A National Assembly legislator has been arrested in connection with an alleged real estate scam that cost home buyers morethan VND377bn (USD17 million).

Investigators allege Chau Thi Thu Nga, chair of Land and Housing Construction and Investment JSC (Housing Group), started two real estate projects -- CT5 and B5 in Hanoi -- in 2008, although no building permits have been issued.

Nga published designs and models of the buildings and apartments, with a completion date of 2015, attracting 752 buyers who paid more than VND377bn in deposits.

The purchase contracts allowed buyers to withdraw from the project after one year, and they would be refunded their deposit plus interest. But buyers who did attempt to withdraw have yet to see their money.

The Ministry of Public Security investigated the activities of the company.

On January 7, Nga was suspended from the National Assembly before being arrested and charged with fraud. Her offices and homes were searched.

 Chau Thi Thu Nga arrested

Police also arrested Nguyen Van Tuan, chairman of Hanoi Import-Export Investment Construction and Development Company (HAIC). HAIC and Housing Group, a partner in the B5 project. Tuan allegedly signed contracts with more than 200 buyers and used the money for purposes other than the project.

 B5 project is abandoned land

Chau Thi Thu Nga, born in 1965, is a member of the National Assembly-Vietnam's legislative body. She also holds membership of several organisations, including the Vietnam National Real Estate Association, and the managing unit of real estate trading floors in the northern region under the Ministry of Construction.

Police have expanded their investigation.