SINGAPORE: A brother and sister ran a business that sourced locally resident nominee directors for foreigners who want to incorporate companies in Singapore.
Taking advantage of remote account opening by some banks during the COVID-19 pandemic, they incorporated 109 such companies in 2020, with two Singaporeans installed as nominee directors.
Sixteen of these companies went on to receive US$14.6 million (S$18.9 million) from victims of an international business email impersonation scam, according to the police.
Lee Ay Ling, 33, and brother Lee Chia Yen, 30, were each sentenced to 10 months’ jail for abetting the two nominee directors to breach the Companies Act on Wednesday (Dec 17).
They were also banned from acting as company directors for five years.
They had each pleaded guilty to eight charges under the Companies Act, with another eight similar charges taken into consideration.
The police said this is the first conviction of a corporate service provider after the High Court set out a stiffer sentencing framework for offences involving “silent” directors, who do not exercise oversight of the companies incorporated under their name.
The two Singaporeans who acted as nominee directors were convicted and sentenced earlier.
They are Chng Kok Leng Bernard, who was jailed for six weeks, and Tay Chee Seng, who was jailed for four weeks. They were also banned from acting as directors for five years.
FINDING CLIENTS
Lee Ay Ling is a qualified accountant and was the main decision-maker for Interconnect, the siblings’ business. Lee Chia Yen, her younger brother, holds a degree in finance. He handled the marketing and sales and dealt with clients.
Interconnect was set up in 2018 as a corporate service provider offering services like incorporation.
It charged S$500 to S$1,000 for nominee director services, where it would provide a locally resident person to meet the legal requirement for at least one director of an incorporated company to ordinarily reside in Singapore.
Initially, Interconnect would insist that foreign clients come to Singapore for an in-person meeting to verify their identities and the purpose of setting up a company in Singapore.
“Both Ay Ling and Chia Yen knew that it was important to carry out these verifications to satisfy themselves, otherwise they would not incorporate the companies,” said Deputy Public Prosecutor Vincent Ong.
But in April 2020, Lee Ay Ling learnt about a new practice where some banks were willing to open local bank accounts for foreigners using video conferencing for verification instead of in-person meetings, due to pandemic restrictions.
