Singapore's largest money laundering case suspect denies charges, foreign media: Banks' ability to resist illegal funds is questionable

In August this year, Singapore uncovered a major money laundering case, with most members holding Chinese passports. Bloomberg analysis pointed out the phenomenon of a large amount of funds fleeing China flowing into Singapore. In addition, financial institutions, banking giants, and real estate are among the tools used by suspects for money laundering, with none spared.

Singapore's Largest Money Laundering Case in Recent Years

The Singapore Police Force (SPF) announced in mid-August that on August 15, they conducted coordinated raids across the country with over 400 officers from the Commercial Affairs Department, Criminal Investigation Department, Special Operations Command, and Police Intelligence Department, arresting 10 foreign suspects involved in money laundering and document forgery, with 8 others who are currently fugitives.

The authorities claimed to have seized SGD 6.7 million and foreign currencies, 70 designer bags and watches, over 20 pieces of jewelry, more than 50 electronic devices, a bank account with a balance of SGD 2.8 million, as well as confiscated 29 properties and 15 vehicles, along with 11 documents related to virtual assets, estimated to be worth over SGD 227 million or approximately TWD 5.3 billion.

The 10 suspects, aged between 31 and 44, are neither Singaporean citizens nor permanent residents, holding multiple passports from various countries. The police have linked them to another overseas criminal organization specializing in money laundering, fraud, and online gambling.

Chinese Influx into Money Laundering Haven

Bloomberg highlighted on September 5 that most of the 10 suspects are from China, attributing the surge of Asia's wealthy individuals into Singapore to the country's financial positioning. The exodus of affluent individuals, particularly from China, has escalated due to crackdowns and pandemic restrictions.

The substantial influx of funds has not only driven up property, automobile, and private school prices but also attracted economic offenders as seen in this case. It raises questions about the effectiveness of banks in preventing suspicious transactions, as major banking institutions were involved in facilitating the suspects' activities.

Financial Institutions, Banking Giants Struggle to Combat Illegal Money Flow?

The lawyer representing main suspect Su Wenqiang stated via email to Bloomberg that Su denies all allegations of running online gambling operations in Singapore. Lawyers for suspects Wang Baosen and Wang Dehai declined to comment.

Bloomberg also referenced legal documents indicating that some suspects held funds in multinational banks in Singapore such as United Overseas Bank (UOB) and Citibank. Standard Chartered Bank, Deutsche Bank, and one suspect were creditors of a related investment company. The suspects also attempted to deceive Oversea-Chinese Banking Corporation (OCBC) and Standard Chartered Bank with false information.

Singapore had only recently enacted legislation in May to allow banks to share customer data to identify high-risk clients. Starting June 28, property developers must also conduct background checks on buyers, but the effectiveness of these measures remains uncertain.

Interestingly, Singapore is the chair of the Financial Action Task Force (FATF) on anti-money laundering, yet virtual assets are evidently not the sole choice for criminals to launder money. Fiat currencies operated through infrastructures like banks remain the primary tool for criminal activities. In this case, real estate even served as a means for storing illicit wealth.