SINGAPORE — On 15 August, the Singapore Police Force (SPF) conducted islandwide raids, including at residences such as Good Class Bungalows (GCB) and condominiums, that led to the arrest of 10 foreign nationals for their suspected involvement in offences of forgery and money laundering. It was one of the city state's largest anti-money laundering operations.
During the raids, about S$1 billion in assets were seized. This included 35 bank accounts with a total estimated balance of more than S$110 million and cash amounting to more than S$23 million. Prohibition of disposal orders was issued against 94 properties and 50 vehicles, with a total estimated value of more than S$815 million.
Additionally, more than 250 luxury bags and watches, more than 120 electronic devices such as computers and mobile phones, more than 270 pieces of jewellery, two gold bars, and 11 documents with information on virtual assets were also seized.
What is money laundering?
Money laundering is the process of concealing money obtained through illegal activities – such as drug trafficking, corruption and terrorist funding – by converting them into assets that make them appear to have come from legitimate sources. As money made from criminal activity is considered "dirty" money, criminals go through the process of "laundering" or "washing" the money in order to make them look clean.
Why is money laundering illegal?
Criminal money that appears as legitimate assets allows criminals to avoid detection by authorities and enables them to continuously fund and support their criminal activities. Furthermore, it can encourage more criminal activity as the potential for financial gain makes engaging in illegal activities more attractive.
Money laundering also makes it difficult for law enforcement agencies to follow the money trail back to its original criminal source. This can hinder investigations and may prevent authorities from successfully prosecuting criminals.
When criminal money is successfully laundered, it becomes integrated into a country's financial system disguised as legitimate economic activities. This can distort markets and undermine the integrity of financial institutions. It can also lead to inflating asset prices and contribute to the erosion of tax revenues, as illicit funds evade taxation.
Money laundering cases in Singapore
In July, former Senior Minister and ex-Monetary Authority of Singapore (MAS) chairman Tharman Shanmugaratnam revealed that in the last five years, MAS had penalised 17 financial institutions for breaching Singapore's laws against money laundering and terrorism financing. Among the 17 financial institutions penalised, one had its licence revoked, while 14 were fined. The remaining two were issued reprimands. The financial institutions that were fined included DBS Bank, OCBC Bank, Citibank Singapore and Swiss Life Singapore. These four firms were implicated in the Wirecard scandal and were fined S$3.8 million for failing to comply with the rules and not having adequate controls in place.
In the same month, six people were charged for allegedly taking part in money laundering activities involving banking-related phishing scams that used malware. Among them was a 16-year-old boy who was accused of giving his Internet banking login details linked to the accounts to unknown parties on four separate occasions. Another was a 42-year-old male who was arrested and charged with cheating. Police investigations revealed that he had allegedly deceived a bank into opening an account. He then handed over login information linked to his account to an unknown person who had offered him S$500 in return for "renting" his bank account for two weeks, according to SPF.
In June, SPF conducted a joint operation in Johor, Malaysia, with the Royal Malaysian Police to cripple a transnational scam syndicate. The syndicate comprised of three Singaporean members allegedly involved in the money laundering of scam proceeds obtained from Singaporean victims. The trio were allegedly responsible for laundering scam proceeds linked to more than 50 police reports of investment scams, job scams, e-commerce scams, and impersonation of government officials reported in Singapore. The losses amounted to more than S$2.9 million. They were believed to be acting as money mules for scammers by procuring bank accounts to launder and move the scam proceeds out of Singapore in order to avoid detection and confiscation by the authorities.
Last November, a 55-year-old company director was sentenced to 15 months in jail and fined S$5,000 for facilitating a money laundering scheme. According to SPF, the man had channelled more than US$200,000 (S$284,000) through two of his company's bank accounts after he was offered loans by an unidentified man and a way to "earn money without having to borrow from him". The criminal proceeds that the man had laundered originated from several scam victims who had made the transfers believing that they were purchasing investment shares.
Anti-money laundering law in Singapore
The main anti-money laundering law in Singapore is the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA). The law criminalises any dealing in property that represents, in whole or in part, and directly or indirectly, the benefits of drug dealing or criminal conduct.
Individuals convicted of money laundering are punishable under Section 54 of the CDSA with imprisonment for up to 10 years, a fine of up to S$500,000, or both.
Additionally, Singapore has the Payment Services Act (PSA), which is a framework that details regulatory expectations for payment service providers. MAS is the designated authority that oversees payment compliance and is also responsible for pursuing allegations involving money laundering within Singapore's financial institutions.
SPF's Commercial Affairs Department is the main law enforcement agency tasked with investigating allegations of money laundering. An investigation into money laundering cases may also involve the Corrupt Practices Investigation Bureau (CPIB) and the Central Narcotics Bureau (CNB).
The Suspicious Transaction Reporting Office (STRO) is Singapore's intelligence unit. The agency is responsible for monitoring and receiving suspicious transaction reports (STRs), cash movement reports (CMRs), and cash transaction reports (CTRs) to uncover any money laundering activities.