesses can do whatever is not banned by the law, says the online newspaper Vnexpress.

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