A prominent property tycoon has been sentenced to death for her role in Vietnam’s biggest-ever fraud case.

Truong My Lan, the chair of the developer Van Thinh Phat, was found guilty of embezzlement, bribery and violations of banking rules on Thursday, in a case that has shocked the country. A total of $12.5bn (£10bn) was embezzled, the equivalent of almost 3% of Vietnamese gross domestic product, but prosecutors said on Thursday the total damages caused by the scam now amounted to $27bn.

“The defendant’s actions … eroded people’s trust in the leadership of the [Communist] party and state,” read the verdict at the trial in Ho Chi Minh City.

Lan was found guilty of swindling money from Saigon Commercial Bank (SCB) over a decade. She had been on tried alongside 85 others, including former central bankers and government officials, as well as previous SCB executives.

The trial is part of a national corruption crackdown led by the secretary general of the Communist party of Vietnam, Nguyễn Phú Trọng. The campaign, which is also known as “Blazing Furnace” and has increased in recent years, has led to the indictment of thousands of people, as well as the resignation of two presidents and two deputy prime ministers.

Lan, who was arrested in October 2022, had denied the charges. A relative told Reuters before the verdict that she would appeal. The death sentence is an unusually severe punishment for a corruption case.

State media reported last week that Lan told the court she had joined the banking industry without sufficient experience and blamed a “lack of understanding of legal matters”. She said she had “thought of death” in desperation, and asked the court for leniency for her husband, a Hong Kong businessman, and niece who were on trial as accomplices.

The verdicts announced on Thursday followed a five-week trial that has been covered in great detail in Vietnam’s tightly controlled state media.

Documents related to the trial, kept in 105 boxes, weighed 6 tonnes, according to VN Express, which reported the authorities had installed security cameras and fire safety equipment to protect the evidence ahead of the hearings. More than 1,000 properties belonging to Lan have been seized, and nearly 2,700 individuals were summoned for the trial, which included 200 lawyers.

Dr Nguyen Khac Giang, a visiting fellow at the Vietnam studies programme at the Iseas-Yusof Ishak Institute, said the case was unprecedented, and a milestone in Vietnam’s anti-corruption crackdown. It was, he said, “the biggest case against a private business, with the biggest number of defendants, the biggest number of evidence and of course, the biggest number of money involved”.

Although Lan did not directly hold executive power at SCB, she owned 91.5% of the bank’s shares through third parties and shell companies.

She was accused of setting up fake loan applications to withdraw money from the bank over a period of 11 years, from 2012 to 2022. The loans accounted for 93% of the total credit the bank has issued, according to state media.

To cover up the fraud, Lan and other SCB bankers were accused of giving state officials $5.2m, the largest bribe recorded in Vietnam. The money was handed over in Styrofoam boxes, Do Thi Nhan, a former chief banking inspector at the State Bank of Vietnam, said during the trial. Nhan said that after realising the boxes contained money, she refused the boxes but that Lan declined to take them back, state media reported.

Since 2021, thousands of people have been indicted for corruption in the country, in what analysts have described as the most comprehensive anti-corruption effort in the history of the Communist party of Vietnam.

Last month, the Vietnamese government announced the resignation of its second president in as many years, Vo Van Thuong, over alleged “violations and flaws” that had “negatively affected public perception, as well as the reputation of the party and the state”. He had been in power for just over a year after his predecessor, Nguyen Xuan Phuc, was forced out because of corruption scandals involving officials under his control.

Evaluating public sentiment in Vietnam, a one-party state, is challenging. However, social media comments suggested many were shocked by the scale of the scandal, said Giang. While some welcomed the state crackdown, others questions how corruption on such a huge scale could go unchecked for so long.

“[The case] might indirectly signal that the state hasn’t really been doing well in terms of managing the system in terms of the increasingly complex market economy and also the state is incapable of controlling their own public officials,” said Giang.

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