Singapore Busts Multimillion-Dollar Money Laundering Scheme
A huge money laundering case has riveted attention in Singapore.
In a series of raids across the city-state in mid-August, authorities seized close to three quarters of a billion U.S. dollars in assets including more than 100 luxury condos and dozens of flashy cars. It's one of the city-state's largest ever money laundering cases.
Hundreds of bags were seized, some worth up to $100,000 from the likes of Hermes, Chanel and Prada, plus Patek Philippe watches and jewelry. Police images of the wines seized resemble the cellar of a French chateau.
The Singapore Police Force said the ill-gotten gains were obtained from organized crime committed overseas, including scams and online gambling, with the proceeds then brought into Singapore and filtered through the country's financial institutions.
Ten people were arrested in the raids on Aug. 15, with 12 others currently "assisting authorities" with their ongoing investigation. Eight more individuals are still wanted by police.
Those arrested appeared to be an international group - Cypriot, Turkish, Cambodian and from the small Pacific archipelago Vanuatu. But all the men also had Chinese passports.
Local media have since reported that the men all originate from the same part of China - Fujian province. It's a mountainous region on the country's southeast coast, affluent and once the hub of the Chinese tea industry.
"There has been a significant uptick in operations against money laundering groups recently involving China in cooperation with Southeast Asian countries, and no doubt more are coming", said Jeremy Douglas, the U.N.'s Office on Drugs and Crime representative for Southeast Asia and the Pacific.
It's unclear how the funds got into Singapore and how they were undetected for so long. Some local media reported members of the group have been living in Singapore for up to six years. Bloomberg reported the Singaporean arm of Citigroup was used by some of the men for banking as far back as 2020.
Singapore's Monetary Authority says it was banks that alerted them to the suspicious activities of these men, tipped off by suspicious fund flows and dubious documents about the money's origin.
Kelvin Law is an Associate Professor of Accounting at Nanyang Technological University in Singapore. He says Singapore's reputation as a global financial hub could attract criminals to move their illicit funds to the city-state.
"Singapore has an extremely high volume of high-value cross-border transactions every day. It is easier to hide money laundering transfers in a country with this feature because it is hard to spot the odd ones out," he said.
Once funds are in Singapore's banking system, Law says they can then be easily moved around.
There are now questions about whether such a high-profile money laundering case will impact Singapore's global reputation. Strong surveillance, a vast police network and a punitive justice system have given Singapore the reputation of being one of the safest countries in the world.
"I think they want to show the world that they're really serious about this without hurting the city's place as the financial hub of the region," said Zachary Abuza, a professor covering Southeast Asian politics at the National War College in Washington.
"This is a country where the rule of law and their kind of squeaky cleanliness is one of their key selling points," Abuza said.
Abuza said the city-state has recently invested in artificial intelligence to identify patterns or irregularities that would indicate foul play, making him surprised that the crime wasn't picked up by Singaporean authorities.
"This was not even very sophisticated money laundering, buying luxury goods, this was not sophisticated stuff."
Singapore is keen to protect its reputation, especially as money continues to pour into the country from high-net-worth individuals who see it as a safe haven.
The Monetary Authority of Singapore recently told VOA that the number of private offices managing wealth had risen to 1,100 at the end of last year, compared with just 400 in 2020.
"In recent years, with the geopolitical situation, more people are seeing Singapore as a good neutral place to conduct their business. When there is a lot of capital flowing, money launderers will naturally try to mask their fund flows through the same channels," said Stefanie Theo, managing partner at TSMP Law Corporation.
Singapore's Police Force was strong in its defence of the country's financial integrity. "We have zero tolerance for the use of Singapore as a safe haven for criminals or their families, nor for the abuse of our banking facilities," SPF's Director of Commercial Affairs David Chew said in a statement.
"Our message to these criminals is simple - if we catch you, we will arrest you. If we find your ill-gotten gains, we will seize them. We will deal with you to the fullest extent of our laws."
The United Nations' Office on Drugs and Crime has warned of the increased risk of money laundering in the region.
"Southeast Asia has a huge and growing money laundering problem. Recent innovations connected to casinos, scams and the underground banking system have really driven home just how big and dynamic it has become," said Douglas, the office's Southeast Asia representative