Vietnamese police have arrested three members and summoned two others in connection with an online fraud ring that has allegedly conned around US$10 million from 20,000 gullible investors by luring them into depositing the money for an unrealistic 3% daily interest.

Hoang Thi Bay, a member of the Colony ring

The arrestees are Hoang Thi Bay, Nguyen Van Dan and Vu Thi Thu Hang who claim to represent the ‘Colony Invest Group’ headquartered in New York.

Police said Hang, one of the ring leaders based in Ho Chi Minh City, has received VND25.5 billion (US$1.6 million) from new investors, of which she paid out VND2.57 billion (US$160,000) to old investors to lure more victims and kept the rest.

Using the same scheme, Bay, Dan and two others have allegedly received VND5.5 billion (US$343,000) and pocketed VND3.8 billion (US$237,000).

The two aforesaid - Le Thi Huong and Vi Thi Dao – were summoned yesterday. Police suspect they lead the ring in the northern Thai Nguyen province and that Dao has stolen over VND1 billion.

Meanwhile, Huong was originally an investor who had deposited EUR5,110 through www.colonyinvest.net which later yielded her EUR8,432.

But after finding she was unable to withdraw the initial deposit, she agreed to become a broker for the ring to earn a high commission of 10 to 15 percent on investments from her ‘clients’.

Over 1,700 people have fallen prey to Huong and her conspirators. They lost an estimated VND8.7 billion.

In related news, three suspects involved in the Colony in Bac Ninh province in the north, namely Nguyen Thi Vuong, Nguyen Thi Han and Nguyen Khac Hung had their residences searched by local police yesterday.

Police said at least 20 or even 30 others are involved in this ring.

Earlier, Nguyen Quang Sang in Ha Noi had been found to be the kingpin behind another similar scheme – the Callysinvest Organization.

Sang, who is being put under house arrest, confessed to having transferred US$140,000 to his conspirators including Nguyen Van Dan, who was indicted on Thursday and Dang Thanh Hai who crashed the website callysinvest.com and ran away with investors’ money.

Since August this year, Sang’s organization has stolen US$5 million from 5,000 victims.

According to Tran Van Hoa, director of the High-Tech Criminal Investigation Department, this type of fraud, known as Ponzi scheme, died out in most developed countries 30 years ago. In Viet Nam, it is running riot in Ha Noi, Ho Chi Minh City, Thai Nguyen, Bac Ninh and Hung Yen, he added.