4 accused of alleged money laundering involving hidden gold

SINGAPORE – Four Singaporeans were charged on July 8 over their alleged involvement in a Value Added Tax (VAT) carousel fraud scheme involving gold smuggling.

They had allegedly operated Singapore-registered corporate entities which imported signal converters from two suppliers run by a criminal syndicate in China, said the police in a statement.

Court documents did not state how much gold was smuggled in, and what it was worth. They also did not say what kind of signal converters they were.

Seow Choon Pheng, 63, who was the director of Macropac System, was handed two charges for his alleged involvement in an arrangement to facilitate another person’s control of benefits from criminal conduct.

He was also charged with two counts of carrying on a business for a fraudulent purpose.

Seow Choon Lien, 62, who was the director of Megaspeed Services, was handed similar charges, two of each.

Chu Tung Wu, 60, was charged with one count of being involved in an arrangement to facilitate another person’s control of benefits from criminal conduct.

He was also charged with one count of carrying on a business for a fraudulent purpose, and one count of abetting another person’s failure to exercise reasonable diligence.

Court documents stated that Chu had allegedly proposed that Tan Kui Moi assume directorship of Seg Metallic Electronics Trading as a “sleeping” director, while Chu ran the business between May 2019 and May 2021.

Tan, 61, is accused of failing to exercise due diligence as the director of Seg Metallic Electronics Trading.

In their statement, the police said the criminal syndicate would arrange for the gold to be concealed in the signal converters, which were then declared as high-tech products and exported to Singapore at inflated prices.

The Chinese authorities would then be defrauded of substantial export VAT refunds.

When the signal converters arrived in Singapore, they would be dismantled, and the gold would be extracted and sold.

Parts of the signal converters would be sent back to China for reassembly into the next batch.

Said the police: “This facilitated the transfer of the fraudulently obtained VAT refunds to the Hong Kong-based mastermind through payments for these mainboards.

“This carousel-like arrangement allowed the criminal syndicate to perpetuate the scheme by creating a paper trail of sham transactions disguised as legitimate trades.”

The scheme was uncovered when the police’s Commercial Affairs Department (CAD) received a tip-off in November 2020.

CAD’s director Peggy Pao said: “Singapore, as an international hub for trade, transport and finance, remains vigilant against criminal syndicates who seek to operate fraudulent businesses or launder their illicit proceeds through Singapore.

“We greatly appreciate the close collaboration between CAD and our Chinese counterparts in this case, which enabled us to disrupt the syndicate’s sophisticated operations and prosecute the case.”

An offender convicted of money laundering can be jailed for up to 10 years, fined up to $500,000, or both.

For failing to exercise reasonable diligence, an offender can be fined up to $5,000, or jailed for up to a year.

For carrying on a business for a fraudulent purpose, an offender can be jailed for up to seven years, fined up to $15,000, or both.

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