Financial Fraud 9789814398398, 981439839X

Table of contents :
Contents
Introduction
Ch1: The Man Who Brought Down A Bank
Ch2: The Taxman’s Revenge
Ch3: Charity Under Fire
Ch4: Cheats Get Caught
Ch5: Brewery Scandal
Ch6: Stealing on the Job
Ch7: Civil Servants Gone Wild
Ch8: Dead Man Walking
Ch9: Lawyer on the Loose
About Author

Citation preview

Financial Fraud

Financial Fraud

balvinder sandhu

© 2013 Marshall Cavendish International (Asia) Private Limited Published by Marshall Cavendish Editions An imprint of Marshall Cavendish International 1 New Industrial Road, Singapore 536196 All rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the copyright owner. Request for permission should be addressed to the Publisher, Marshall Cavendish International (Asia) Private Limited, 1 New Industrial Road, Singapore 536196. Tel: (65) 6213 9300, Fax: (65) 6285 4871. E-mail: [email protected]. Website: www.marshallcavendish.com/genref The publisher makes no representation or warranties with respect to the contents of this book, and specifically disclaims any implied warranties or merchantability or fitness for any particular purpose, and shall in no event be liable for any loss of profit or any other commercial damage, including but not limited to special, incidental, consequential, or other damages. Other Marshall Cavendish Offices: Marshall Cavendish Corporation. 99 White Plains Road, Tarrytown NY 10591-9001, USA • Marshall Cavendish International (Thailand) Co Ltd. 253 Asoke, 12th Flr, Sukhumvit 21 Road, Klongtoey Nua, Wattana, Bangkok 10110, Thailand • Marshall Cavendish (Malaysia) Sdn Bhd, Times Subang, Lot 46, Subang Hi-Tech Industrial Park, Batu Tiga, 40000 Shah Alam, Selangor Darul Ehsan, Malaysia Marshall Cavendish is a trademark of Times Publishing Limited National Library Board, Singapore Cataloguing-in-Publication Data Sandhu, Balvinder. Financial fraud / Balvinder Sandhu. – Singapore : Marshall Cavendish Editions, [2013] pages cm ISBN : 978-981-4398-39-8 (paperback) 1. White collar crimes – Singapore. 2. Fraud – Singapore. 3. Commercial crimes – Singapore. 4. Commercial criminals – Singapore. I. Title. HV6771.S55 364.168095957 — dc23

OCN840879271

Printed in Singapore by Fabulous Printers Pte Lrd Cover design by Benson Tan Cover photo courtesy of Svilen Milev, www.efffective.com

Contents Introduction 7 Chapter 1 The Man Who Brought Down A Bank 11 Chapter 2 The Taxman's Revenge 45 Chapter 3 Charity Under Fire 57 Chapter 4 Cheats Get Caught 71 Chapter 5 Brewery Scandal 83 Chapter 6 Stealing On The Job 107 Chapter 7 Civil Servants Gone Wild 115 Chapter 8 Dead Man Walking 133 Chapter 9 Lawyer On The Loose 151 About the Author

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Introduction

Introduction

White-collar crime is not without its casualties. While it usually does not involve death or physical harm, individuals or companies are nonetheless victimised, be it in terms of the loss of money or value of a product, or even that of the company itself. The list of financiallymotivated crimes include cheating, forgery, embezzlement and fraud. Some of the criminals mentioned in this book are famous—or should we say infamous—while others were involved in relatively low-key crimes. But this does not detract from the fact that they have committed crimes and have been made to pay for them. One of Singapore’s most famous cases was that of trader Nick Leeson, who was responsible for bringing down one of England’s oldest financial institutions. Then there was the case of David Rasif, the lawyer who absconded after taking millions of his clients’ money, and who is still on the run today. And who can forget the case involving the National

Introduction

Kidney Foundation (NKF), in which its CEO was accused of misappropriating the charity’s funds? Even senior finance managers often succumb to greed, betraying their employer’s trust to fund their lavish lifestyles or gambling habits, or on expensive gifts for their mistresses. Such cases include that of Chia Teck Leng from Asia-Pacific Breweries (APB), who pocketed over $100 million of the company’s money, as well as civil servants Koh Seah Wee and Lim Chai Meng, who worked at Singapore Land Authority (SLA) and effectively cheated the government organisation of more than $10 million. Financial Fraud also profiles other small-scale criminals who might not have benefited near as much financially, but committed severe crimes nonetheless. But as we find out, be they small-time crooks or seasoned swindlers, no one is above the law.

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The Man Who Brought Down A Bank

A Bank The Man Who Brought Down

Chapter 1:

If there ever was a financial crime in Singapore that garnered the most international interest, it was the case of Nick Leeson. The Englishman was responsible for bringing down Barings, one of Britain’s oldest and most prestigious merchant banks. As if that wasn’t shocking enough, he was also just a few days shy of turning 28 when it happened. Just how did a young and relatively inexperienced trader cause the downfall of a 223-year-old blue-chip bank, of which even Queen Elizabeth was a customer? The collapse happened in late February 1995 and was sparked off by Leeson initiating US$27 billion worth of reckless trades on Japanese futures contracts. Leeson was general manager of Barings Futures (Singapore) (BFS) and was seen as a whiz-kid trader because of the amount of money he was thought to be making the bank. Of course, a lot of this wasn’t actually true—Leeson was allegedly falsifying accounts and recording fictitious trades in order to hide his trading

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losses in Japanese stock futures. When this finally came to the bank’s notice, it had already lost £860 million.

Account 88888

Leeson joined Baring Securities London (BSL) in 1989 and was posted to Singapore in April 1992. In July, he opened Account 88888, a secret error account in Baring’s internal accounting system meant to record ‘small’ error trades. By December 1992, the account had accumulated losses of £2 million stemming from Leeson’s trading activities. In December 1993, Account 88888 hid cumulative losses of £23 million. Just a year later, the figure had ballooned to a whopping £208 million. On 17 January 1995, the Kobe earthquake shook Japan and its stock market suffered as a result. Leeson decided to try and recoup his losses by gambling heavily on a strong recovery in the Nikkei 225 futures share prices. He continued gambling as the market slid further, eventually accumulating a loss of £827 million. While on secondment to the group’s Singapore office, a senior settlements clerk from Barings London uncovered a US$190 million ‘hole’ in Leeson’s account on 23 February. But before he could get an answer from Leeson, the former general manager left the office, never to return again.

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The Blame Game Begins

On 26 February 1995, the Bank of England announced that Barings had been put under administration. In Singapore, the Commercial Affairs Department (CAD)—which probes white-collar offences—started its investigations by questioning key senior Barings employees such as regional managing director James Bax and director Simon Jones. Both surrendered their passports to the CAD. Bax was in charge of the group’s Asian operations outside of Japan and reportedly told the CAD that he had no control over Leeson’s trading activities as the trader answered directly to London. Although there were rumours that Barings PLC had sent a team to Singapore to check the books just a week before the crisis erupted, the bank denied these allegations and claimed to have no idea of the losses suffered by its Singapore offices. British newspapers reported that investigators had evidence that Barings’ treasury department in London had advanced as much as US$70 million to Leeson. Another report said that Leeson had obtained an extra US$130 million in February alone. However, a Barings spokesman dismissed these reports as being “purely fictitious”. A source told The Straits Times in early March that Barings had conducted investigations even before Leeson fled town on 23 February.

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“Obviously, Barings knew beforehand something had gone wrong and flew three officials down to go through the books before the whole case blew up,” said the source. “The officials left in haste... just before the authorities moved in and placed Baring Futures under judicial management.” Both the Singapore and British authorities conducted investigations on alleged fraud and falsification of accounts. Judicial managers from Price Waterhouse went through the books and said that they were getting assistance from Leeson, who was arrested in Frankfurt, Germany, on 2 March. When Leeson went missing and the world was talking about him and how he brought down a British institution, it turns out that he and his wife Lisa were catching some sun by a hotel pool in Kota Kinabalu. The couple had checked in to the Tanjong Aru Beach Resort in the East Malaysian state of Sabah and checked out on 28 February. They departed for Bandar Seri Begawan (Brunei’s capital city) the next day, and spent the day at the airport’s transit lounge before flying on two economy class tickets to Frankfurt, Germany that evening. As more details emerged about the case, it seemed that both the bank and the Singapore authorities were aware that something wasn’t quite right with the operations that Leeson was handling. An internal audit that Barings

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PLC had done in August 1994 highlighted the problems that eventually led to the bank’s downfall. Although top Barings executives in London were aware that the Singapore futures arm was exposed to “significant risks” because Leeson had too much control over both dealing and settlement operations, they chose to keep him as general manager because of his experience and the profits he had generated for the bank. BFS had raked in profits of $20 million in 1994. And despite the report’s recommendations that Leeson should not retain responsibility for supervision, chequesigning and other back-office functions, these suggestions were ignored.

No Controls Over Leeson

In January 1995, the Singapore International Monetary Exchange (SIMEX)—now known as the Singapore Exchange (SGX)—had also warned Barings about the huge volume of trade built up by its Singapore futures arm. The top management of Barings PLC assured SIMEX that the bank had enough assets to back its trades. This assurance was given by Barings group treasurer Anthony Hawes, who had flown to Singapore in January after a series of exchanges between SIMEX and the bank of London. Because margin calls were met, SIMEX saw

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no need at the time to suspend BFS from trading. But the chairman of SIMEX, Elizabeth Sam, noted that BFS only had four clients—three were part of the Barings group and the other was Banque Nationale de Paris. “The failure of internal controls within the Barings group has allowed the general manager of BFS to commit the Barings group to substantial positions which now account for the loss sustained by the Barings group,” she said. The findings also revealed that Leeson had directed his staff to modify the relevant records, and that “Leeson was able to do this as he was the key manager appointed by Barings UK to take charge of the dealing and trade settlement functions.” As such, he was “placed in a position where he could both initiate transactions and also ensure that transactions were settled and recorded in accordance with his own instructions”. This lack of control over Leeson’s dealings seems to have contributed significantly to the bank’s downfall. The issue actually been brought up before—in a letter dated 25 March 1992, Bax had alerted London of the danger placed on its Singapore arm, even before Leeson was made general manager of BFS. This letter was directed to Andrew Fraser, head of equities, and it said: “My concern is that once again we are

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in danger of setting up a structure which will subsequently prove disastrous and with which we will succeed in losing either a lot of money, or client goodwill, or both.” “In my view, it is critical we should keep clear reporting lines, and if this office is involved in SIMEX, then Nick (Leeson) should report to Simon (Jones, a Barings director) and then be ultimately responsible for the operations side.” “If this is not the case, then the involvement of both Simon and myself (as current director of BFS) is inappropriate and needs review.”

As investigations into Barings continued, a host of discrepancies and non-professional behaviour soon came to light. It was first revealed that documents detailing the million-dollar deals in the last eight weeks of Leeson’s trades were missing from BFS and believed to have been shredded. Thankfully, SIMEX had a complete set of records of Leeson’s transactions. Addressing rumours that Barings records were shredded on a daily basis, Charles Sng, the SIMEX spokesman, noted that firms were “required under the Futures Trading Act to keep records for at least six years”. A few days later, it was revealed that Barings had suppressed information that Leeson was caught lying to

Chapter 1: The Man Who Brought Down A Bank

British regulators when applying for a London trading licence in March 1992. Had regulators in Singapore been informed, they would have demanded more information before deciding whether he would be allowed to work here as a futures trader. Christopher Sharples, chairman of London’s Securities and Futures Authority (SFA), was quoted by BBC as saying that Leeson had lied on his application form and that Barings had been informed. In the form, Leeson was asked whether he had been the subject of any criminal proceedings or had any county court judgements against him. He answered no, even though he had two outstanding judgements amounting to about £3,000. When Barings was informed, they withdrew Leeson’s name as they knew that he would not have been granted a licence in Britain. As he didn’t require a trading licence from SIMEX at the time, he started working in BFS.

Did He Act Alone?

Contradictory reports from different sources soon emerged as to whether Leeson acted alone or if he had help from people in London. In Singapore, the CAD conducted a probe into Leeson’s possible fraud and to show that he forged two

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documents to cover losses of 7.8 billion yen that he sustained in derivatives trading. If they could prove this, they had a case for extraditing him from Germany to face fraud charges in Singapore, where the maximum sentence for forgery was seven years in prison. (Following his arrest, Leeson had told a German court that he didn’t want to be extradited to Singapore.) London’s Serious Fraud Office (SFO) backed the CAD and its request for extradition. Another separate investigation was also taking place locally, led by two inspectors from Price WaterHouse who probed allegations of fraud and misconduct by those linked to the Barings scandal. These inspectors were appointed by then Finance Minister Richard Hu in early March, and had wide-ranging authority to question officials as well as to seize documents both in Singapore and overseas.

In April, the Bank of England (BOE) admitted for the first time that they did not know about all the cash transfers taking place within Barings, which amounted to more than double the bank’s total shareholders’ capital when it eventually collapsed. BOE governor Eddie George said that Barings PLC had broken the law by transferring large sums of money to its Singapore operations without first

Chapter 1: The Man Who Brought Down A Bank

informing the British central bank. Banks are required to inform the BOE in advance if they are transferring money totalling more than 25 per cent of their capital. “It is a criminal offence to advance the money without notifying us,” said George. “I can be absolutely certain to tell you that we did not know as of February 27 that £443 million plus £317 million were advanced to the bank,” he told the parliamentary committee cross-examining him during the investigation. In its last audited annual report, Barings’ total shareholders’ funds stood at £308.8 million.

The Official Investigation Report

The Price WaterHouse inspectors appointed by the Finance Minister released their report to him in September and the findings were made public a month later. It singled out Peter Norris, Barings’ chief executive at the time, as the individual to blame for the bank’s collapse. The 183-page report noted that the crisis could have been averted if Norris and other executives, including Bax, did not hinder investigations into a $115 million discrepancy in BFS’ accounts. The report concluded that the bank’s collapse was caused by “institutional incompetence and a total failure of internal controls”. Norris was named as “the man at the centre of an

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effort” to downplay the significance of an unauthorised transaction by Leeson that led to a hole worth $115 million in the bank’s accounts. Although Norris was told about this discrepancy, he discouraged all independent probes, made sure that other directors were kept in the dark and withheld any action against Leeson. He had also told Bax to help to downplay the issue. Bax purportedly then told Leeson to deceive the auditors. When group treasurer Anthony Hawes came to Singapore in February to investigate this discrepancy, Bax instructed BFS financial director Simon Jones to “get Nick (Leeson) out of this loop” and “take on” Hawes. Even though both Bax and Jones had earlier denied being involved in any cover-up, the inspectors wrote that “we are unable to accept their denials”, noting that key individuals were “grossly negligent, or wilfully blind and reckless to the truth” because they kept on sending money to BFS even though there were signs that all was not well in the Singapore operations. The report added that “had Mr Norris and Mr Bax not taken such steps and as a result of proper investigations, the flow of funds to BFS been curtailed, this may have averted the collapse of the Barings group… Instead, in the three weeks leading to February 24, Barings group companies remitted about $1 billion to BFS.” Another point it noted was that regardless of whether the

Chapter 1: The Man Who Brought Down A Bank

management knew about Account 88888 and what Leeson was up to, they could still have taken steps to investigate. “For three years, Account 88888 purportedly escaped the notice of the entire Barings group management. Yet within hours after... Leeson had fled, Baring Securities London personnel working in London and Singapore with incomplete documentation uncovered Account 88888 and identified it as the immediate cause of the collapse.” The report received international press coverage, the majority of it favourable.

Extradition From Germany

Following his arrest in Frankfurt on 2 March, Leeson was detained, pending an application for extradition to Singapore. As is the practice in extradition cases, German prosecutors argued Singapore’s case against Leeson, with CAD officers helping in the legal arguments. In late March, German prosecutors asked for a report on Singapore’s legal system and prison conditions in case Leeson’s lawyers asked for him not to be extradited on the grounds of human rights. “Mr Leeson’s lawyer has announced that he will make objections that prison conditions do not fulfil international standards, and that Mr Leeson fears unfair trial against him in Singapore,” said senior Frankfurt

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prosecutor Hans-Hermann Eckert. Leeson’s lawyer, Eberhard Kempf, did not bring up these objections in court but had raised them privately with Eckert. “The report will be precautionary, in case Mr Leeson’s lawyers raise such objection,” Eckert told The Straits Times. Since Leeson’s case came to light, British tabloids had been generating reports about the adverse conditions of prisons in Singapore. Terms such as “harsh justice” and “worsening human rights record” were used liberally. But Eckert wasn’t bothered by this coverage: “I think that prison conditions in Singapore are agreeable and normal, and that Mr Leeson can live in your prisons.” There were also rumours that the UK Serious Fraud Office (SFO) would seek to extradite Leeson to the UK instead, to face charges there. However, in May 1995, the SFO said that it wouldn’t be contesting any moves by the Singapore authorities to extradite him. It had been unable to find sufficient evidence of the involvement of any London-based Barings employee in the alleged fraud, which was the only grounds for extradition to England. The following month, the Hesse State Superior Court in Germany accepted all charges levied against Leeson in Singapore’s extradition request. The court had initially only accepted evidence supporting a single forgery charge while it waited for the other charges to be translated to German. But on 7 June, it ruled that the remaining 11

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charges were crimes under German law, which is the main criterion for extradition. The 12 charges consisted of four charges of forgery, two charges of defrauding Barings Futures and six charges of cheating SIMEX. Senior prosecutor Eckert said that “one or two charges of forgery may break down” and may be dropped, but he was confident of Leeson being extradited to Singapore. “But the other charges are just too strong. All in all, I don’t see any chance of him fighting extradition at this stage.”

On 4 October, Frankfurt’s High Criminal Court ruled that extradition to Singapore was allowed on 11 of the 12 charges against Leeson. Only one charge of forgery was dropped. Ironically, this was the original charge of forgery used to keep him behind bars when he was first detained, which was deemed not punishable under German law. Leeson’s case was then handed over to the Federal Ministry of Justice in Bonn for the diplomatic stages of the proceedings. The decision would be made in four to six weeks. Leeson’s lawyer, Kempf, said after the ruling that he would file an appeal in Germany’s Constitutional Court against the decision, but this never happened. On 7 October, it was reported that Leeson had appointed a legal firm in Singapore to advise him. John

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Koh of John Koh & Co confirmed that he had been “asked to advise Nick Leeson on Singapore law”, but declined to give any further comment. By the end of October, it seemed that Leeson had resigned himself to the fact that he would be tried in Singapore. He released a statement on 29 October: “After consulting my legal advisers, I am satisfied that I will be fairly tried and judged in Singapore. I wish to apologise to all Singaporeans for having doubted that I could receive a fair trial.” “I have decided to return voluntarily to Singapore and I will therefore not be pursuing my appeal against the extradition order in Germany.” Eckert later revealed that Leeson dropped his right of appeal against extradition for two reasons: he was convinced he had “no chance” of success and his lawyer was talking to the CAD about the charges.

Leeson Returns To Singapore

The infamous trader eventually returned to Singapore on 23 November, 272 days after he fled the country. On flight SQ325 from Frankfurt, he reportedly sat in a window seat at the rear of the aircraft’s upper deck in business class. Although he wasn’t handcuffed, he had a Singapore security official next to him and two more

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seated behind him. His wife Lisa sat eight rows behind her husband with his British lawyer, Stephen Pollard. The flight touched down at 4.13pm. More than 100 members of the media—some from countries such as Germany, Britain and Hong Kong—showed up at the airport to witness his return. The fraudster looked unfazed as he walked out in a green Adidas sweatshirt, grey trackpants and navy blue baseball cap worn backwards. He didn’t say a word as he emerged in front of the media but managed a smile when an onlooker yelled, “Keep your chin up, mate!” His lawyer, Koh, told The Straits Times that his client was “positive about coming back” and was “eager to resolve all the outstanding issues”. “There are a lot of things going through his mind, but he’s not worried that he’ll be made a scapegoat and he’s comfortable that he’ll be treated fairly,” said Koh. Leeson was escorted into a waiting police car and taken to the Criminal Investigation Department, where he was fingerprinted and photographed. He was then brought to the CAD headquarters where he was questioned and gave a statement. Mrs Leeson came out of the arrival hall five minutes after her husband was driven away and took a taxi to the city with Pollard.

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Leeson Charged

Leeson was finally formally charged in court on 24 November 1995 with 11 counts of forgery and fraud. No plea was taken as CAD director Lawrence Ang asked the court for more time to question him and the case was adjourned for a week. Leeson was held at the top-security Tanah Merah prison until the case was mentioned again. On the day of the trial, Leeson arrived at the Subordinate Court just before 8am and appeared before District Judge Tan Siong Thye about an hour later, dressed smartly in a white shirt with cufflinks, red patterned tie and navy trousers. Leeson pleaded guilty to only two out of the 11 charges. He was convicted on two counts of cheating, with the nine other charges taken into consideration for sentencing. The first charge of cheating Coopers & Lybrand was a ‘simple’ one “designed to throw off auditors”. Leeson pleaded for leniency as there were no losses suffered by anyone. The second charge was for cheating SIMEX, which was presented as a “desperate attempt by a judgement-impaired young man in panic trying to eliminate the ballooning losses”. In his hour-long plea, Koh pointed out that Leeson was just a reckless trader and wasn’t out to profit from the cheating. “What he did was a cover-up of losses, not a cover-up of crimes.”

Chapter 1: The Man Who Brought Down A Bank

“He was not taking personal positions against the company or against a client to make money. What do the facts show? Recklessness. Our client is not a crook. If he was, he could have enriched himself.” And because Leeson had been served with a Writ of Summons in England, which strips him of any gain he might have made, it was unlikely that he would profit from his notoriety. “There is no Hollywood movie with Hugh Grant,” said Koh, which drew some chuckles from the packed court. Koh revealed that Leeson had been assisting the CAD in its investigations and that Leeson would pay the prosecution’s legal costs of $150,000. Leeson’s lawyers— Koh and Pollard—were tight-lipped on whether a ‘deal’ had been struck, although Koh referred to a plea bargain in his closing statement. Koh said that his client was willing to take responsibility for his actions and his remorse was shown in his plea, his voluntary return to Singapore and his cooperation with the CAD in their investigations. Leeson also did not run away at the height of Barings’ losses as he had “genuinely believed” until December 1994 that he could recover them. Around the same time, he was also coping with the trauma associated with his wife’s miscarriage. “He ran away from the situation, not from the law. He left because he could not cope with the pressure.”

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Leeson was the only person charged with crimes involving Barings’ collapse. On 1 December, Koh mentioned again in court that Bax and Jones, Leeson’s immediate bosses in Singapore, as well as senior executives in London, knew of the discrepancies that led to the auditors being deceived. “At one point our client was encouraged to mislead the auditors in certain respects... the bosses knew something was amiss but took no action,” said Koh. Deputy Public Prosecutor Lawrence Ang did not seek a deterrent sentence and said in his closing statement that he was “leaving the question of sentencing to the court”. Leeson’s wife, Lisa, was not in court and was said to have left the country for England a few days before.

Leeson Sentenced

The rogue trader returned to court to await his sentence the next day. In his remarks, Senior District Judge Richard Magnus said that Leeson had “spun a web of deceit” to cheat both Coopers & Lybrand and SIMEX. He added that Leeson had used his position of trust as general manager of BFS “to trade his honesty and his integrity”. “When faced with financial difficulties consequent upon his speculative activities in the 88888 account

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which led to a deficit of 7.778 billion yen in the accounts’ equity balance, he tried to trade himself out of them.” “There was manoeuvring of the transactions or purported transactions in question into and out of relevant accounts intended to give the auditors and SIMEX a superficial reality. It was deliberately designed to beguile them.” In his 18-minute judgement, the judge also noted that Leeson had “placed the integrity of SIMEX at risk” as the stock exchange would have suspended the trading activities of BFS or liquidated the positions it held if it had known the facts. He also said that the other nine charges of cheating and forgery—which involved about US$256 million— were very serious offences. “While the amount of money is not the only determinant of the length of sentence, it is a useful practical indicator. Where very large sums of money are involved, a lengthy sentence of imprisonment is warranted… The sentence must be sufficiently substantial to indicate to the public the gravity of the particular offence.” But the judge also took into account mitigating factors that included Leeson’s surrender, his guilty plea and his cooperation with the CAD. The fact that he didn’t profit from his deception and that there were no losses caused to SIMEX were also taken into consideration. Leeson was eventually sentenced to six-and-a-half years

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in prison. The sentence was backdated to 2 March, when Leeson was arrested in Frankfurt. Leeson was dressed in a dark suit and a tie and although he looked relaxed when he arrived at court, he blinked and bit his lower lip when the sentence was passed. While there was speculation that Leeson would file for appeal and risk a higher sentence, a spokesman for his law firm said that the ex-trader had decided not to proceed with it when the time came.

The Man Behind The Scandal

Nick Leeson comes from a modest background. He lived in Watford in North London, and was the son of a plasterer and a nurse. He started working after his A-levels to help support his three siblings after his mother died of cancer. The Daily Mirror in the UK quoted his sister: “Nick has worked hard for what he’s got and he deserves it all. He wasn’t one of those public (private) school types which has had it all handed to him on a plate.” SIMEX traders had the impression of him as both cocky and friendly and described him as “a real big shot who made big deals”. A trader from a Japanese broking firm said, “Before this thing happened, we all thought that he was unbeatable. He appeared very brilliant, very confident.”

Chapter 1: The Man Who Brought Down A Bank

But although he was in Singapore for more than three years, those who knew him seemed few and far between. Most of the traders that The Straits Times approached for comment couldn’t say much about the man. A trader from a local futures firm told the paper that Leeson did not socialise with the other people on the trading floor. But there were signs of stress just before the trader fled the country. Time magazine reported in March that, a week before he left, Leeson “kept throwing up in the bathroom at work. Colleagues didn’t know why.” Two months prior to that, the security guard at the apartment building Leeson lived in had also complained about the trader’s computer printer working overnight. The report also said that Leeson had spoken to an unnamed Barings colleague the day he left Singapore. “He sounded really weird on the phone, like he was in a really good mood. He asked me, ‘How’s life?’ It was completely out of character.” Leeson was said to have tendered his resignation to Barings via fax. He sent a handwritten note on 24 February—a day after he left Singapore—addressed to Jones and Bax from the Regent Hotel in Kuala Lumpur. In his note, he said that he left because “the pressures, both business and personal, have become too much to bear”. He also said that it was “neither my intention nor aim for this to happen” and admitted that the work

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pressures had “affected my health to the extent that a breakdown is imminent”.

Nick and Lisa Leeson lived in a private apartment on the fifth floor of Angullia View off Orchard Boulevard. In Time magazine’s 13 March 1995 issue, it said that the couple “never really seemed to fit into the affluent, neo-colonial lifestyle of Singapore—nor into the city’s multiethnic society”. One thing Leeson did enjoy was Singapore’s nightlife— Harry’s Bar at Boat Quay and 5 Emerald Hill were among his favourite bars. An incident on 16 June 1994 at the Off Quay Pub in Boat Quay led to him being convicted and fined for indecent exposure. A 21-year-old woman had been in the pub with her friends and saw Leeson staring at her through the glass door while she was outside. Although she ignored him, Leeson and his friend, Chhze Michael Aloysius, pulled down their trousers and exposed their buttocks to her. The pair pleaded guilty in court and were each fined $200. Leeson was involved in another incident at the Singapore Cricket Club (SCC). While Barings paid for his membership at the SCC, the trader was rarely there. It was later revealed that he had been suspended from the club

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in 1994 for punching a fellow member. Although Leeson apologised to the member after it happened, he still had to face the disciplinary panel and was suspended for a year. The incident took place when Leeson was in the club’s billiard room and was asked for his membership card when he wanted to play a round of billiards with some friends. Ananda Kumar, an official of the SCC’s snooker committee, said Leeson felt slighted when he asked the trader for his card. Leeson then abused him during the game and later on at the club’s bar. “He took offence at not being recognised,” said Kumar. “But the club rules are that one should produce one’s card when asked.” Kumar lodged a complaint, but ran into Leeson again at the SCC car park later in the night. “I was in a cab. He stopped the car, waved his hands, and shouted at me to get out. I did, and was punched by him.” Leeson later sent Kumar a letter of apology. In his spare time, Leeson was one of the two foreign players for Admiralty Football Club and joined them in their bid to win the National Football League Division Two title in 1993. Robert Tan, the team’s then manager, told The Straits Times that Leeson was “a friendly and down-to-earth sort of guy”.

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After the Leesons fled Singapore, it came to light that they had made travel arrangements to leave the country before the entire affair came to a head. Two weeks before the bank collapsed, Mrs Leeson made arrangements with international moving company Four Winds Logistics Service Pte Ltd to leave Singapore in early March. Diane Massimiani, an assistant manager at the company, had visited the Leesons’ apartment on 15 February to assess the cost of packing for their move to England. “They were taking only basic stuff, like the television, hi-fi and kitchenware,” she said. “They were not taking furniture.” She spent 30 minutes in the apartment and Mrs Leeson showed her around. The move to Kent was estimated to cost $3,000. Massimiani received a call on 24 February from a friend of the couple, who said that they were on holiday but wanted to confirm their upcoming departure on 1 March. Of course, the couple had already left the country by then.

The Man Behind Bars

Leeson’s life in the Tanah Merah wing of Changi Prison was a world away from his high-flying life as a trader. He was prisoner number 38406-96 and wore the standard prison uniform of blue-and-white shorts and white T-shirt.

Chapter 1: The Man Who Brought Down A Bank

Although he had asked for a room with a shower and a TV, he ended up sleeping on a straw mat like his two cellmates. Leeson became a prison tailor and spent his time writing letters to his favourite football club, Manchester City. When he heard that Lisa wanted a divorce, he grew depressed and withdrawn and turned to religion, said prison sources. Several stories emerged of what Leeson was like in prison and ex-jailbirds that knew him in prison had stories to tell upon their release. Pali Singh was jailed in 1995 for selling drugs and was released early in 1997 for good behaviour. He claimed to have been friends with the man who brought down Barings bank. “When I first met him, he was sitting all alone in the yard. No one wanted to talk to him because, you know, he’s an ang moh and everyone thought, ‘high profile case, better avoid’… But I was in charge of the hall, so I thought I’d better get to know him since he was transferred to my section. When he saw me, he smiled and introduced himself.” “Even though I knew him for nearly two years, he never felt comfortable talking about his case. If you asked him about it, he would just say ‘Yes’ or ‘No’. He wanted to keep his private life private.” Singh revealed that Leeson talked about football,

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fish and chips, beer and his life in England. Despite speculation from foreign authorities and ex-inmates, Leeson never mentioned to Singh that he had money hidden in overseas accounts. “Nick has never mentioned that he had stashed away cash, even though there were rumours floating around. I should know because I consider myself his closest pal in jail.” “When I left prison, he shook my hand and said: ‘Take care and don’t end up in shit again.’ And he told me to come and visit him in England and we could have an ice-cold beer together.”

Cancer & Release

On 7 August 1998, it was revealed that Leeson had been diagnosed with colon cancer and was being treated at the prison ward of the Changi General Hospital. A statement released by his London lawyers Kingsley Napley said that the cancer “had spread to his lymph nodes… As can be imagined, Mr Leeson’s family and that of his ex-wife, Lisa, are devastated at the news.” Lisa, who had divorced Nick the year before, said: “We are in deep shock and our thoughts at this time are with Nick and his family.” His father, William Neeson, was quoted by the AFP

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as saying that his son’s illness had nothing to do with the conditions of the prison in Singapore. “The jail is A1. It is as good as gold,” he said. The next day, it was reported in The Straits Times that Leeson’s family was planning to travel from England to visit him in prison in Singapore. Leeson had an operation on 9 August to remove a tumour, part of his large intestine and part of his colon. A few days later, his lawyers applied for his early release from prison on the grounds of ill health. A month later, he was reported to be responding well to chemotherapy and his appeal for early release was rejected by the then president, Ong Teng Cheong. A Prisons Department spokesman said that the rejection was based on the likelihood that Leeson would survive his remaining prison sentence. While he was in prison, Leeson wrote Rogue Trader: How I Brought Down Barings Bank And Shook The Financial World (1996). In 1999, the film Rogue Trader was released, based on the book and starring Scottish actor Ewan McGregor as Leeson. Leeson was eventually released on 3 July 1999 after serving three-and-a-half years of his sentence. He was put on a flight to London—bankrupt, unemployed and divorced. Leeson fully recovered from his cancer and married his

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Irish girlfriend, Leona Tormay, in 2003. Leeson became popular in the after-dinner and conference speaking circuit in the UK and Ireland. In 2006, he was appointed CEO of Galway United FC, and it was only in January 2011 that he stepped down from this position. In April 2013, it was reported that Leeson was back in the financial scene, after joining GDP Partnership in Ireland. In his job as an alternative insolvency practitioner, he helps over-indebted borrowers negotiate deals with their banks.

A Wife's Story During the course of the Nick Leeson debacle, little was known about his wife, Lisa, although she was seen with him when he returned to Singapore and at some of his court sessions. But few people knew about her, let alone knew her personally. A Time magazine report in March 1995 said that some of his associates were surprised to find out that Nick was married. Lisa also didn’t seem to leave much of a trail of her time spent in Singapore. “Almost no one had heard of Lisa Leeson in the expatriate community; she was not a member of any of the social clubs,” said the report.

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It seems she rarely left the house and had only one friend on the island. The security guard at the Leesons’ apartment wasn’t very complimentary either, saying that “her face looked angry, thin and pale”. After Leeson was sent to jail, Lisa got a part-time job working at a tea-room in Kent in England, and later as a flight attendant on Virgin Atlantic Airways so she could use her discounted flights to visit him in Singapore. When Leeson’s book Rogue Trader was released in 1996, it contained several confessions that shocked even his wife. Among them were the drunken brawls that he got involved with in Singapore, as well as geisha nights that he enjoyed in Tokyo. “I’d love to punch him,” Lisa told the Evening Standard, and confessed that she was upset that he was leading ‘another life’ while they were married. “It was not like he had another lady, but Nick was leading another life that I didn’t know about and it hurts that he couldn’t share that with me… I was his wife and he was supposed to share everything. I do feel a bit betrayed. It makes you angry and upset. We were a young couple, and I thought everything was perfect. I thought we had a good relationship but from the moment we were married, he was leading a double life.” Lisa reportedly did 69 interviews in two months when her husband was released. But she was also looking forward to moving on from the entire incident.

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“Luckily, I don’t feature too heavily in the book—it’s not nice the world knowing your private life. I feel like after this I just want to cleanse myself, to feel like a new person. I would like to get my hair done, maybe even wear a wig. I just feel dirty.” Lisa visited her husband in prison, although the visits weren’t very frequent—40 minutes every two to two-anda-half months. “I now try to keep them light-hearted and upbeat, because it’s hard on Nick,” she said. “It’s emotionally hard. We’re in this large room, there’s a good 15 people and you have this little cubicle. There’s a glass screen so there’s no physical contact—you can’t touch, you can’t even hold hands.” At that time, Lisa said that she was also looking forward to a future with her husband once he got out of prison: “I think it will be difficult but you just hope everything will be fine. You have to live with a dream, with the memories.” However, in mid-1997, Lisa began divorce proceedings. In January 1999, The Express reported that Lisa had married Keith Horlock, who she had known for 11 years, at a country house in Kent. They had originally intended to marry in August 1998 but postponed the wedding when they found out that her ex-husband had been diagnosed with colon cancer. “How could we have enjoyed the day knowing Nick was so ill?” Lisa said. “It just wouldn’t have been right.”

The Taxman’s Revenge

The Taxman’s Revenge

Chapter 2:

The Goods and Services Tax (GST) was introduced in Singapore in 1994. Since then, there have been numerous cases of GST fraud and the most common offences involved sole traders of businesses. Here are some of the more notable cases.

Magdalene Chua

The first person to be convicted of GST fraud in Singapore was Magdalene Chua, a businesswoman who ran two computer parts businesses. The sole proprietor of Paradigm Masters International and DME Integrators had applied for GST registration even though her companies did not have the minimum combined sales turnover of $1 million. To make up for this, she created fictitious purchase orders and sales invoices. She also inflated or made false entries in her GST returns. Over three years, she cheated the taxman of more than $200,000.

Chapter 2: The Taxman’s Revenge

However, when asked to prove her claims for GST refunds, Chua claimed that she had thrown her invoices away. Because of her evasiveness when questioned, the Inland Revenue Authority of Singapore (IRAS) suspected that she was hiding something, and the computer forensics team swung into action. They raided her flat and seized her computer, from which experts retrieved a file with all the evidence needed to charge her. The team discovered that she had claimed GST refunds totalling $214,437.94 as ‘tax incurred’ on her business purchases using fake invoices. Chua also became the first person to be convicted of a tax offence through evidence obtained by computer forensics. While computer evidence had been used in the past, it had mainly been used to bolster cases. IRAS had set up its computer forensics team in 2001 as the use of technology in business transactions increased. Chua appeared in court on 10 June 2004 and pleaded guilty to 11 charges of GST fraud. 30 other charges were also taken into account. She repaid the full sum that she had claimed from IRAS. Her lawyer, Mark Goh, pleaded with the court for a short jail term as she was the main caregiver of her then seven-year-old son. He revealed that she had started her business so she could work from home and care for her son at the same time.

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Chua was teary as her lawyer explained that the family was facing financial difficulties. Her mother-in-law had to sell her home of 23 years to raise money to repay the authorities, while her husband was only earning $1,500 a month, a far cry from the $7,000 he used to be paid as an IT manager. But magistrate Gilbert Low said that the court had to send a strong message that GST fraud would not be tolerated. Chua was sentenced to 10 months in jail and ordered to pay a penalty of $207,460.89.

Shyam Lekhraj Bhojwani

One of Singapore’s biggest GST fraud cases emerged in 2006, featuring an elaborate scheme by the parties involved. Shyam Lekhraj Bhojwani was a partner in Lekhraj & Bros, a textile wholesaler working out of an office in North Bridge Road. Between March and July 2004, he carried out a series of complex, but bogus, mobile phone trades with another trader. He then submitted large claims for GST refunds based on the purchase and sale of these mobile phones and accessories. All of the purchases were made from just one company—Sadhashiv Enterprises (SEPL), which was owned by his friend, Mahesh Daswani. Lekhraj’s accounts showed that these phones were sold to customers in Indonesia, which means that there would

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be no GST levied on them as they were exported. As it turned out, these phones didn’t even exist. As a result of this detailed scheme, Lekhraj claimed $414,483 in GST refunds and received another $302,988 in input tax (the GST paid on purchases or goods imported for business) credit. IRAS officers found 97 separate ‘suspicious purchases’ in Lehkraj’s records, all of them for phones purchased from SEPL. The two men had concocted a complex scheme to make the transactions seem genuine. Daswani instructed his staff to act as ‘carriers’ and fly from Singapore to Indonesia. They carried flattened cardboard boxes and made sure that they received an airline tag for each of them. These ‘carriers’ then returned to Singapore on the next flight and gave the baggage tags and boarding passes to Daswani. With these made-up ‘export trips’, Lekhraj put together documents to make it look like these were actual business trips. There included invoices from Lekhraj & Bros to the Indonesian customer, the export permit, a written declaration by the carrier, as well as baggage tags, boarding passes and air tickets. But what the IRAS found suspicious while auditing the company’s accounts in 2004 was that the weight of the goods declared were usually too large. There were also several inconsistencies—a carrier once declared

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that he was carrying 800 phones weighing 120kg, but the baggage tag listed the weight as 13kg. It was also suspicious that the carrier did not have to pay any extra baggage charges, even though the weight he declared was exceptionally heavy. Lekhraj pleaded guilty to four counts of overstating GST that amounted to $621,767. Two charges of wilful intent to evade GST were also taken into account, bringing the amount of tax involved to a total of $717,472. On 1 November 2006, District judge Miranda Yeo sentenced Lekhraj to one year and two months in jail and ordered him to pay a penalty of $1.87 million.

Mahesh Sukhram Daswani

Between July 2003 and August 2004, Mahesh Sukhram Daswani filed for fictitious GST refunds on exports of mobile phones that didn’t actually exist. His company, Sadhashiv Enterprises (which later became SEPL), claimed to be exporting these phones to neighbouring countries. The IRAS had become suspicious of the rapid increase in GST refunds from Sadhashiv Enterprises, and huge increases in its trading volume within a very short period of time. Following an audit of the company’s GST declarations, the IRAS detected files containing instructions of fictitious sales and purchases for Daswani’s

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company. Invoices from suppliers were also deliberately altered to reflect that GST had been paid. Daswani claimed a whopping $5.69 million in fake taxes, earning him the longest jail sentence for GST fraud and the highest penalty to date. On 13 August 2010, he was jailed for four-and-a-half years and ordered to pay a fine of more than $17 million—three times the tax that was falsely declared. Daswani’s case was linked to that of Shyam Lekhraj Bhojwani, who was jailed in November 2006. Daswani pleaded guilty to 11 charges, with another nine charges of helping SEPL and Lekhraj & Bros evade tax taken into consideration when he was sentenced.

Shaik Ali Shaik Mohammed

In 2006, the director of general wholesale trade business Cellzone was jailed for three months for GST fraud offences committed between June 2004 and January 2005. While there were nine charges in total against Shaik Ali Shaik Mohamed, the prosecution only proceeded on seven of them. According to the IRAS prosecutor, Cellzone’s $71,887 claim for input tax in 2004 was rejected as the company did not declare any taxable supplies. Cellzone was quizzed about these claims in February 2005 but failed to respond.

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Investigations showed that Shaik Ali had inserted fictitious amounts ranging from $108,000 to $315,757 as the company’s taxable purchases in 2004. Using the rate of five per cent GST on these ‘transactions’, he made input tax claims of between $5,400 and $15,788, bringing the total GST refund claim to $63,876. While IRAS prosecutor Sinnadurai Maniam sought a stiffer sentence so as to deter potential fraudsters, Shaik Ali maintained that he did not actually gain anything from his actions. He was purportedly in financial trouble, having been cheated by his Indian clients and hounded by suppliers who he owed money to. But district judge May Mesenas said that his offences were too serious and the amounts falsified were substantial. Shaik Ali was ordered to pay a penalty of $191,628—three times the amount of GST that he evaded.

Steinberg Tan Geok Yong

For making false claims of GST refunds that amounted to $105,536.22, Steinberg Tan Geok Yong was sentenced in July 2010 to two months in jail and a fine of $316,608.66. A partner in Steinberg & Lindsey Food and Beverage, Tan pleaded guilty to five charges of overstating input tax and making false entries in the company’s GST returns between April 2004 and June 2005.

Chapter 2: The Taxman’s Revenge

Tan was also charged for failing to comply with notices issued by the Comptroller of GST to furnish documents and particulars concerning his business.

Suhary Bin Abdullah

Republic Beverages Company Private Limited (RBC) was started in 2006 and engaged in the supply and distribution of beverages. From March to August 2008, its director Suharry Bin Abdullah made false entries in the company’s GST returns, claiming a total of $32,158.98. When the IRAS asked Suharry for supporting documents to back up his claim, he created six fictitious purchase invoices involving a GST amount of $20,394.64. Both the company and its director faced eight charges each. Suharry pleaded guilty to 10 of them, with the remaining six taken into consideration when sentencing. In July 2011, he was sentenced to four months in jail and ordered to pay $140,023.59. RBC was fined $40,000 and required to pay the same penalty.

Tan Kim Teck

Tan Kim Teck, the sole proprietor of vehicle parts and accessories wholesaler TKT Trading, started his business in 1996 and registered for GST in 1998.

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He was responsible for submitting the company’s GST declarations. Investigations conducted by the IRAS later revealed that Tan had added the company’s transhipments goods in his GST returns between 2000 and 2007. These are goods that were transferred from importing vessels to exporting vessels—as they didn’t actually enter Singapore, there wouldn’t have been any GST incurred. Investigations also showed that Tan had burnt the physical copies of the records when he realised that the IRAS would request for them in order to assess the amount of tax involved. The charges brought against him involved intent to defraud the Comptroller of GST of $219,596.42 in taxes over an eight-year period. (Although the statutory time bar is seven years, the IRAS is able to take tax evaders to task beyond this period where fraud is committed.) Tan pleaded guilty to 11 charges of creating false GST entries in order to evade tax, as well as three charges for destruction of supporting documents. There were also 18 other charges of creating false entries that were taken into consideration. In November 2011, he was sentenced to eight months and two weeks in jail and ordered to pay a fine of $413,880.

Chapter 2: The Taxman’s Revenge

Teo Kiok Seng

Following his stint as the director of United Team Enterprise Pte Ltd from 1993 to 2003, Teo Kiok Seng took on the role of accountant from 22 July 2003. He continued submitting the company’s GST declarations in his new position, a task he had done since the company became a GST-registered trader in 1994. IRAS investigations revealed that Teo had falsely declared export figures and purchases in the company’s GST returns between 30 September 1996 and 30 April 2007, despite it being dormant during that time frame. In total, Teo made 128 false GST claims and defrauded the Comptroller of GST of $1,038,241.50. He admitted using these fraudulent GST refunds to repay his debts as his business had failed. However, he continued to commit fraud even after his debts were cleared. Only 40 of the 128 charges were proceeded on—two of the charges were withdrawn and the remaining 86 charges were taken into consideration. Teo pleaded guilty to the 40 charges and was sentenced to 24 months in prison and ordered to pay a penalty of $1,535,940.

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Charity Under Fire

Charity Under Fire

Chapter 3:

In 2005, the National Kidney Foundation (NKF) found itself at the centre of one of Singapore’s most high-profile financial scandals. The shocking details of the saga involving the nation’s largest charity organisation had everyone riveted for the next three years.

SPH Defamation Suit

It all began in July 2005, when the NKF and its chief executive T. T. Durai filed a defamation suit against Singapore Press Holdings (SPH), over an article in The Straits Times titled ‘The NKF: Controversially ahead of its time?’. The piece by senior correspondent Susan Long mentioned that a gold-plated tap had been installed—and later replaced—in Durai’s private bathroom in his office suite. Durai alleged that the article, published on 19 April 2004, implied that donors’ funds were being misused and that it had damaged the charity’s reputation.

Chapter 3: Charity Under Fire

Before the trial began on 11 July, the NKF applied for special damages of $3.24 million—the amount it claimed it had lost in donations after the article was published. However, Justice Tan Lee Meng dismissed the claim and ordered that the NKF pay SPH’s legal fees as a result of this last-minute move. Things went downhill for Durai the moment his salary was revealed. On top of his $25,000 monthly wage, he was also paid 10 to 12 months’ bonus a year, which brought his annual salary to between $550,000 and $600,000. There were reportedly audible gasps in the courtroom when these figures were revealed. Acting for SPH, Senior Counsel Davinder Singh said that he had asked the NKF three times—twice through the courts—to make the salary of its CEO public. He wanted to show that the organisation was neither honest nor transparent about the way its donors’ funds were being used. Durai argued that he wasn’t required by law to reveal his pay to the public, even though he did concede that they were the ones who paid his salary. He also said that he wanted to protect his privacy. But Singh asked him: “The man who earns $1,000 a month who donates $50... every month thinking that it is going to save lives, should they now know that that is the kind of money you earn?”

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Durai replied, “I don’t see the need for him to know.” Singh had accused him of not wanting to disclose his salary as he knew that he would lose moral authority with donors, but Durai denied these allegations. He was the only witness who took to the stand and was represented by Senior Counsel Michael Khoo. Another issue that came under scrutiny was Durai’s travel perks. The NKF had always maintained that none of its executives flew first class and even threatened to sue those who made such accusations against them. Two people had to apologise publicly as well as pay damages and costs for saying that they had seen Durai fly first class. When questioned in court, Durai admitted that he had flown first class on some airlines. His explanation? That the board had allowed this, as long as it didn’t cost more than a Singapore Airlines business class flight. When asked if he should ‘do the right thing’ by the two people who had made those claims, Durai said no, because he didn’t travel first class using NKF funds and, when he did so, he paid the difference himself.

During the morning of the trial, Durai claimed that SPH had an agenda against the NKF: “NKF has been a strong supporter of MediaCorp, working with MediaCorp. SPH

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has its own TV station, MediaWorks. And they probably have strong reservations about with whom we work.” He elaborated that SPH “feels they are the regulating body on matters of how charities are run. They believe that they have strong views on how charities should be run. I believe they want to be the fourth estate, they are the determinants of public interest, determinants of transparency.” However, he withdrew this allegation of an agenda after being questioned further by Singh. The issue of transparency was a big subject of contention during the trial. Singh reiterated how difficult it was to get any information from NKF and accused the organisation of trying to block information from the public. The ‘gold taps’ fiasco also took centre stage. NKF objected to the first six paragraphs of The Straits Times article, in which a plumber who worked on the bathroom was said to have “lost it” when he had to install, among other things, “a glass-panelled shower, a pricey German toilet bowl and a gold-plated tap”. The piece added that the taps were “scaled down” after his outburst. The NKF were contacted about this before the article was published, but said it was “difficult for us to give an answer to enlighten your readers” since the newspaper would not reveal who the plumber was. Durai’s lawyer Khoo noted in court that these paragraphs alleged deliberate and dishonest misuse of

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NKF supporters’ donations. He also said that there was no ‘gold-plated tap’. Durai insisted that he had not given any instructions as to the type of bathroom fittings that should be used and had instead left it to the architects. He claimed not to have liked the basin and shower mixer—which were white with what appeared to be gold-coloured trim—when he first saw them. “Although I did not know what they would have cost, they were out of place and could convey a wrong impression that they were expensive,” he explained. He said that he had the fittings removed and replaced despite a colleague telling him that the taps actually looked ordinary and that there was “no big deal”. The next day’s hearing involved more revelations from Singh that did not paint the NKF in a very good light. These included the fact that the organisation had inflated the number of patients it had, that its reserves were running out and that Durai had paid directorships at other companies that were not disclosed to the NKF. It was also revealed that Durai and six other officers had access to a fleet of eight cars and drivers at any time, and the NKF paid for the road tax as well as repairs and maintenance of the cars. Durai also had a “commercial relationship” with Matilda Chua, a NKF board member with interests in a call centre that was contracted with NKF, a fact that also wasn’t revealed to the board.

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By the end of the day, Durai dropped the defamation suit against SPH.

Although almost 40,000 Singaporeans signed an online petition calling for Durai’s removal from his position at the NKF, and vandals spray-painted abuse on the walls of the building, the chief executive was given a standing ovation when he gave a short address to a packed auditorium at the NKF headquarters on 13 July 2004. The next evening, (then) Health Minister Khaw Boon Wan announced the resignation of Durai and the entire NKF board. On 1 December, it was reported that Durai had paid SPH’s legal costs for the defamation suit, which amounted to $358,000. The publishing company had asked earlier for the costs to be borne by Durai on his own or together with the NKF board members, but not from donors’ funds. Durai paid for the costs himself.

Corruption Charges & Trial

On 17 April 2006, Durai was arrested to face charges filed by the Corrupt Practices Investigation Bureau (CPIB), concerning matters that arose during his time

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as CEO of the NKF. These were brought against him by the Commercial Affairs Department (CAD), and were the first charges against the old NKF team after criminal investigations were launched in August 2005. Durai was accused of intending to deceive the NKF when he approved payments to two companies for services that apparently were not rendered. The contracts were allegedly for $20,000 to interior design firm DTC and $5,000 to advertising firm DecisionOne International. Durai posted bail for $50,000. Ex-NKF chairman Richard Yong and former treasurer Loo Say San were also accused by the CAD of failing in their duties as directors, in relation to a botched Forte Systems computer software deal worth $4.3 million. No bail was imposed on them as the charges were not serious enough to warrant it. Also charged was former NKF director Matilda Chua, although the accusations against her had nothing to do with the NKF. She was charged with falsifying accounts at Global Net Relations, a company in which both she and Durai were directors. She posted bail for $20,000. In court on 5 March 2007, both Yong and Loo stressed that they trusted Durai very much and therefore did not question him when asked to clear a $20,000 payment to Mr David Tan for ‘consultancy services’, despite there being no supporting documents. Yong signed the cheque while

Chapter 3: Charity Under Fire

Loo approved the payment, and both men said that they would not have given the go-ahead if they had known that no work had been done. “The cheque was given to me by the CEO,” said Yong, who signed the cheque on 15 January 2004. “If it was from a lesser person, I would have asked for supporting documents... I presume that since it was from the CEO, the process would have gone through the proper channels.” Yong also told Deputy Public Prosecutor David Khoo that when he signed the cheque, he had no clue whether Tan had actually provided the services that Durai claimed he had. “But I don’t think T. T. would give me the cheque to sign and say it’s for no work done,” he said. Loo had a similar rationale: “I have worked with T. T. for nine years and I don’t have any reason to doubt him.” This was the first time that Loo and Yong both came face-to-face with Durai since the civil suit was filed against them, but the trio did not exchange more than a cursory glance despite sitting a few metres away from each other.

Star Witness Takes The Stand

David Tan Kee Kan was the interior designer who received the $20,000 cheque in question from Durai. When Tan took to the stand, the prosecution accused the star witness of lying and contradicting himself to help his close friend,

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Durai. At one point, the prosecution even described his accounts to be “as different as north and south”. When questioned by DPP Khoo, Tan said that Durai had asked him to send an invoice for $20,000, which was to be given as a ‘token of appreciation’ for Tan’s fund-raising efforts, even though no work or consultancy service had actually been provided. However, when questioned by Durai’s lawyer, Senior Counsel Sant Singh, Tan said that he had in fact given Durai some advice and the money was payment for such. Tan had earlier told the CAD as well as auditor KPMG that he had offered consultancy services to Durai, with ‘ad hoc advice’ on matters such as the selection of floor tiles and reduction of renovation costs. But in a statement to CPIB officers, he said, “I know I had also committed an offence by submitting false invoice to NKF for payment. If there was a way for me, I do not want to be taken to task or prosecuted in respect of the $20,000 which T. T. Durai voluntarily gave me.” Tan had earlier admitted that he had lied to the CAD and KPMG but, in court on 15 March, he said that he was telling the truth when he spoke to those two organisations. DPP Khoo suggested that Tan was deviating from the statement he gave CPIB to help Durai, but Tan insisted that there was no conflict in his statements because of the way the word ‘work’ was interpreted. He claimed

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that during his chat with KPMG, he understood ‘work’ as referring to the various times he had advised Durai on the dialysis centre, while at his CPIB questioning, he took ‘work’ to mean ‘full design consultancy work’ involving design drawings. He also confessed how the press reports concerning his statements had affected him: “It’s quite upsetting to read in the press which reported how I flipped and flopped and how I’m contradicting himself.” He continued, “There was definitely work done, just not ‘full consultancy work’. If it’s full design consultancy services, I should be charging more than $20,000. I just want to clear this up once and for all.” When questioned by Durai’s lawyer Singh on 20 March, Tan retracted the statements he made to the CPIB and said that he went along with it as he wanted to avoid persecution himself. Although Tan had said that he had given Durai ‘ad hoc advice’, he was unable to provide the CPIB with any evidence, so he “very foolishly” took the position that the money was for his fund-raising efforts. Singh put this to him: “In these circumstances, you readily admitted to being a prosecution witness because you felt this way was the best way out for you in this predicament.” Tan agreed.

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Durai Found Guilty

On 11 June 2007, District Judge Abdullah found Durai guilty of using a false invoice to mislead the NKF into releasing $20,000 to Tan in 2004. The judge revealed that the two major points that led to this decision were Tan’s inconsistent testimony and Durai’s decision not to testify. “Not providing such an explanation... clearly carries with it the implication as well that the invoice was false, and the payment, unsupported,” he said. “The Accused is in the best possible position to explain the purpose of the payment, why he had authorised it and why he had told David Tan to raise an invoice. David Tan’s evidence, even if it had been accurate and complete, would not have given the whole picture in respect of the charge.” Durai kept his head lowered throughout the case but looked up and gave a wry smile when the judgement was read out. When asked as he was leaving the court—on bail of $100,000—how he could still smile, he shrugged and said, “What do you expect me to do?” Durai was sentenced on 21 June to three months in prison, which District Judge Abdullah described as “more than minimal” and yet not “crushing”. “A fine would not appropriately reflect the seriousness of the offence, the harm caused, as well as the level of culpability,” said the judge. Durai was put on bail of $100,000 pending his appeal.

Chapter 3: Charity Under Fire

Second Charge Dismissed

Durai was back in court on 15 January 2008 for a pretrial conference to face charges of using a false invoice to approve a $5,000 payment from the NKF to an advertising company, DecisionOne. The charges were withdrawn on 22 July 2008 and he was given a discharge amounting to an acquittal. Durai was sent to prison on 10 June after losing his appeal for his earlier conviction. He left prison on 11 August 2008 after completing two-thirds of his threemonth sentence. The Straits Times reported on 17 June 2012 that Durai had cleared his $4.05 million debt to the NKF the year before, with a little help from his friends. The money came from businessman Charles Letts, architect Albert Hong and Durai’s younger brother, who works as a business consultant. The report also stated that Durai was based in Singapore at the time it was published, running his own consultancy which, amongst other things, promoted anti-ageing products.

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Cheats Get Caught

Cheats Get Caught

Chapter 4:

Tan Cheng Yew

Lawyer Tan Cheng Yew went missing in 2003 after absconding with more than $4 million from five of his clients. The five plaintiffs—Madam Soh Keng Ngoh and her children Tommy Tan Kwee Khoon, Iris Tan Kwee Lian, Vincent Tan Kwee Beng and Simon Tan Kwee Boon—filed a legal suit on 14 February 2003. They sued Tan for breach of trust and also took an injunction to freeze his assets. Tan was a partner at TanJinHwee, Eunice & Lim Choo Eng, and had last contacted the firm on 10 February, saying he was in Perth, Australia, and could not return as he had lost his passport and mobile phone. He ceased to be a partner of the firm after they could not locate him. When contacted, the firm said, “We are concerned but don’t want to speculate on what’s happening. We are in touch with his family and hope he will show up soon.” The missing lawyer had a good reputation within the profession and lawyers that the media spoke to were shocked by his disappearance. “Once, he even offered to

Chapter 4: Cheats Get Caught

pay the legal fees for a juvenile delinquent,” said fellow lawyer Irving Choh, who had known him for eight years. Madam Soh and her four children planned to build a new church and had asked Tan (who is of no relation to the family) to withdraw $1.5 million from their trust fund. The money was meant to have been released on 8 February, but the lawyer was nowhere to be found. He was also scheduled to attend a meeting with family representative Tommy Tan on 10 February at the Central Christian Church office in Amoy Street, but failed to show. Later that month, it was discovered that the lawyer had more than AU$1 million in debts in Australia, chalked up from his visits to casinos there. Tan had apparently been indebted to at least two casinos for more than a year and the casinos involved had engaged private investigators to track him down. He was reportedly a frequent gambler in Melbourne’s Crown Casino, Sydney’s Jupiters Casino and Perth’s Burswood Casino. Tan, a Malaysian by birth and Singaporean permanent resident, comes from a family of lawyers. His father is a retired lawyer and his brother, Professor Tan Cheng Han, was a Senior Counsel and the then dean of the law faculty at the National University of Singapore (NUS). Tan himself was a star debater during his time at NUS.

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In September 2009, Tan resurfaced in Germany and a formal request was made by the Ministry of Law to the German authorities for his extradition to Singapore. Tan returned to Singapore the following month and was taken to the Subordinate Courts, where he was charged with six counts of cheating and criminal breach of trust. While Tan appeared calm and collected in court, his eyes grew wet when his father approached the dock to speak to him when the session ended. Tan’s sequence of crimes were revealed by Deputy Public Prosecutor Siva Shanmugam when the trial started on 15 November 2010. In December 2000, Tommy Tan Kwee Khoon asked his lawyer, Tan, to sell 24 million shares in Poh Lian Holdings, a construction company founded by his father. Tan sold nine million shares for $1.94 million and told his client that the money would be invested in a fixed deposit account in a bank in Australia. In actual fact, there was no such account and Tan put the money into his personal bank accounts instead. In May 2002, Tan again encouraged his client to add $900,000 to this fictitious account. Tommy Tan’s family also gave the Central Christian Church (CCC) a loan of $1.5 million in April 2001 to purchase a piece of land and build a church on it. As the tendering process for the land had not yet started, Tan convinced the Tan family to place the money under

Chapter 4: Cheats Get Caught

his trust. Instead, he deposited the money into his DBS account and pledged it as security when taking a personal loan from DBS. In January 2002, he told the family that, under the law, the church had to start repaying the loan immediately— despite there being no such law. Once again, they gave him a cheque for $480,000 to make it look as if the church had started making repayments, even though this was only due in the third year. Investigations showed that Tan had intended to use that sum towards clearing his personal debts. Out of the six counts of cheating and criminal breach of trust, one charge of each had been dismissed during the course of the trial. These involved other parties that Tan had allegedly taken money from. The accused’s lawyer, Senior Counsel Michael Khoo, argued that his client did not deceive Tommy Tan into giving him the $480,000. This money was allegedly meant to be passed to Tommy Tan’s younger brother, Vincent Tan Kwee Beng, because he was not a member of the CCC. The Tan family was supposedly aware of this arrangement. Khoo also said that Tan could not be guilty of pocketing money from the family as the money actually belonged to the church. “The money was loaned to the Central Christian Church and was held by my client, who was appointed

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the trustee, so the money clearly belongs to the church and not to the Tan family,” said Khoo. The senior counsel also argued that his client had acted as a personal ‘broker’ for the family, and not in his personal capacity as a lawyer. He elaborated by saying that even though the family’s first loan agreement to the church had included the name of Tan’s law firm, the second one a year later only had his name, which showed that Tan was acting in his personal and not professional capacity. This was an important distinction for Khoo to make, as criminal breach of trust committed in a professional capacity could be punished with a maximum sentence of life in jail and a fine, while the maximum penalty for ‘ordinary’ criminal breach of trust is only a three-year jail term and a fine.

When Tan took to the stand on 21 January 2011, he revealed that he had merely “seized the opportunity” to obtain a credit facility from the bank when he became the trustee of $1.5 million. “I would not say I engineered myself as a trustee. I seized the opportunity... when I knew I was going to be a trustee. At that time I did it... I really thought I could pay back one day,” he said.

Chapter 4: Cheats Get Caught

In the amended charge, Tan was alleged to have misappropriated $1.5 million from the Tan family. On 18 April 2011, Tan was sentenced to nine years in jail for criminal breach of trust and cheating involving a total of $4.8 million. He was convicted of misappropriating $1.5 million and $1.9 million from the Tan family in 2001 and was also found guilty of two charges of deceiving Tommy Tan Kwee Khoon of $480,000 and $900,000 in 2002. The sentence was backdated to his remand on 22 October 2009. Tan’s lawyer Khoo read a mitigation plea from four of Tan’s classmates from the National University of Singapore law school. Senior Counsel Hri Kumar Nair, Senior Counsel Harpreet Singh Nehal, Adrian Tan and Tony Yeo wrote it in their personal capacities and the former two were even in court when it was read out. They said that while they could not comprehend what he did, “none of us will ever be able to fathom the fear and extreme desperation which would have caused him to walk away from the only life he knew, his family and all the people who were dear to him”. They painted a picture of a man who was a model law student and a very bright man who helped classmates with their work. They also said that he spent considerable time and money helping needy children at The Haven, a residential home run by the Salvation Army. And while

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they acknowledged the severity of his actions, they also asked that he not be punished too severely for it. “There is no question that Cheng Yew’s acts have hurt innocent people... It is also clear to us that Cheng Yew has already borne not inconsiderable punishment for his conduct—being away from his aged parents for years and having to live with the daily knowledge of the shame he has brought on his family. The shame and pain can never be eradicated… We ask that his journey back into society be allowed to begin sooner, rather than later.” Tan’s case featured the largest amount of money involved in a financial crime in Singapore, until it was eclipsed by fellow lawyer David Rasif ’s case in 2006. Tan filed an appeal and, in January 2012, his case went to court. The defence’s arguments for appeal were that a rule in the extradition law was breached when Tan was extradited from Germany to Singapore. Khoo also took issue with the definition of the word ‘attorney’ stated in the criminal breach of trust case and argued that it didn’t mean to include ‘lawyer’. However, Tan’s appeal was not successful and, in November 2012, his sentence was increased from nine to 12 years.

Chapter 4: Cheats Get Caught

Pauline Sim Wei Min

Pauline Sim Wei Min was jailed for 16 months in May 2010 for cheating and forgery. Sim worked for a finance company and had, in 2006, duped Madam Woon Lay Kian into placing $210,000 into a fixed deposit account with Hong Leong Finance, promising her high returns. In fact, Sim used the money to clear her own debts. The fake account was discovered in August 2008 when Woon’s sister, a bank officer, checked the account for her as she had wanted to withdraw the funds upon maturity. Sim pleaded guilty on 6 April and returned Woon $150,000 by the time she was sentenced.

Adrian Ng Shen Ling

A businessman faced 121 charges of cheating as a result of an online scam that he had orchestrated, tricking buyers into paying for electronic goods that he never delivered. Adrian Ng Shen Ling raked in almost $1.8 million from his criminal activity. In October 2007, Ng chose not to fight bail of $1.5 million but to be remanded instead. His charges included: • 46 counts of forging invoices in 2005 and 2006, purportedly issued by Shen FC Zhongyutai, FamilyCon Electronics Enterprises and Mic.GEn Trading

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• 70 charges of cheating—Ng engaged in internet trade to sell products such as PlayStation consoles, iPods, hand-held game sets and other electronic products that he knew he could not fulfil • Purchasing three cars from the proceeds of his crimes, which are offences under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act • Failing to report his change of address within 28 days in 2006 • Giving false information about his business and home address to the Registrar of the Accounting and Corporate Regulatory Authority in June 2005 Ng marketed himself to potential customers as being able to sell electronic products below market prices because he had a China-based parallel importer. Initially, he bought the items from retailers in Singapore at the usual high prices and sent these to his customers, who were from countries such as Canada, Australia, the UK and other parts of Asia. Although he incurred losses, he did this in order to make a name for himself and to ensure his customers gained confidence in him. After some time, he took additional orders from them. His customers transferred the money to Ng but he never delivered the goods.

Chapter 4: Cheats Get Caught

The victims of his scam had allegedly sent money to his SG Gadgets account with the United Overseas Bank. The sums ranged from $771 to $143,779. The police recovered $45,000. Between mid-2005 and his arrest in August 2006, Ng reportedly received 420 transfers into his bank account, totalling $5.7 million. Of this amount, he returned $1.3 million to his clients, spent $2.4 million to buy game machines locally, used over $8,000 to pay bank charges and pocketed almost $1.9 million, which was unaccounted for. On 10 January 2008, Ng was jailed for six years. He admitted to 20 charges of cheating and another 111 charges were taken into consideration during sentencing.

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Brewery Scandal

Brewery Scandal

Chapter 5:

In 2004, Asia Pacific Breweries (APB) employee Chia Teck Leng was convicted of pocketing over $100 million of the company’s funds. It was the biggest case of commercial crime since Singapore Airlines employee Teo Cheng Kiat embezzled $35 million from the airline over the span of 13 years. Chia’s case first came to light on 4 September 2003 when APB announced that he had been suspended pending investigations. Chia was a finance manager with APB subsidiary Asia Pacific Breweries (Singapore) and it was implied that he had been charged with forging documents in 1999 to open and operate a bank account. APB said that steps had been taken to freeze the unauthorised bank account. Chia faced the following charges: • Forging a certified extract of a board resolution that gave approval for APB(S) to open a bank account with Skandinaviska Enskilda Banken (SEB) and authorised Chia to “operate and sign all transactions in relation

Chapter 5: Brewery Scandal

to the said account”. The forgery was alleged to have taken place around 3 February 1999 and was purportedly ‘signed’ by top APB management. • Opening a bank account with SEB in the name of APB(S) in January and February 1999, of which he was the sole signatory, and dishonestly inducing the bank to extend credit of $3 million to him. Chia, who is married with two teenage sons, was remanded in custody. APB appointed accounting firm PricewaterhouseCoopers and law firm Drew and Napier to undertake an investigation. It also set up a special committee of directors to oversee the investigations and take any necessary actions. This was the first scandal of its sort for APB(S), one of the region’s largest breweries, with sales of $372.7 million in 2001 and an after-tax profit of $38.6 million. The day the allegations against Chia were announced, APB ended up as the top loser on the Singapore Exchange—35 cents lower at $6.30. It was only when further investigations were made into Chia’s case that the full extent of his cheating was revealed, involving a staggering amount in excess of 100 million. A week after the scandal first broke, it was revealed that Chia had misled a total of four banks into giving him credit of $116 million. In addition to Scandinavian

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bank SEB, two Japanese banks and one German bank were now added to the fray. Eight new charges were added on 10 September—four counts of forgery and four for cheating—for an amount of $113 million. These new allegations started from June 2000 when Chia once again tricked SEB into extending a credit of US$8 million. The following month, he allegedly duped Sakura Bank (which later became Sumitomo Mitsui Banking Corporation) into giving him a credit of $15 million. Chia submitted fictitious documents to the banks, leading them to give him credit facilities in the name of APB, with him as sole signatory. In August 2000, he swindled the Fuji Bank (which then became Mizuho Corporate Bank) into a credit line of US$18 million. The final allegation took place in March 2003, when he cheated Bayerische Hypo-und Vereinsbank Aktiengesellschaft (HVB) into a loan of US$30 million. Chia was once again remanded for further investigations.

On 17 September, Chia was charged with withdrawing about $117 million of the $160 million credit that he had tricked the banks into giving him. Eighteen fresh charges were brought against him, eight of which concerned withdrawals of money between March and July 2003.

Chapter 5: Brewery Scandal

Chia now faced 28 charges of cheating and forgery in total. The prosecution also revealed that in January 1999, Chia had forged documents and opened a Citibank account in APB’s name, with himself as the sole signatory. Chia was also accused of forging other documents, including a schedule of fixed deposits, which lists the amounts and dates on which deposits are made and when they will mature. This led APB to believe that he was transferring its funds from a legitimate OCBC account to a fixed deposit account in Citibank. Instead, the money went to a bogus SEB account and the Citibank account he had opened for his personal use. The charges against Chia now stood at 32—18 counts of cheating and 14 charges of forgery. Chia was back in court on 1 October after being denied bail by district judge Wong Choon Ning. Only $30 million of the $117 million that Chia had siphoned had been recovered by then and Deputy Public Prosecutor Thong Chee Kun argued that Chia was likely to abscond if he was released. Chia’s lawyer, Edmond Pereira, said that his client wished to apply for bail to sort out family matters. Although the charges against Chia did not permit bail, the court had the discretion to grant him such. Pereira’s

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plea was that Chia had co-operated with the authorities and had also assisted in recovering the funds both in Singapore and overseas. He suggested that bail be set between $20 million to $30 million. But the DPP urged not to give Chia any chance of being released as the serious offences that he had committed carried a maximum sentence of life imprisonment. The DPP noted that Chia had only been cooperative as he knew the game was up and there was no chance of him running away from the paper trail. In addition, he had not been forthcoming about information on his personal bank accounts, which gave the impression that he might have large sums of money hidden away in overseas accounts. The DPP argued that Chia would probably leave the country if he was released and the judge agreed with this.

Another 14 charges were levied against Chia in December, and among them were two money-laundering charges. Revelations of him hiding money in various overseas bank accounts also emerged. He allegedly had AU$8.8 million hidden in three Swiss bank accounts, which came from a Westpac bank account in Melbourne, where he supposedly kept all his winnings from casinos in Australia and London. This

Chapter 5: Brewery Scandal

led to a further charge of concealing the benefits from his criminal conduct. Chia was also accused of hiding a further $1.5 million by ‘buying’ 1.5 million shares in the name of Ms Li Jin, a Chinese national who was revealed to be his girlfriend. These shares were bought in November 2002 in an IT company, Business Continuum Solutions, which was started in February 2002 by Chia and another man, Lim Bok Hoo, before Li became the principal owner. Other charges included four counts of criminal breach of trust, as he was accused of misappropriating $53 million from APB through unauthorised cheque transfers. On top of these, he was also accused of instigating Ms Li to enter Singapore using a forged Taiwanese passport on eight separate occasions between 12 November 2002 and 9 January 2013. DPP Thong Chee Kun applied to transfer all the 46 charges against Chia to the High Court, which was granted by district judge Chay Yuen Fatt.

High Roller

Details of Chia’s gambling lifestyle came to light during the course of the case, and he was painted as a highroller who had spent a total of $62 million in several overseas casinos. He was a VIP patron at Crown Casino

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in Melbourne, where the Australian police unearthed AU$190 million in his account, deposited over a period of four years. In October 2003, the Supreme Court of Victoria in Melbourne ordered that the AU$29.3 million that was found in a bank account in Chia’s name be frozen. The Australian police also revealed that since July 2000, Chia had flown to Melbourne in private chartered flights about 50 times, just to gamble at the casino. He had VIP treatment at Crown and stayed in its most expensive room, which reportedly cost AU$25,000 a night. The room, number 3918, had a villa-style décor and private butler service. Chia was a valued patron at the casino’s Mahogany Room reserved for VIP customers. He was apparently preparing to fly to Melbourne from Seletar Airport when he was arrested on 2 September 2003. The idea of him as someone who gambled and had a high-spending lifestyle was in complete contrast to his image as a family man and professional to those who knew him.

Chia Sentenced

The 46 charges against Chia comprised 14 counts of forgery, 18 of cheating, four of criminal breach of trust involving $53 million, two of money laundering and

Chapter 5: Brewery Scandal

eight of abetting his girlfriend to use a forged passport. He was expected to plead guilty when his case was heard in the High Court. On 2 April 2004, Chia was sentenced to 42 years in jail, the longest jail term ever given for a commercial crime. High Court Judge Tay Yong Kwang delivered the sentencing—coincidentally the same judge who sent SIA employee Teo Cheng Kiat to 24 years in jail, which was the previous record. Chia pleaded guilty to six charges of forgery and eight charges of cheating, and another 32 charges were considered during the sentencing. Justice Tay said that the fact that Chia had been scheming for four years before anything was detected “must surely attest to the correctness of the prosecution’s assertion that this was the work of a criminal genius”. Chia’s mitigation plea stated that the banks had approached him, offering to lend him the cash and this made it ‘too easy’ for him to commit the crimes. However, the judge dismissed this, saying: “Bankers knocking on his door were there to meet the man... to forge a business relationship, but the man they met was unfortunately in the business of forgery.” While Chia’s wife and two teenage sons were not in court for the sentencing, lawyers for the four banks who had filed suits against APB were present.

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Chia’s sons had written to the court pleading for leniency for their father. When portions of the letter from the two boys—aged 15 and 17 at the time—were read out in court by his lawyer, Chia began sobbing quietly and dabbed his nose and cheek with the sleeve of his shirt as he sat in the dock. “We understand that he has committed a wrongdoing and must be punished for his mistake. However, we plead on the grounds that aside from the moment of folly, he has been a very caring and loving father to the both of us.” They also said that Chia was a family-oriented man and had apologised for hurting his family. “It pains us very much and we know it pains him as well, for when we look at his face across the cold, hard glass panel, we can clearly see the repentance and regret in his eyes. When he talks of the future, he keeps telling us that he can only play the role of a shining beacon that watches over us from a distance and bids us to listen to our mother in order to grow up with integrity, which he sadly lacked.” The note also said that Chia had told the boys that even though he was about to go to jail, “the peace of mind that he has achieved is far more than all the money in the world can buy”. Justice Tay admitted that he was touched by the letter. “The accused may have lost everything else, but he

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still has the immeasurably valuable gift of love from his two sons,” he said. “Their young hands pen words that only mature mouths speak.” He also had a few words for the two teenagers: “Indeed, you should continue loving your father as his guilt is confined to the charges and none of them accuses him of being a bad dad. The court’s decision will probably disappoint you, but that is not because the court does not believe you.”

The Man Behind The Crime

When Chia was arrested by the CAD in September 2003, those who worked with him were shocked by the allegations against him. A co-worker who did not want to be named told The Straits Times that he was ‘unremarkable’. His colleagues in APB described him as a quiet manager who was nondescript and got along with people. They often ribbed him about not being able to hold his drink, despite the company he worked for. Chia lived in St Francis Lodge condominium off Serangoon Road with his teacher wife and two sons. He also owned a condominium in the Grange Road area. Chia was an accountancy graduate from the National University of Singapore who started work with the

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accounting and consultancy firm Arthur Anderson. He later became an assistant vice-president at United Overseas Bank, a mergers and acquisition manager at Jack ChiaMPH and a financial controller at Swire Pacific Offshore Services. He joined APB as a finance manager in January 1999 and was likely to have drawn a salary of between $200,000 and $300,000 a year. Chia’s gambling habits stretched back to at least 1994 but things took a turn for the worse the following year and he ended up owing a few banks about $100,000. Things started to get better in 1997 when he gambled on Star Cruise ships almost every fortnight. He won almost $1 million and was even offered a credit line of $75,000. But things took a dip again in August 1998 when he went on a gambling spree that lasted a fortnight, and lost all his previous winnings and accumulated new debts. It was later reported that Chia had already accumulated gambling debts of more than $1 million when he joined APB. Casino operators and other creditors had been giving him sleepless nights and he began to plan to fraudulently obtain credit facilities just a few days after joining the brewery. While scheming, Chia practiced forging the signatures of the various APB directors from annual reports and internal documents. Chia then withdrew money from SMBC, Mizuho and HVB and transferred them into the SEB account, before

Chapter 5: Brewery Scandal

siphoning the money into his two personal accounts with DBS, and later making a remittance to casinos in Australia, Hong Kong, the UK, Malaysia, Cambodia and the Philippines. He was also clever enough to roll over the funds and make timely deposits into each account to create the impression that he was a credit-worthy customer. He even managed to withdraw $53 million from an APB account with OCBC in November 1999 and replace the full amount by October 2002 without anyone noticing. As Chia got more confident in his fraudulent dealings, his gambling stakes also increased. He was known to have placed single bets of AU$20,000 in Australian casinos and even played for AU$400,000 a hand at Melbourne’s Crown Casino. Because of his reputation as a high-roller, he was provided with private jets to fly to casinos in Australia and London, and was invited by many casinos to visit them. He was also known for his lavish lifestyle and generosity back home—he bought a $150,000 Mercedes-Benz and a $530,000 apartment in Singapore and gave away more than $300,000 in both cash and gifts to various people, including his girlfriend.

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Good Luck Charm

As Chia’s case became headline news, he was revealed to have a girlfriend, Chinese national Li Jin. She first appeared in court on 12 December 2003 to face eight charges of using a forged Taiwan passport to enter and leave Singapore between 12 November 2002 and 9 January 2003. Chia was charged with helping her commit these offences. Chia met Li when she was the croupier in the VVIP (Very Very Important Person) room at the casino on board the cruise ship Megastar Aries. The first time he met Li at the gambling table, he won $1 million from her. Whenever Chia went back on the ship to gamble, he asked for her and described her as his ‘good luck charm’. This was certainly the truth as whenever he played against her, he won. In fact, he won against her so often that she was eventually transferred to another vessel. Chia kept in touch with her, even though he continued to play on Megastar Aries. “He would call me several times a day, even at midnight,” she told The Straits Times. “When my mobile phone was off, he would get me at home to make sure I stayed at home. He told me he did this because he was a sensitive man.” When Li resigned from her job in mid 2002, Chia met her in Shanghai and the two began a relationship. During her time with Chia, he hardly lost when he gambled. Once, when they were in London, he let her visit Paris

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with a friend. He lost at the casino that day and claimed that it was because she wasn’t there with him. “After just one day, he called and asked me to come back immediately. He would not let me stay a day longer in Paris,” Li claimed.

Li was originally from Jiangsu province in China. She had a valid China passport and used it to travel to Singapore and Australia with Chia. Chia later set up an IT firm and applied for an employment pass for her through the company. While waiting for the employment pass to be approved, Chia paid $10,000 for a forged passport bearing Li’s photograph but a falsified name, to make it easier for her to visit him in Singapore. On 11 March 2004, District Judge Jasvender Kaur sentenced Li to six months in jail for possessing and using a forged passport. The sentence was backdated to when she was remanded on 12 December 2003. During his plea for leniency, Li’s lawyer Edmond Pereira stressed that there was no evidence that Li knew about Chia’s allegedly criminal activities. He noted that Li used her own money to gamble and kept their winnings separate whenever she went to casinos in Australia and Malaysia with Chia. While Chia played in the casinos’ private rooms,

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Li gambled as an ordinary patron. Although she credited her winnings to Chia’s accounts, he would transfer the money to her when it increased to a ‘sizeable’ amount. Since the case came to light, Li surrendered $1.6 million from her accounts in DBS and Bank of Melbourne, as well as branded goods and jewellery that Chia had given her as gifts. Following Li’s release from prison on 13 April 2004 and subsequent deportation back to China, her lawyers applied for a social visit pass but the application was rejected. The application was lodged as there was a possibility that she would be called as a witness for a court hearing to decide how to distribute the money and assets recovered from her and Chia. Although she had surrendered the $1.6 million in her two bank accounts, she had always insisted that $1.3 million of this sum belonged to her. In December 2005, Li was reported to be working as a front desk assistant manager at a hotel in Zhenjiang in her native Jiangsu province, and living with her parents in a grey, grimy block of flats. It was a far cry from her oneyear stint as Chia’s companion, when she accompanied him to casinos around the world, received expensive gifts and lived in a private apartment that he owned in posh Grange Road in Singapore. Li claimed that she had no idea that he was a fraudster, and that she didn’t know at first that he was a married man.

Chapter 5: Brewery Scandal

“When we first started he told me he was separated, but a few months later he told me he had a family. I was very angry.” But despite this shocking news, she still continued with the relationship. When she was deported from Singapore, Li left on a first-class ticket to Shanghai on Singapore Airlines, leading to speculation that she had other funds stashed away. However, in an interview with The Straits Times published on 12 December 2005, she said that those rumours were false and that the ticket was actually an unused portion that was booked a year earlier, when she had changed plans to travel between Shanghai and Singapore. She also said that she wished she had opened a bank account in China as she was left with nothing. She revealed that she was in touch with Chia in prison and that they wrote to each other regularly. Despite the crimes that Chia committed, Li still seemed to have a soft spot for him and was looking forward to when she could see him again—although he is only due for release in 2046.

Casinos & Banks Take Action

Chia’s sentencing, while welcomed by everyone involved, was not the happy ending they had been waiting for. The ensuing saga lasted for a decade as a host of casinos and

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banks that Chia encountered on his scheming path took legal action against the other parties involved. Aspinalls Club, a private London gambling club, was the first to do so, filing a multi-million-dollar suit against Australia’s Westpac Bank in July 2004. The casino asked that the New South Wales Supreme Court force the bank to honour two cheques totalling £2.63 million that Chia wrote to pay for gaming chips purchased on two occasions in August 2003. Just two weeks after the cheques were written, Chia was arrested and his Westpac account was frozen, ensuring that the casino did not receive any money. Aspinalls claimed that Westpac had delayed payment needlessly. In September 2004, German bank Bayerische Hypound Vereinsbank AG (HVB) filed a claim against APB to recover US$30 million that it had given to the company via Chia. In the suit, Germany’s second-largest bank claimed that the brewery did not do enough to supervise Chia, which then allowed him to defraud the various banks over a period of four years. It argued that had APB taken the trouble to delve into Chia’s background, they would have discovered that he had already racked up $1 million in gambling debts when he was hired. HVB also noted that if the brewery had better controls and standards of supervision, it would have been able to detect Chia’s fraudulent acts.

Chapter 5: Brewery Scandal

Within days of HVB’s claim, the three other banks that Chia had scammed filed their own suits. Skandinaviska Enskilda Banken (SEB) and Mizuho Corporate Bank filed for a total of US$33 million, followed by the Sumitomo Mitsui Banking Corporation (SMBC) for $10 million. (All the banks sued for the full amounts that they had loaned to Chia, plus interest and costs.) To show negligence on APB’s part, the banks requested for access to the findings of an internal investigation undertaken by the brewery. This was rejected by Justice Belinda Ang in 2006, and again by the Court of Appeal in February 2007. The civil battle began in court on 1 October 2007, but by 9 October, two of the banks were out of the picture. Justice Ang allowed Mizuho Corporate Bank to withdraw its claim and dismissed Sumitomo Mitsui Banking Corporation’s suit. Both banks were ordered to pay costs against APB. The remaining two banks’ cases were heard over 47 days between October 2007 and June 2008. HVB and SEB’s claims were eventually dismissed and they too were ordered to pay for APB’s legal costs. In her 226-page judgement released on 1 September 2008, Justice Ang noted that the banks had ignored their own banking procedures and failed to notice discrepancies or irregularities in the documents that were “staring bank

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officers in the face”. They had willingly given out loans of millions of dollars without verifying that Chia was authorised to act for the company as its finance manager. Despite an appeal in May 2011, the Court of Appeal upheld the High Court’s decision to reject the banks’ claims. While the court acknowledged that APB was careless in its “lax supervision of Chia’s activities”, the banks were more negligent in the way they readily lent the money without complying with their own internal controls and due diligence measures. “The appellants practically allowed Chia to defraud them in their eagerness to do business with Chia,” said the court in its 99-page written judgement.

Chia’s Assets Seized & Divided

In March 2012, a High Court judgement order was issued, entitling HVB to seize assets worth $30 million from Chia. Following this order, Chia was barred from disposing of or reducing any assets until the judgement was satisfied. The order also entitled the bank to seize two properties owned by Chia, which were worth about $2.5 million in total. Chia’s wife, Madam Mok Chuay Fun, contested the claim for her share of the money that went into the purchase of the properties.

Chapter 5: Brewery Scandal

A disposal inquiry was later held to decide how the assets should be divided between the four banks and other claimants. On 7 August 2012, the 10-year saga finally ended with a court settlement. Lawyer Edmond Pereira, who represented Chia, Madam Mok and Ms Li, said, “The matter has been settled amicably and the terms are confidential.”

Taming the Casino Dragon While serving his sentence, Chia wrote a 13-page article on the dangers versus the desirability of a casino. The piece was titled ‘Taming The Casino Dragon’ and was released to the media in April 2005 by the Ministry of Home Affairs. His lawyer, Pereira, told The Straits Times that Chia wanted to share his gambling experiences as a form of repentance and to encourage others not to follow in his footsteps. Chia sought permission to write the article and was allowed to use a computer at the prison office for a few hours each day. It was handed to the Prisons Department in January 2005. In his article, Chia suggested that the government protect Singaporean novice gamblers with a $10,000 entrance fee, restrict its opening hours and betting limits, as well as put a

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ban on credit. But the opposite should apply for foreigners, who should instead be pampered to punt. The following is an excerpt on how Chia picked up the habit and how he turned into the big-time gambler that he was at the time of his arrest: “I started gambling in casinos in 1994. It started off innocuously enough. I was simply passing time on board a cruise ship on a lazy afternoon. By pure chance, I walked into its only casino; to be accosted by alluringly colourful lights, attractive croupiers and the magical promise of easy money. That casino targeted the mass market and the overall stakes were relatively low. Nevertheless, the experience was exhilarating for one so new to it. Like an inexperienced teenager succumbing to the lure of a newly discovered vice, I was soon hooked. Whether by coincidence or by good fortune I could never tell, but I was then a consistent winner. As the stake of my bets increased in proportion to the frequency of my trips to the casinos, so did my bank balance. Just when I was wallowing in the glamour and triumph of my newfound wealth, tragedy struck. In one night alone, I lost three-quarters of the $1 million which I had painstakingly accumulated over the past four years. I completely lost my footing. That, unfortunately, was also the turning point. As I tried in vain to recover my winnings, I made even greater losses. At about this time, the unsavoury side of

Chapter 5: Brewery Scandal

casino gambling began to rear its ugly head. The casinos and junket operators began to harass me for debts owed. I soon became desperate. On many occasions, I was suicidal. When the depression was overpowering late one night, I made a goodbye tape in the event... As I struggled under a mountain of debt, my thoughts centred only on how to repay the money and how to win it all back. I began to take outrageous risks. Against my better judgement, I falsified bank documents in order to obtain funds. I reasoned to myself that the ‘borrowing’ was only temporary and I would return every cent from my eventual winnings. Alas, it was not to be. The more I ‘borrowed’, the more I lost. By this time, I was already quite familiar with the workings and the mechanics of casino gambling. I did my calculations. In order to have a chance in recouping my enormous losses, I had to seek out bigger bets. So I started to travel to the most exclusive casinos in Australia and London where the biggest bets in the world are placed. Soon, I was placing S$1 million bet a hand and winning or losing $10 million or more on every trip. At the point when I was arrested, I was purportedly the second biggest casino gambler in the world.”

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Stealing on the Job

Stealing on the Job

Chapter 6:

Matthew Yeo Kay Keng

M1 employee Matthew Yeo Kay Keng stole over 3,000 high-end smartphones from the company in three years. He then used his illegal earnings—valued at $2 million in total—to buy luxury items such as sports cars and designer watches. An account manager who dealt with corporate clients, Yeo created fake sales orders for subscription contracts for mobile services purportedly made by his customers. These contracts entitled them to free or subsidised handsets. Yeo paid for the subsidised ones and indicated that he would personally deliver the handsets instead of using a courier. Once he got his hands on the handsets, he would leave the office on the pretext of delivering them to the customer, but instead went to resellers to sell them off. In order to prevent his scam from being detected, Yeo disposed of the contracts before they could be activated. In some cases, he simply altered the contracts to ensure that they would either be rejected or returned to him for

Chapter 6: Stealing on the Job

rectification, after which he would not follow up on them. His scam was discovered in November 2010 during an internal reorganisation, when a performance audit found a discrepancy between the amount he was supposed to have made for M1 and what the company was really taking in. Yeo had reportedly gone on a $10,000 holiday to Japan and, when he returned to work on 15 November, he was asked to explain the difference in numbers. Yeo confessed to taking the handsets and gave details as to what he spent the money on. Yeo’s extravagant lifestyle consisted of a Porsche, which he bought for almost $245,000 in June 2010—and traded in for another Porsche a few months later for a further $207,284. He also bought watches from luxury brands such as Audemars Piguet and Patek Philippe, which cost up to $50,000 each. Interestingly, he also invested $300,000 in a Hollywood science fiction movie project, Metalgraves. Yeo was also a fan of ornamental fish and allegedly paid $200,000 for a stingray and $160,000 for an arowana. The next day, M1 applied for a court order to freeze all of Yeo’s assets, which were valued at almost $1 million. Yeo, who is married with two children, also owned a condominium and an undeclared bank account, which were also frozen. On 7 October 2011, Yeo pleaded guilty to two counts of criminal breach of trust and seven charges of money

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laundering. Deputy Public Prosecutor Seow Zhixiang said, “Matthew acted out of a desire to live a luxurious lifestyle which he could not afford on the salary he drew from M1.” Yeo was sentenced on 28 October to five years in prison. When passing the sentence, District Judge Eddy Tham noted that cash and valuables amounting to almost $1 million had been recovered by the Commercial Affairs Department. But he also said that a lengthy sentence was more appropriate for Yeo as he had acted in a calculated manner to misappropriate the handsets over the years.

Peter Lee Yoke Leong

Peter Lee Yoke Leong was a treasurer of the PAP’s Aljunied-Kembangan branch and had once counted MPs and other public leaders as his close friends. But on 2 February 2007, he wrote a cheque for $50,000 from the branch’s bank account and cashed it, then used the money for his personal expenses. Over the course of five months in 2007, Lee embezzled a total of $78,461. Officials had noticed a $70,000 discrepancy in the branch’s books sometime in 2007 but it was only in August 2008 that a PAP official filed a police report. The father of two had been a volunteer at the

Chapter 6: Stealing on the Job

PAP branch for more than six years and helped out at community functions and projects. In March 2007, he lost his $18,000-a-month job with Nittan Capital, a money-broking firm. His lawyer, Noor Mohamed Marican, argued for a fine instead of a jail term and said that Lee had resigned from all his posts to avoid causing further embarrassment to grassroots leaders and members. He had also been shunned by former colleagues and friends, had emotional breakdowns and become depressed. Lee had repaid the money and was working as a taxi driver at the time of his trial. But Deputy Public Prosecutor April Phang said that Lee only confessed when evidence against him was overwhelming and therefore drew out the police investigations. She also argued that, following precedent, a jail term was necessary as other white-collar criminals guilty of embezzlement had been put behind bars for lesser sums. Before his sentence was passed, his lawyer submitted letters of support from Members of Parliament and grassroots leaders. Among them was Neo Tiam Boon, chairman of the Kampong Kembangan Community Club management committee, who said that Lee was a “model grassroots leader, one who is sincere and selfless”. Dr Ong Seh Hong, MP for Marine Parade GRC,

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described him as a “very active and dedicated volunteer” who had contributed a lot of time and effort into voluntary and community work. Despite the letters of support, District Judge Liew Thiam Leng said that Lee had violated the trust he had been given as treasurer of the branch. Lee was eventually sentenced to eight months in jail for embezzlement.

Ang Chiew Yan

After joining the Singapore Swimming Club (SSC) as an assistant accountant in 1998, Ang Chiew Yan became its assistant general manager eight years later. She was responsible for handling the club’s petty cash float and was also custodian of an SSC fund set aside for various activities during the financial year. Deputy Public Prosecutor Ng Der Lim said that Ang led an extravagant lifestyle and spent more than she earned. She ended up with huge credit card bills and also drew on the credit facilities of various banks. This led to her dipping into the club’s funds in order to repay her debts. She helped herself to almost $560,000. Ang was suspended from duty on 31 May 2006 on an unrelated matter, which cost her her job a month later. Her lawyer, N. Sreenivasan, pleaded for leniency and said that Ang had tried to return the money to the club

Chapter 6: Stealing on the Job

before her wrongdoings were discovered but could not do so as she was barred from the club’s premises following her suspension. “What she did was, instead of sitting pretty, she actually bought cashier’s orders and deposited these into the club’s account,” he said. In January 2009, Ang was sentenced to 40 months in jail. Three other charges were taken into consideration.

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Civil Servants Gone Wild

Civil Servants Gone Wild

Chapter 7:

In 2010, the biggest criminal case involving public servants conspiring to cheat the government came to light. The two men worked for the Singapore Land Authority (SLA) at the time and the total sum involved was a whopping $11.8 million. Koh Seah Wee, the deputy director in the SLA’s Technology and Infrastructure department, and Christopher Lim Chai Meng, a manager in the same department, did this over a two-year period by rendering false invoices through various businesses. The invoices were issued between January 2008 and March 2010 for IT maintenance goods and services that were never delivered, for payments ranging between $2,450 and $60,000. Most of the companies involved were sole proprietorships owned by Ho Yen Teck. Koh was charged with 249 counts of cheating. Lim helped the police with investigations, as did the owners of the various businesses that received the false invoices, including Ho.

Chapter 7: Civil Servants Gone Wild

The SLA and the Ministry of Law (MinLaw) issued a joint statement on 28 September 2010 noting that almost $10 million in cash and assets had been located and secured at that point. About $7.5 million was recovered from Koh and $1.4 million from Lim. The statement also revealed that the alleged wrongdoings only came to the SLA’s attention in June when Koh was replaced by another officer and the irregular payments were detected. “The two officers are suspected of conspiring with each other and the said business entities, thus enabling them to circumvent the checks and balances in the processes,” said a spokesperson. Both Koh and Lim previously worked in the Infocomm Development Authority of Singapore (IDA) and were posted to SLA—Lim in July 2006 and Koh in March 2007. Koh returned to the IDA in March 2010 but resigned in June. Lim left SLA in May and also returned to the IDA but was suspended from duty when the case came to light. The last big case involving public servants was when Choy Hon Tin was jailed 14 years in 1995 after receiving $13.85 million in bribes for giving privileged information to contractors. Choy was the former deputy CEO of national water agency PUB.

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Lavish Lifestyle

Details of Koh’s extravagant lifestyle soon emerged, allegedly funded by the misappropriated money. It turned out that he had spent millions on luxury cars, condominium units and shares—some of which he paid for in cash. These included: • August 2008: Unit trusts worth $150,000 and $50,000 in financial products • September 2008: Financial products worth $100,000 • Between 27 July & 24 August 2009: $900,000 for a fifth-floor unit at Axis@Siglap, which he paid in full • Between July & September 2009: A downpayment of $96,320 for an eighth-floor unit at Optima@Tanah Merah, which he registered in his wife’s name • 25 March 2010: $303,988 for a Mercedes-Benz E350 Coupe, paid in full • 30 March 2010: $140,888 for a Mercedes-Benz E200, also paid in full • April 2010: $1.55 million for a Lamborghini Murcielago (with ‘88’ as its licence plate number), paid in full • May 2010: Invested US$245,000 in AIG shares A friend of Koh’s, who spoke to the media on the condition of anonymity, said that Koh had bought the new Lamborghini after selling a Lamborghini Gallardo

Chapter 7: Civil Servants Gone Wild

back to the dealer. He also said that Koh was fond of high-end watches and had mentioned in the past that he attended luxury watch launches: “I remarked that he must be doing very well; he said his investments were flourishing.”

The Third Man

Out of the 10 companies that the false invoices were rendered to, seven of them were owned by one man—Ho Yen Teck. News soon emerged that Ho was a former swimming instructor who worked at the APS Swim School, founded by former national swimmer Ang Peng Siong. When interviewed by The Straits Times, Ms Wendy Lee-Ang, the school’s operations manager and Ang’s wife, revealed that Ho was a full-time coach from 2002 to 2008 and that he taught both adults and children. “He was a very good swimming teacher. He was good with children and was easy to work with.” Ms Lee-Ang also said that the parents of the children he coached frequently gave him compliments because he “always got the job done”. She added that when Ho decided to leave his job at the swim school, he mentioned that he wanted to explore other business options. His departure was amicable.

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Ho was charged with 195 counts of cheating the SLA of $9.8 million in total.

New Charges

In October 2010, Lim was charged with a further 27 counts of cheating, bringing the total number of charges against him to 264. Not much was known about Lim when his name was brought up in this case, except that he made the news on 19 December 2009 when he crashed his Ferrari into a tree along Nicoll Highway at around 7am. Although he only suffered cuts on his arms and forehead, his car was a tangled wreck. Court documents showed that Lim used his wrongful earnings to buy two properties, five cars (including a Ferrari and Porche), three watches and unit trusts. He also transferred sums of $20,000 to $347,670 into bank accounts—mostly fixed deposits—on six occasions. He was also alleged to have hidden $32,322 with his wife’s nephew for safekeeping in June 2010, and deposited a total of $279,750 into the accounts of his children, his wife and his mother-in-law. Both Koh and Lim received an additional 45 charges in November 2010, bringing the total number of charges to 294 for Koh and 305 for Lim. The alleged amount of money involved was also increased to $12.1 million.

Chapter 7: Civil Servants Gone Wild

The new charges involved their alleged dealings with Ribbons and Rolls Marketing Services (R&R), a company that provides IT supplies and networking solutions for corporate clients. Koh and Lim were accused of conspiring with R&R director Anthony Xavier Foo Doon Tong to deceive the SLA into thinking that their department required products and services from R&R, although these transactions did not result in any sort of work or products. The two men were also charged with concealing and converting the proceeds of their wrongdoing by purchasing cars, properties and unit trusts. SLA is said to have paid a total of $297,000 to R&R between November 2007 and September 2009.

As the investigations into the case deepened, five additional people were charged with cheating. Tan Peng Chong, the owner of Advent Enterprise, allegedly cheated the SLA of a total sum of $153,000 in 2008, as he failed to deliver computer services that were billed by his firm. Three other men from TPL Communication—Tan Meng Teck, Png Teck Soon and Seah Hwee Thong—were accused of the same offence, involving amounts ranging from $266,000 to $388,000. Anthony Xavier Foo Doon

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Tong, the director of R&R, was charged with 45 counts of cheating that amounted to $297,000. As more background checks ensued, it was revealed that Koh had already started cheating earlier in his career. After joining the IDA in 1997, he was posted to various agencies over the next 11 years. He was first seconded to the Supreme Court from 1997 to 2004, then to the Intellectual Property Office of Singapore (IPOS), a statutory board under the Ministry of Law, from 2004 to 2007. Next, he went to the SLA from 2007 to March 2010, before returning to the IDA in April, only to resign the following month. The eight new charges in November 2010 alleged that he tricked IPOS into paying $286,000 to a computer company, Chartered Systems & Services (CSS), for goods and services that were never delivered. At the time, he was assistant director in the IPOS Information Technology department. These new charges brought the total against Koh to 302. The police also started to investigate his stint at the Supreme Court.

History Repeats Itself

On 30 December 2010, Koh was charged with 70 further counts of cheating, most of them committed when he

Chapter 7: Civil Servants Gone Wild

was working at the Supreme Court as an IT consultant to the court’s Computer Information Systems Department from February 1997 to July 2004. Most of the charges—63 of them—were for helping two firms (Teamware Systems and Solutions and Professional Business Solutions) land IT equipment supply, maintenance and installation contracts without declaring that he was involved in managing them. The remainder of the charges were for similar offences while he was seconded to IPOS. Koh now had a total of 372 charges of cheating against him in his time at three statutory boards—SLA, IPOS and the Supreme Court. In light of these new charges, the prosecution applied for the case against Koh and Lim to be moved to the High Court, as it has the power to deliver stiffer sentences than the Subordinate Court.

The First Hearings Begin

Ho was the first of the eight men charged in the case to be taken to court. On 15 December 2010, he pleaded guilty to 21 charges of plotting with Koh and Lim to cheat the SLA between January 2008 and March 2010. Specifics about the illegal transactions soon emerged. Koh and Lim had arranged for their own ‘vendors’ to submit the lowest quotes to win the SLA contracts. At the

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end of 2007, Koh roped in Ho, who was his swimming instructor, to set up sole proprietorships and then bid for IT projects from SLA. Between December 2007 and November 2009, Ho set up seven companies, each of which received between $740,618 and $1.9 million from SLA. Once he was paid, he withdrew specified sums for Koh while he pocketed the remainder—a total of about $200,000—as his share of the deal. In most cases, Lim had logged into the government procurement portal, GeBiz, to enter bids for the ‘vendors’. Because he knew what the other vendors had bid, he was able to ensure that his own ‘vendors’ quoted the lowest amount. During that period, the statutory board paid $12.2 million to 11 vendors for 237 contracts. Ho was sentenced to 10 years in prison in January 2011. After Ho, the next person to be charged was Anthony Xavier Foo Doon Tong, who was given three years in jail for scheming with Koh and Lim. Foo admitted to 10 charges of abetment to cheat, with the remaining 35 taken into consideration. Foo had been roped into the scheme in October 2007 as a ‘vendor’ and won four IT projects between November and December 2007, and again from April to August 2009. He won contracts worth $297,000, and his share of the money was $94,500.

Chapter 7: Civil Servants Gone Wild

Koh & Lim’s Case Goes To Court

On 15 September 2011, Koh and Lim appeared before a magistrate’s court for a preliminary inquiry. Koh admitted to 55 of the 372 charges against him, while Lim pleaded guilty to 49 of the 309. The duo was sentenced on 4 November—Koh to 22 years in jail and Lim to a 15-year stint in prison. Being the senior officer of the two, Koh was given the higher sentence as he was deemed more culpable. But this didn’t distract from the fact that Lim needed to play his part in order for the scam to work. In his judgement, Justice Tay Yong Kwang said, “They were the safety checks put in place to administer the technology infrastructure and to prevent financial leakage, but they transformed themselves into surreptitious sluices letting out torrents of public funds illegally.” The judge also did not agree with the prosecution’s description of the duo as “highly sophisticated criminals” capable of “systematic and elaborate laundering of criminal proceeds”. “Their rather egoistic acts in purchasing supercars, especially the attention-grabbing Lamborghini and Ferrari in our small island indicated inane vanity rather than sophistication,” said Justice Tay. “They were carelessly inviting questions about their new-found wealth, particularly for Lim, whose recent

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financial woes must have been known to those who knew him.” (It was revealed during the course of the trial that Lim had family predicaments when the crimes were committed.) The judge also pointed out that Lim had helped Koh to cheat SLA of over $3 million in more than 50 false transactions within the month of March itself—an average of more than two a day. Even though both Koh and Lim were considered first-time offenders, the judge made a clear distinction between those who commit offences for the first time and those who carry on doing so until they are finally caught. “First offenders in the position of Koh and Lim do not deserve the kind of sympathy reserved for those who transgress for the first time on an isolated occasion and often out of line with their general character. A clear distinction has to be drawn between those who break the law for the first time and those who have been flouting the law with impunity for years and are finally charged for the first time.” Justice Tay’s judgement sent a clear message that fraud would not be tolerated, particularly when it is committed from within an organisation, and especially when public funds are involved.

Chapter 7: Civil Servants Gone Wild

Letters From The Family

Before the sentence was passed, Lim’s family had written letters to the court pleading for leniency. But on instructions from Lim, nobody from his family turned up for the hearing so as to avoid the media glare surrounding the case. His father, mother, wife, seven-year-old daughter and 14-year-old stepdaughter had written letters to the court painting Lim as a caring family man. Lim had been supporting all of them, in addition to his 12-year-old autistic stepson and three-year-old son. “My family condemned his crime but not him,” wrote his wife, Tina Gow Poh Choo. She also described her husband as the disciplinarian at home. His stepdaughter’s letter said, “He always tells me not to do anything against the law... It was the first time I saw him cry in front of me when he told me what he had done. I was very disappointed yet I respected him for admitting his mistake.” His seven-year-old daughter said he always bought books and toys for her and her siblings, while his father mentioned his obsession for cars. “His weakness is the love for cars,” he wrote. “So in a moment of folly and overcome by greed, he treaded on the wrong path.”

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Other Men Sentenced

The fifth man involved in the cheating scandal was sentenced to 18 months behind bars on 11 April 2012. Tan Meng Teck admitted to three charges of plotting with four others to cheat the SLA into approving three payments of over $50,000 to mobile equipment firm TPL Communication. On 22 May 2012, Seah Hwee Thong was jailed for 18 months after pleading guilty to two counts of conspiring to cheat the SLA into approving two payments of $59,000 to TPL Communication. He also admitted to ‘perverting the course of justice’ by creating false evidence to mislead the CAD. Nine other charges were taken into consideration. Although the prosecution was unable to identify how much Seah benefitted financially from the crimes, he returned $15,000 he claimed to have received. The remaining two men involved in the scam— Png Teck Soon and Tan Peng Chong—had all charges withdrawn against them in February 2012. The AttorneyGeneral’s Chambers let them off with a stern warning.

Chapter 7: Civil Servants Gone Wild

Luxury Cars Koh’s luxury cars demanded newspaper headlines of their own during the course of his case. In September 2010, two of his three luxury cars were put on sale at Republic Auto, Singapore’s largest used car dealer. A Mercedes-Benz E350 Coupe, which was less than a year old, was sold within a few days for around $260,000. According to a charge sheet, Koh purchased it for $303,988 in March that same year. His limited-edition Lamborghini Murcielago LP670-4 SV, one of only 350 produced, was still in the showroom. It had an asking price of $1.39 million although Koh had paid $1.55 million for it a few months ago. Both cars were registered under the name of his wife, Yeing Nyok Sea. His third car, a Mercedes-Benz E200 sedan, had yet to be located. Koh’s cars were seized under the Confiscation of Benefits Act, which allows the police to seize items believed to have been bought with ill-gotten gains. Although these assets can usually only be seized after a person is convicted and after a disposal inquiry, the prosecution and the defence agreed in this case for the cars to be put up for sale first as they were considered to be depreciating assets. In November 2010, Koh’s Lamborghini Murcielago had its selling price of $1.39 million lowered to $1.36 million, before

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finally being sold for $1.05 million in May 2011. Sources revealed that Koh also owned a few other less conspicuous Japanese cars. Lim’s Ferrari also incited some media interest, although it was more low key. Lim had crashed the $721,000 F430 on Nicoll Highway in December 2009 and, although Lim wasn’t seriously injured, the car was so severely damaged that it had to be sold as scrap for $10,838.

Dead Man Walking

Dead Man Walking

Chapter 8:

While every family has its own share of drama, some are much more tangled and complicated than others—to the extent of involving a faked death and insurance payout. This particular saga began in 1987 when S. Gandaruban fled to Sri Lanka in an attempt to escape his creditors after incurring huge debts when his car rental business collapsed. His death certificate was sent to Singapore the following year by relatives in Sri Lanka, which claimed that he was killed in a gunfight between government troops and Tamil Tiger rebels. The insurance payout was deposited in a joint account in the names of his wife, Renuga Devi Sinnaduray, and his brother, S. Moganaruban. The case first came to light at the end of January 2004 when Renuga was charged in court. Moganaruban declared publicly that he was ‘shocked’ when he found out his brother was alive, and denied pocketing any of the insurance payout or conspiring to cheat the insurance companies. He was named by prosecutors as allegedly

Chapter 8: Dead Man Walking

conspiring with his brother, Gandaruban, and his sisterin-law, Renuga, to trick three insurance companies into paying out a total sum of over $330,000 by faking Gandaruban’s death. The claims were made to the then Insurance Corporation of Singapore, NTUC Income and Asia Life Insurance Society. He was also charged with instigating Renuga to lie to a Commissioner of Oaths about her husband’s death. Police had gathered evidence that Gandaruban was still alive when DNA samples of Renuga’s youngest son, who was born in 1996, matched those of his three siblings, who were all fathered by Gandaruban.

The trial started on 25 October 2004. Renuga, 46, had pleaded guilty in May to her role in the scam and was serving a one-year jail term at the time. She was the first witness to take the stand and declared Moganaruban to be the one who orchestrated all the events following her husband’s fake death. She claimed that Moganaruban brought the documents to certify Gandaruban’s death and the insurance claims to her flat and made her sign them. Moganaruban also allegedly brought her to a Commissioner of Oaths to swear that her husband was dead. She also claimed that once all

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the cheques were ready, Moganaruban drove her around to pick them up. But she pleaded innocence when it came to the fate of the payout: “What happened to all the money, I really don’t know. It was all given to Moganaruban.” Renuga also alleged that Moganaruban frequently drove her and her children to Johor Bahru where her husband was staying before the insurance payouts were received, and that Moganaruban also arranged and paid for her trip to Sri Lanka in 1993. Moganaruban had a good position in society and was a prominent businessman and Ceylon Tamil community leader. He was the executive chairman of Telecoms Credit Cooperative (TTC) Ltd, a thrift and loan society, as well as the vice-president of the Ceylon Sports Club and chairman of a Hindu temple. He had also received a Public Service Medal in 1998. Moganaruban’s lawyer, Subhas Anandan, tried to portray Renuga as an untruthful witness in his crossexamination. He accused that she knew exactly what she was doing, despite her claims that she had signed all the documents without reading them. She responded by saying that she was not keen to take part in the scam but relented after she was threatened and as she was “thinking of my young children”. Renuga also alleged that her husband told her that she “might as well

Chapter 8: Dead Man Walking

become a prostitute” when she had refused to help and that he had threatened to harm her if his brother ended up in any kind of trouble because of her. But she also admitted that she did not know if Moganaruban was aware that his brother wasn’t actually dead. When the trial continued the next day, Anandan accused Renuga of giving false testimony against Moganaruban. He claimed that his client was being framed by his sister-in-law because of “animosity and hatred” she bore towards him for taking her children from her. Before she was sentenced to her jail term in May, Renuga’s three older children lived with Moganaruban while she lived with her youngest son. Anandan also claimed that Renuga was angry that her husband had a mistress in Sri Lanka with whom he fathered a daughter, and thus wanted to implicate Moganaruban to “take revenge on your husband by trying to punish his brother”. He added that her testimony portraying herself as a puppet whose strings were pulled by Moganaruban was untrue. While Renuga denied these allegations, the lawyer accused her of striking a deal with the prosecution to testify against Moganaruban in exchange for proceeding with only one charge against her.

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The Plot Thickens

The proceedings on 26 October also saw the prosecution’s second witness take to the stand. Mr Lim Teck Ser ran a car repair workshop and was a business associate of Gandaruban. Lim admitted to meeting Gandaruban in Johor Bahru in 1989 and in Sri Lanka in 2001 but claimed that he did not know that he was certified dead. In 2002, Lim chanced upon Gandaruban’s death certificate in Moganaruban’s car when he took his car to his workshop for repairs, but the accused ‘just smiled’ when asked if his brother was dead and Lim didn’t probe further. In a strange turn of events, district judge Kow Keng Siong allowed Deputy Public Prosecutor Hui Choon Kuen to cross-examine his own witness as his testimony in court seemed to differ from his police statements. The prosecutors turned against their own witness the next day and accused him of lying in court to protect his ‘good friend’, Moganaruban. Lim was then declared a ‘hostile witness’. The DPP highlighted at least 10 inconsistencies between Lim’s statement to the police in May and his testimony in court. Two of the main inconsistencies involved when Lim knew about Gandaruban’s death certificate and whether he had seen the two brothers together in Sri Lanka. Lim said in court that he had only seen Gandaruban’s death certificate in Moganaruban’s car in 2002, but in

Chapter 8: Dead Man Walking

his police statement, he stated that he was informed by Moganaruban in 1988 or 1989 that Gandaruban had obtained a fake death certificate so as to stop creditors from harassing his family. DPP Hui also noted that Lim had testified that he had never seen the two brothers together, but said in his statement that he had drinks with both of them in Sri Lanka. After being questioned, Lim admitted that he had made several mistakes in his police statement because he had been “thinking of other things” when he was speaking to the police. He blamed the immense pressure he was facing from his creditors and the fact that his father had been diagnosed with cancer. “My heart and brain were numb at that time. I wasn’t taking anything seriously,” he said. But when it was pointed out to him that he had spotted some spelling mistakes in his statement, he replied, “When I read, I cannot get anything into my brain. But spelling mistakes, I can spot by eyesight [sic].” During the following day’s hearing, a Commercial Affairs Department (CAD) officer testified that Lim seemed in control of himself and was given plenty of time to provide an accurate statement when he was called in by the police in May. He was even allowed to return to the station the next day to “fill in the blanks” for parts of the statement that he had been unsure of.

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The prosecution sought to convince the judge to place more weight on Lim’s police statement as it contained information that implicated Moganaruban. Lim had said that Moganaruban told him in 1988 or 1989 that Gandaruban had obtained a fake death certificate to deter his creditors, which was proof that Moganaruban knew from the start that his brother wasn’t dead.

The Accused Takes To The Stand

On 1 November 2004, Moganaruban took to the stand. He denied all accusations that he knew that his brother wasn’t really dead and told the court that there was bad blood between him and his sister-in-law, suggesting that Renuga might have had ulterior motives for putting the blame on him. He added that she couldn’t get along with his family and that her own husband could not stand her. “My brother blames our mother for arranging the marriage with her, and he always said it would have been much better if he had remained a bachelor.” He also denied Renuga’s allegation that he had driven her and her children to Malaysia, where she claimed her husband was living. When the trial continued later in the month, Moganaruban revealed that he had thought that his

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brother had died in Sri Lanka in October 1987 and only found out much later that he was still alive. He didn’t tell his relatives about his brother’s death at first as he considered it taboo. His sister was getting married the following July and, according to Hindu custom, at least a year would have to pass before the wedding could take place. When DPP Hui Choon Kuen asked why he didn’t then break the news to his family after the wedding, Moganaruban replied, “The relatives are going to mock us forever and ask what type of family we are.” The DPP also asked him whether there were any attempts to bring Gandaruban’s body back to Singapore, but Moganaruban replied that guerilla warfare in the Sri Lankan village where his brother supposedly was made it hard for anyone to get there. He was also asked if he had tried to track down the informant listed on the death certificate, who was identified as a brother-in-law. Moganaruban said that he had asked his mother about him, but she had no idea who he was. The DPP then suggested that Moganaruban had not asked his sister-in-law about the identity of the informant as he knew the death certificate was fake, but the accused disagreed.

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Daughter vs Mother

When the trial continued a few days later, the defence closed its case after Moganaruban’s niece—the daughter of Gandaruban and Renuga—criticised her own mother in her testimony. When Gandaruban Ganda Ruby took to the stand, she testified that her mother was a liar and a bad parent. The 22-year-old said that Renuga caned her children, used vulgar language on them and often played “loud music in the house”. In reference to newspaper reports that described Renuga as a devoted mother, Ruby commented, “I’m here to tell you that she’s lying.” However, the tables were turned when DPP Paul Chia accused Ruby of lying because of the inconsistencies between her police statement the year before and her court testimony. Ruby had said in court that she had found out in 1993 that her father was still alive, but when interviewed by the police in 2003, she said her father was dead. The second inconsistency involved a photo of herself and Gandaruban. When shown the photo at the police interview, she said that he was a relative, but identified him as her father when she was shown it in court. Ruby explained these inconsistencies by saying that she was ‘confused’ at the time her statement was taken,

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and that she also had blurred vision and was suffering from amnesia as a result of a recent accident. The DPP then asserted that she had lied to the police in order to protect Moganaruban, but Ruby disagreed. DPP: “If Uncle Mogan goes to jail, who’s going to pay for your school fees?” Ruby: “I don’t know.” DPP: “If Uncle Mogan goes to jail, who’s going to take care of you and your brother financially?” Ruby: “I’m not lying because he provides for me financially.” DPP: “So why are you lying?” Ruby: “I’m not lying.”

The Verdict and Sentencing

District Judge Kow Keng Siong delivered his verdict on 24 January 2005. Moganaruban was found guilty of cheating three insurance companies out of a total of $331,340 by helping his brother fake his own death. Bail was increased from $300,000 to $400,000, pending sentencing. The courtroom was packed with about 30 of Moganaruban’s friends, employees and family members, including his wife and Gandaruban’s three daughters. The 53-year-old looked stunned when the verdict was delivered and sat wordlessly in the dock after court was

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adjourned. His supporters wept openly and many patted him on the back when the proceedings were over. DPP Paul Chia urged the court to impose on Moganaruban a heavier sentence than that given to Renuga as she was merely a pawn and he was “the prime mover” who had coordinated all the arrangements. Moganaruban was sentenced to 16 months’ jail on 31 January 2005. Three of Gandaruban and Renuga’s children had written a plea, urging the court to show compassion when sentencing their uncle. Interestingly, they did not do the same when their mother was sentenced the year before. The children wrote: “Our mother has never really cared about us and has only used us to get what she wanted. Even when she sold the house and abandoned us, he (Uncle Moganaruban) took care of us and made sure we did not go astray.” Moganaruban’s lawyer Anandan said in mitigation that the offences had occurred more than 16 years ago and that his client was no longer the same man. He also added that Moganaruban was not a corrupt man and that he had been trusted with large amounts of money on many occasions and had never taken any of it. By the time Moganaruban was sentenced, Renuga was out of jail and living with her nine-year-old son Ganesha and working as a clerk. When contacted for a comment,

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she said, “I have lost everything and suffered a lot. I am feeling good this has come to a close. I would like to put this behind me and move on in life with my son.” When Moganaruban appealed in July, Chief Justice Yong Pung How dismissed his case and increased his jail term from 16 to 26 months. He said that Moganaruban “was mixed up in it from the beginning—in every aspect of it. He probably did not need the money, too. Nevertheless, he was a conspirator.” Moganaruban started his jail term on 27 July 2005 and, despite his apprehension, put on a brave front. “I’ll take it as a time to do penance. Also, my cholesterol is very high, so this will be a good time to control my diet,” he joked.

The ‘Dead Man’ Returns

On 17 October 2007, S. Gandaruban appeared in court and was charged with faking his own death so his wife and brother could collect insurance money worth over $330,000. He was detained at Changi Airport on 15 October after attempting to enter Singapore with a Sri Lankan passport bearing another name. Three of Gandaruban’s four children and his brother Moganaruban were present in court. Gandaruban’s now ex-wife Renuga (she had divorced him by then) was conspicuously absent, as was their youngest child.

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Moganaruban posted bail of $500,000 for his brother and the court impounded Gandaruban’s passport. In December, Gandaruban was slapped with three new charges after it emerged that he had used a different name and passport to enter Singapore at Changi Airport on 10 February and a further two occasions on 19 February at Woodlands and Tuas checkpoints. Gandaruban’s trial began on 28 May 2008. In his opening statement, his lawyer Subhas Anandan said that the accused maintained that his brother was not involved in the conspiracy to cheat. The prosecution’s only witness was Gandaruban’s exwife Renuga, who said that it was he who had hatched the plan to fake his death. She claimed that Gandaruban told her in a phone call in June 1988 that this brother Moganaruban was going to give her some documents to sign and that she didn’t know what they were but was suspicious that they were not legal. DPP James Lee asked her why she did it anyway and she revealed that she “had to do it” because of her relationship with Gandaruban. “I was always afraid because he hit me. I used to get a lot of scolding because he’s very strict. He expected us to obey whatever he said.” Gandaruban was eventually sentenced to three years in jail. In July 2010, a week after he was released from jail, he told the media that he wanted to leave Singapore

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because he didn’t want to add to his brother’s burden and that his children were embarrassed by what he did. “I can’t live in Singapore... I can’t get a job because I’ve been convicted, and I need to do something to survive because I have no assets here.” He also revealed why he finally returned to Singapore in 2007. “I heard my brother was in trouble... I was in the wrong and my conscience pricked me. I’m not proud of what I did.”

The Tip Off The news that Gandaruban wasn’t actually dead came to the police’s attention in June 2003 thanks to R. Yogendran. The lawyer had heard the news from Gandaruban’s uncle in 1992, but did not take him seriously then because there were family rivalries in place. He also had his own personal and legal problems and did not think that people would believe his word against Gandaruban’s. But he was alerted to Gandaruban’s fake death again a few years later when it came to his attention that Gandaruban’s wife, Renuga, had given birth to her fourth child after she apparently married a Sri Lankan in Colombo. It was then that he decided that he had to do the right thing and report

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the crime. He also suspected that Gandaruban’s brother, Moganaburan, had a big part to play in the scam. Yogendran then spent the next few years investigating the matter, including travelling to Colombo, where he discovered that the names and addresses of the witnesses of Renuga’s Sri Lankan marriage certificate were fake. He also learnt that her fourth child was fathered by Gandaruban, although he was now living under a different name. “I felt law-bound to report it,” he told The Straits Times in 2005. “If I did not and the scam subsequently came to light, I would be guilty of an offence for not reporting it. But with a criminal record against me, my word would not have stood up against a respectable community leader like Moganaburan unless I had sufficient grounds.” “When the matter became public, Moganaburan called a press conference and made me look as if I was the crook and he the victim. His conviction has proven otherwise.”

Lawyer on the Loose

Lawyer on the Loose

Chapter 9:

David Rasif was once a prominent lawyer and the head of David Rasif & Partners. These days, he is more well known for having absconded with the largest amount of clients’ money in Singapore to date. He fled the country in 2006 with over $11 million in client funds, and is still at large today. The fugitive is currently on Interpol’s ‘Wanted Persons’ list. Rasif was last seen having lunch with a colleague in Singapore on 2 June 2006. According to his staff, he was meant to leave for Bangkok later that Friday with his wife, Joyce Fung. While Ms Fung returned to Singapore the following Monday night, Rasif was both missing and uncontactable. The law firm issued a statement on 6 June, saying that lawyers at the firm had lodged a report with the Law Society after they found ‘irregularities’ and were unable to get in touch with Rasif. These ‘irregularities’ referred to large sums of money that had been withdrawn from the firm’s clients’ accounts.

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The plot soon thickened. The bulk of this missing money was revealed to be the proceeds from a conveyancing deal that Rasif had told one of his lawyers not to complete. If the transaction had been completed, the money would then have to be returned directly to the clients or to their account with the firm. David Rasif & Partners comprised of three lawyers, a part-time consultant and seven non-legal staff. The Law Society had received information earlier that week that made its council suspect dishonesty on Rasif ’s part. The case was referred to the police and the Commercial Affairs Department (CAD) began investigating. As a result, all the staff and lawyers in the firm had their employment terminated with immediate effect. It was later revealed that, on the weekend he disappeared, Rasif was not on the same flight to Bangkok as his wife. Instead, she had flown there to attend a company function and he had joined her there on a later flight, but did not attend the dinner­—nor did he return with her to Singapore.

The Man Behind The Crime

David Rasif graduated from the National University of Singapore and was called to the Bar in 1990. He was involved in several prominent trials and had held key positions in 51 firms in the past. One of them was a

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venture he entered in 1994 with a Kuwaiti businessman, which eventually folded after it became the subject of a commercial investigation. He was also a member of the Association of Criminal Lawyers of Singapore. He had even attended one of its meetings about two weeks before his disappearance and no one suspected anything. “He had a lot of suggestions and even spoke to his daughter on the phone, asking her not to stay awake for him as he would be watching a late movie,” Subhas Anandan, the then president of the Association of Criminal Lawyers, told The Straits Times after Rasif ’s issues came to light. Before his law career, Rasif was already famous as a contestant on the TV show, Talentime, where he was a popular choice thanks to his singing abilities. He also frequented Actors The Musical Bar in Boat Quay and often got up on stage to sing. Rasif has three daughters with his wife, Joyce, his university sweetheart and former beauty queen who was the company secretary and head of legal services at the Singapore Exchange. In the weeks following his disappearance, it came to light that there was also a ‘mystery woman’ in the fugitive’s life, a 28-year-old civil servant who had adopted his family name by deed poll in 2005. This mystery woman, who is a National University

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of Singapore graduate, was reportedly in a pub the night the news of Rasif ’s disappearance broke. Mr Chris Chew, a mutual friend who had known Rasif for more than 12 years, told The Straits Times, “She was more silent than usual and, like us, felt very saddened.” However, he stopped short at acknowledging that she and Rasif were having an affair, instead saying that the two “happened to hang out a lot together and people just [assumed that] there [was] something”. He also revealed that Rasif had known the woman for about 10 years, while she was working as a part-time bartender at a Tanjong Pagar pub. Chew insisted that the two were just friends, although he acknowledged that Rasif would sometimes introduce her to others as his girlfriend, just to see how people would react. “I used to tell him not to do that... but he just laughed it off,” said Chew. “We all knew he was very close to his own family and often talked about them, so there was no problem.”

An Enigma Of A Man

Even without the mystery of a possible affair, David Rasif remained an enigma. Following his disappearance, fellow lawyers and friends who were interviewed by the media painted an interesting picture of the man. He was seen as

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someone who enjoyed making up stories about himself and his life and had once told some people that his father was a gold trader, and that he himself had the title of ‘Prince’. While some friends of the runaway lawyer insisted that all these wild claims were just part of his sense of humour, others believe that he was merely the victim of malicious rumours. Regardless of the truth, no one could deny that Rasif had worked hard to build up his practice from scratch to a fairly successful one. David Rasif & Partners started out as a small practice in 1995, with a tiny 65 square-metre unit in People’s Park Centre. By the time he disappeared 11 years later, the firm had a 223 square-metre office in Carpenter Street, complete with rooms for the lawyers, two conference rooms and a library. The firm handled a mix of civil, commercial and criminal cases. His employees were paid promptly and the office rent was always paid on time. There was no evidence to show he gambled heavily or was involved in stock market speculation. Rasif did not seem to have any financial problems. He and his family lived at Trellis Towers condominium in Toa Payoh, and he and Joyce also co-owned another property at Costa Rhu. His friend, Chris Chew, said that Rasif was never

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short of money. “When there were celebrations, he bought drinks for all. There were no signs of any financial problems at all. He used to say that God was kind to him.” Rasif was, however, involved in a few business ventures over the years, some of which did not quite work out. He was the shareholder and director of DR Resources, which is listed on the Internet as an exporter of metallurgical coal, with a registered premise at his Carpenter Street office. He was also listed as the director of three other companies involved in the wholesale of crude petroleum. One of them, Sidanco Orient, was struck off the companies registry in 1999. His partners in the other two firms were Russians and the shares were held by Belle Mare Investment, a company registered in the British Virgin Islands. Before his disappearance, he was also a director of Pentair Asia, an offshoot of Pentair, a company based in Minnesota and listed on the New York Stock Exchange, that hires about 15,000 people worldwide. A spokesman for the company in the United States said that steps had been taken to remove Rasif from his position.

Rasif was considered by many to be a generous man. Besides frequently paying for his friends’ food and drinks, he was also known to waive legal fees for the poor. Clients

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and employees interviewed by the media only had good things to say about him. Two ex-employees who worked with Rasif when he first set up David Rasif & Partners said that he was a kind boss who gave out $300 red packets during Chinese New Year, even though the firm was just starting out. His clients also sang praises of him. One long-time client said, “I am an ordinary person, but he treats you with such warmth. He’s not stuck-up. It’s something we didn’t expect from lawyers dealing with small businesses.” However, those who knew Rasif well suspected that this was all an act. A female lawyer who had worked with him said, “When you’ve been with him long enough, [you realise that] part of him is just what he wants to portray.” There wasn’t much suspicious behaviour before Rasif ’s disappearance for anyone to notice anything amiss, although he had given his staff generous and unexpected bonuses a few weeks before he left. Rasif ’s disappearance was definitely something that he had planned carefully. In the three days before he left for Bangkok—31 May to 2 June 2005—he made out $11 million in nine cheques and three telegraphic transfers to eight parties. He also wired about $1 million into a friend’s Vietnamese bank account, claiming it to be legal fees that he had earned in London and wanted to avoid paying taxes on in Singapore.

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Although he had gone to Bangkok to join his wife at a company function, he had also made arrangements to collect the money from his friend, Freddy Lim Soon Khiang, in Ho Chi Minh City. Lim, who is Singaporean, was supposed to withdraw the cash and fly to Bangkok to meet Rasif over the weekend of 3 June. However, because of the restrictions on foreign currency that could be brought into the country, Rasif sent someone to Ho Chi Minh City to collect US$500,000 from Lim instead. The rest of the money was spent on Rasif ’s instruction to move the money across borders, while some remained in Lim’s bank account. Rasif was struck off the lawyers’ rolls on 15 November 2007.

Expat Couple

The clients in the thick of the saga were American expatriate couple Mr George Raymond Zage III and his wife, Ms Kaori Kathleen. The pair had been clients of the firm for a few years, and as such turned to them to handle the $10.6 million purchase of a bungalow in District 10. While David Rasif & Partners had acted for them in three previous property deals since 2002, the couple had always dealt with David Tan, a partner in the firm. At the time of this particular transaction, the couple

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had tried unsuccessfully to get in touch with Tan, but instead received an email from Rasif saying that they had to issue various cashiers’ orders in order to complete the sale. They thus assumed that Rasif was merely helping Tan to respond to them. On 8 May, Rasif informed the Zages over the phone that Tan was on sabbatical and that he was taking over the property deal, when the truth was that Tan had left the firm. The couple made an offer on the bungalow and the money was then given to Rasif to close the deal, as is the normal process in such transactions. Mrs Zage, who was in the US at the time, received a forwarded email from David Rasif & Partners to the sellers’ lawyers on 2 June, stating that the couple had instructed the firm to delay completion of the deal. It also referred to a purported conversation between Rasif and the Zages about the sellers’ alleged bankruptcy status in the US. Mr and Mrs Zage insisted that they never instructed the firm to delay the deal and that this was the first time that they had heard about any bankruptcy issue. Mrs Zage emailed Rasif ’s assistant, Ms Chan Lai Foong, but did not receive a response. She rang Rasif the next day, but got a recorded message in Thai. Rasif later returned the call, claiming that one of the

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sellers could be bankrupt and advising the couple to exercise caution with regards to the deal. He agreed to meet Mr Zage in Singapore on 5 June. On that day, Mr Zage was informed by Rasif ’s firm that he would only return at 10pm. He tried unsuccessfully to reach Rasif and eventually called his home, where he was told by Rasif ’s maid that he had gone to Japan from Thailand and would not be returning to Singapore as stated. Mr Zage went to the Commercial Affairs Department the next day to make a police report. Later that month, the couple applied to freeze $16 million worth of assets belonging to Rasif, four other individuals and two companies. This included Rasif ’s bank accounts and his two condominium units, as well as his shares in four firms. Others listed in the suit were Madam Rohaya Mohamed Yassin, who received a cheque for $1.08 million; Mr Ho Chi Kwong, Mr Lim Soon Kiang and two firms (Jewels Defred and Ingenious Ideas International), who received another $3.8 million; and Mr A. Moorthy, who is said to have received a cheque for $780,000. The American couple also filed a suit in the Hong Kong High Court, seeking the return of US$2.6 million from a firm based in British Virgin Islands that was linked to Rasif. The British Virgin Islands Financial Services

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Commission showed that Rasif had set up Ingenious Ideas International in December 2005, with a paid-up capital of US$50,000. The Zages also obtained an interim injunction on 16 June to freeze the money—the equivalent of HK$20 million—that Rasif had wired to a bank in Hong Kong just before he disappeared. Nobody from Ingenious Ideas International showed up in Hong Kong to contest this order. In December 2006, the Hong Kong court ordered that the full amount—the equivalent of $4.13 million—should be returned to the couple.

JewelS DEFRED

One of the other defendants in the Zages’ suit was Jewels Defred. Rasif had allegedly paid the jewellery company $2.08 million for some diamonds, jewellery and gemstones. The firm, along with its director Ho Chi Kwong, contested the order to freeze its assets. Just before Rasif left for Bangkok, he issued two cheques, one to Jewels Defred and one to its director, for the purchase of 27 pieces of jewellery. It is believed that he bought the jewellery for their potential to appreciate in value, and that he had taken the gems with him to Bangkok. The trial took place in June 2007. The Zages’ team of lawyers from Harry Elias Partnership were led by Senior

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Counsel Harry Elias, who argued that the firm must be held liable for the loss of money, because the ‘highly suspicious’ circumstances of Rasif ’s purchases should have raised ‘red flags’. The detailed chronology of events is as follows: On 30 May 2006, Rasif walked into Jewels Defred in the lobby of the Grand Hyatt Hotel on Scotts Road. After expressing his interest in investing in diamonds, he was shown many jewellery pieces and certificates of loose diamonds. Following a presentation by Jewels Defred at his office the next day, Rasif selected seven loose gems and five jewellery pieces. These included a 3.63-carat yellow diamond, a 16.26-carat blue sapphire, two yellow diamonds of 10.89 and 10.7 carats, as well as three diamonds, all without having seen the gems. The five jewellery pieces were items he had seen in the store the day before. The store’s assistant manager offered him a ‘package’ price of $1.6 million. Rasif then requested for an urgent delivery as he was leaving for Bangkok. Rasif returned to Jewels Defred on 1 June with a bank slip to show that $1.8 million had been transferred from his clients’ account to the store’s account. Mr Ho confirmed this with the bank. Because his payment had exceeded the offered price, Rasif proceeded to choose a few more pieces of jewellery and stones and also decided

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to purchase an additional 25-carat blue sapphire. He issued a post-dated cheque for it that night and took the gem and 20 other items with him. On 2 June, the remaining six items were delivered to his home, together with a refund balance of $37,650. Lawyers for the Zages argued in court that Jewels Defred should have been alerted by the fact that the purchases were funded from an account bearing the name ‘David Rasif & Partners—Clients’ Accounts’, and that they should have checked the source and legitimacy of the funds. However, the defence—represented by Drew & Napier—said that the store did not understand the term ‘Clients’ Accounts’. During the trial, Mrs Zage broke down when questioned by defence counsel Hri Kumar, who was trying to establish that although the joint affidavit from the couple indicated that they were ‘reluctant’ to issue the cheque, Rasif ’s assistant (whom they dealt with after he disappeared) had in fact ‘reassured’ Mrs Zage. The housewife insisted that she had not been persuaded to issue the cheque. She lost her cool and sobbed, “Mr Kumar, have you ever written a $10 million cheque? I’m trying to explain to you that a legal assistant would not sway me to write a $10 million cheque.” Mrs Zage also said that she did not feel that there

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was any risk in entrusting money to Rasif ’s firm. “I did not think that Davis Rasif was a dishonest lawyer. David Rasif conducted himself in a professional manner and was competent. He did nothing suspicious prior to stealing our money.” The couple brought in an expert witness, veteran jeweller Itzhak Davidov with more than 30 years’ experience in the business, who prepared a report highlighting some suspicious aspects of Rasif ’s shopping spree. These included the fact that the items were overpriced and that Rasif had bought some items based just on their certificates and without actually seeing them. Mr Kumar disputed the way the jeweller had done his calculations and said that Mr Davidov had nothing to back up his valuation. As the trial continued in September, Jewels Defred brought in jewellery sales executive Mr Lim Geok Khoon as an expert witness. Mr Lim, who has 20 years of experience in the jewellery business, testified that highend jewellers usually don’t bat an eyelid at customers who spend $2 million in a matter of days, especially if the customer happens to be an established lawyer like Rasif. He added that 20 per cent of his clients were lawyers, and that it wasn’t unusual for high-end jewellers to take pieces to their rich clients to preview them. Lim also explained that it was “almost taboo” for

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sales staff to ask rich clients where their money came from. “While the origins of their wealth may differ, these customers are usually discreet and would expect the retailers to be likewise,” he said.

Judgement was passed on 30 December 2008 by Justice Woo Bih Li, who said that there was nothing in the circumstances surrounding Rasif ’s purchases to raise suspicions within Jewels Defred. The judge also did not accept arguments by the Zages’ lawyers that the jewellers should have been suspicious because Rasif paid for the items from the firm’s clients’ account. “I do not think that an honest retailer would know or suspect that it is inappropriate for a lawyer to draw on his firm’s clients’ account and pay for goods purchased for himself,” said Justice Woo. He dismissed the couple’s case against Jewels Defred and its owner, Ho Chi Kwong.

THE 'Helpful' Friend

Mr and Mrs Zage also sued Freddy Lim Soon Khiang, Rasif ’s long-time friend who helped him transfer US$620,000 to a bank account in Ho Chi Minh City. At the hearing in June 2007, the pub owner said that

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he was only trying to help his friend to avoid paying taxes. Rasif had told him that he was about to receive a large sum of money from London as payment for work done, but did not want to incur the taxes from depositing the funds in a Singapore bank account. Lim was in Ho Chi Minh City at the time to meet his Vietnamese girlfriend, and merely did as Rasif instructed. Lim represented himself at the hearing and pleaded with the judge to “drop me off the case so that I can go home”. He added that he had no assets and no money and that there was no point for the lawsuit against him. The judge then said that it was up to Mr and Mrs Zage to drop his name from the suit. Lim revealed the series of events that had taken place. On 28 May 2006, Rasif asked Lim to open an account in Vietnam to receive funds from London. In return, he would lend Lim $100,000, without interest, to pay off an existing loan. Lim agreed, opened the account and flew back to Singapore and gave Rasif the account details. Rasif told him that US$400,000 would be transferred into the account and that he needed Lim to transport the money to Bangkok. When Lim flew to Ho Chi Minh City on 1 June, he found that US$620,000 had been deposited. He withdrew US$600,000 over two days, but was persuaded by his girlfriend not to bring the money to Rasif in Bangkok.

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Rasif then informed Lim via SMS on 3 June that he would arrange for someone to collect US$500,000 from him in Vietnam. After this collection took place at Sofitel Plaza Hotel, where Lim was staying with his girlfriend, Rasif told Lim to transfer the remaining money to him in Singapore. Instead, Lim closed the account and handed US$88,650 to his girlfriend before returning to Singapore. At the time of the trial in June 2007, she had returned US$58,998. However, Lim failed to show up when the hearing continued on 28 January 2008. The Zages’ lawyers had tried to get in touch with Lim since November but he had sold his Boat Quay pub in September, which was in breach of an injunction to freeze his assets. The Zages’ lawyer read out a letter Lim had sent the new owners of the pub that said, among other things, “Too much pressure for me that I have to run away from it all. Sorry.” In his judgement delivered on 30 December 2008, Justice Woo ruled in favour of the Zages and said that, although Lim was duped by Rasif, he also noted that Lim had “deliberately closed his eyes” and that any honest person would have realised that there was something suspicious, and possibly illegal, going on. As the Zages’ money made up 94 per cent of the total amount stolen by Rasif, they were entitled to a

Chapter 9: Lawyer on the Loose

proportionate amount of the money that Lim helped to move. Justice Woo granted judgement against Lim, who was still missing then, for US$583,358.

A Wife’s Tale

Just four days after she last saw her husband David, Ms Joyce Fong received a letter from him, saying that he had met someone else and that he was leaving her to start a new life. “Our life together is over,” he wrote on stationery from the Bangkok hotel that they had stayed in just a few days before. After spending the weekend together, Ms Fong last saw her husband on the morning of 5 June, when he left Bangkok on the pretext of seeing a client in Tokyo. Later that afternoon, she received several urgent calls from her husband’s staff in Singapore about the missing money. She tried contacting him on his mobile numerous times, but to no avail. “He sent me two SMS messages. He said he was sorry and that he would send me a letter to explain his actions.” When Ms Fong flew back to Singapore later that day, she faced ‘an unfolding storm’ of questions from his colleagues, his friends, as well as the police. With the letter, Rasif also sent some money for his

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three children in the form of cheques, which Ms Fong handed to the Commercial Affairs Department. In October 2006, Ms Fong filed for divorce and requested for sole custody of their three children, as well as division of their matrimonial assets and maintenance. She said in a statement to The Straits Times: “In these past few months, my children and I [have discovered] many facets about their father that we never imagined, and [are] trying our best to cope with it in the painful glare of publicity.” Even though it had been four months since her husband’s disappearance, Ms Fong was still no closer to figuring out why he absconded with the money. “We are still searching for explanations as to why he has abandoned his children, his wife and his parents, for whom he was the sole financial support.” She continued, “In some blogs, I have seen how people speak of David’s misdeeds with a somewhat admiring tone. But he did so at the expense of breaking his children’s and my heart. We do not admire his behaviour. Nor do we condone it.” She also admitted that it had been especially hard for her daughters to deal with their father’s actions: “In such a small and closed society as Singapore, it’s impossible to hide from them what their father has done, much less shield them from the consequences of his actions.”

Chapter 9: Lawyer on the Loose

Her daughters, aged 12, 10 and 8 at the time, took to an Internet blog to voice their feelings about the situation. One of the hardest pills to swallow was the fact that Rasif had a mistress who had taken on his surname. Ms Fong revealed that when her children found out about the other woman, they were “extremely disgusted” because they knew who she was. Their father had introduced her to them in the past as an ‘aunty’. Rasif ’s final words to her in his letter were “Goodbye forever”. Filing for divorce was Ms Fong’s way of closing this chapter of her life and moving on. “By his actions and words, he has already said his goodbyes to us. So we, in turn, have to say goodbye to him and sever ties. My children and I wish to be left alone to grieve our loss, away from the public spotlight.” At a hearing on 31 October 2006, Ms Fong was given sole custody of their three children as well as ownership of the two condos that the family owns. She was also awarded $1.5 million in maintenance, but it was unlikely that she would get any of it as Rasif had disappeared. The court also granted Ms Fong’s request to have the ownership of her daughters’ endowment policies transferred so that she, and not her husband, would receive the cash on her children’s behalf when they turned 18. It also allowed the three girls to replace Rasif as the beneficiaries of Ms Fong’s insurance policies.

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STOLEN Money Recovered

The $11.3 million that Rasif had absconded with was slowly recovered over the years. In August 2010, the CAD retrieved over $6 million in cash and gold, both in Singapore and abroad. The CAD seized 40 of the 47 gold bars that Rasif had bought in June 2006 for $1.65 million. The Zages managed to get about $3 million in a Hong Kong account frozen and released to the authorities in Singapore. This had been deposited in the name of a British Vrigin Islands firm registered by Rasif. They also initiated moves to seize US$59,000 from a bank account in Ho Chi Minh City, believed to be the remainder of the sum that Rasif had wired to a friend’s account. Almost $100,000 was found in local bank accounts, from four employees in Rasif ’s firm who had been paid with money from the clients’ account. There was also a balance of $300,000 in the firm’s clients’ account. The Law Society was made trustee of the money and gold bars. The court then decided how to distribute the money among his creditors and, by March 2012, Rasif ’s victims were able to recover about 60 per cent of the money they had been cheated of.

Balvinder Sandhu started her media career in Singapore

in 1996, as a journalist for the weekly newspapers City Weekly and WEEKENDEast, which were published by Focus Publishing, a subsidiary of Singapore Press Holdings (SPH). The two community newspapers were distributed with the main local paper, The Straits Times. Over the next few years, she concentrated on entertainment-related titles such as POP OUT (which later became Zing Out), published by Panpac Media, before becoming the editor of Teens, after which she joined Works Weekly (which later became WW) as an assistant editor. From 2002 to 2004, she worked as a freelancer, both writing and editing for various magazines and websites in Singapore. She covered topics from beauty to home furnishings to personality profiles, as well as working on advertorials and client-focussed magazines. In late 2004, she joined SPH Magazines as an assistant editor for Maxim Singapore, where she also served as the sole sub-editor. She left in March 2008 and moved to

About the Author

Melbourne, where she still resides and works on a freelance basis. She currently contributes as both a writer and editor for magazines, newspapers and websites in Singapore, Australia and Hong Kong, on topics such as health, travel, music, movies, as well as for client-focussed titles. Although she has edited books in the past, this is her first book as an author.

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