If for a $3b illegal act, the fine imposed was slightly under $30m, that’s around 1%.
What would
you think?
Context
The $3b
offence is the case of money laundering in Singapore (1). In summary a bunch of
people native from China but carrying exotic passports such as Vanuatu, St
Lucia, Cyprus, were accused and sentenced for laundering around $3b in
Singapore over a period of time.
To make
things more spicy, one of the money launderers was found to have wined and
dined with some politicians, even during covid restrictions, as invited by another
business tycoon. So the money launderers were definitely not hiding and
isolated in Singapore.
A bunch of
these individuals was tried and found guilty of various offences, served their
offences and left Singapore to various 3rd countries. Some assets
were seized from them. (2). For example, Mr SU Jianfeng was sentenced to 17
months in Singapore jails, and this includes punishment for hiring a personal
chef without valid work permit, forging documents submitted to banks such as
OCBC, Maybank (3)
A nice list
of people arrested and their sentences is (4):
The article
(4) makes 2 very interesting points
-
The
betting syndicate involved started operating as early as 2012
-
There
are people involved who escaped Singapore justice
Just for
fun, if you refer back to the list of individuals and sentences in (2), you
will note that the individuals, in some cases, forfeited less than 100% of
illegally obtained assets.
The length
of time this syndicate ran was confirmed by the straits times (2)
“Wang
Dehai - who was in the business for 10 years from 2012 - worked in customer
service for the remote gambling enterprise before becoming a promoter. He was
given a 3 per cent share in annual profits, with his total income in 2016 alone
amounting to more than S$15 million.”
Mr Wang was one of those who forfeited only 90% of his
assets.
Anyway, this blog is about the recent fine, so let’s stay on
topic.
So what is
the fine for?
The whole
point of laundering money is to make money seem legal by pushing it through the
legal financial system. As someone who worked in a bank before, bank employees
are drummed with compulsory anti-money-laundering ‘online classes’ that need to
be passed yearly.
But if
duplicitous actors are so smart to by-pass the oh-so-amazing
anti-money-laundering checks made by banks and financial institutions, then how
are these institutions made of correct their behaviour?
A tap on
the wrist
Well, the
MAS (Singapore’s Central Bank) has just published the fines imposed on various
banks involved in the saga. For $3b of money laundered, banks have to pay
slightly under 1pct, $30m. (5)
I really
wonder how bad at managing funds can banks be if they do not make at least 1%
of funds they get their hands on for any amount of time, let alone some cases
that ran into years.
So to me,
the less than 1% fine is not even a tap on the wrist, is just a gently wagging
finger and “don’t do this again”.
Conclusion
Do you think that 1% is good enough a deterrent for banks? I personally find
the amount really small compared to how much they should have benefited. Plus
the eagled-eyed among you would have noted that not all financial institutions
mentioned in detailed reports of actions of the individuals (2) are included in
the fines (5)
As an
individual, would say 10% of $49m (ignoring the lifestyle) plus however much
you should have squirrelled to other exotic bank accounts be enough to risk say
17 months in Singapore jails? Even $1m can go a very very long was say in
Vanuatu, a beautiful island with a GDP per head of under $4,000.
- https://en.wikipedia.org/wiki/2023_Singapore_money_laundering_case
- https://www.channelnewsasia.com/singapore/billion-dollar-money-laundering-case-recap-cna-explains-conclusion-4401811
- https://www.straitstimes.com/singapore/courts-crime/3b-money-laundering-case-su-jianfeng-sentenced-to-17-months-last-of-10-to-be-sent-to-jail
- https://www.asianracing.org/email/202408qb-the-invisible-empire-how-singapore-court-cases-unmasked-a-multi-billion-dollar-illegal-betting-syndicate#:~:text=The%20illegal%20betting%20links%20go%20back%20to,his%20cousin%20was%20among%20the%2010%20convicted.
- https://www.straitstimes.com/singapore/3b-money-laundering-case-9-financial-institutions-handed-27-45m-in-mas-penalties-over-breaches
