Singapore money-laundering probe not done ‘at the behest of China’: minister

“Singapore does not need another country to tell us what to do to enforce our laws, nor will we do anything unless it is in our own interests,” Second Minister for Home Affairs Josephine Teo told lawmakers in parliament.

“In this case, we started investigations because we suspected that offences had been committed in Singapore. Once we confirmed our suspicions, we moved,” she said.

Authorities have seized some S$2.8 billion (US$2.05 billion) in assets, including luxury “good-class bungalows”, Bentley cars and Patek Philippe watches, and the laundry list is likely to grow as investigations continue for a money-laundering case described by prosecutors as the “most serious, if not the worst” in the financial hub’s history.

What we know so far about Singapore’s US$1.3 billion money laundering case

Teo was among three officials fielding 57 questions from lawmakers from across the aisle, including how the suspects entered the country and the government’s plans for boosting financial safeguards.

“There has been some speculation circulating in news outlets internationally and domestically that this operation was carried out at the behest of China. This is completely untrue,” Teo said.

Besides money laundering, some of the accused have been charged with forgery and two of the 10 persons have been charged with additional offences of resisting arrest and perverting the course of justice.

Teo said Singapore police had first detected signs of money laundering in 2021 through the discovery of suspected forged documents. The case ballooned into one of the world’s “largest anti-money-laundering operations” and by 2022, police had uncovered a web of suspects with connections among themselves, including familial ties, she said.

Police then continued to analyse the information and probe further, though “a decision was made to hold off any enforcement or overt investigative actions”, she said.

Authorities finally launched a raid in August after collecting sufficient evidence to accuse the suspects of criminal offences.

Teo said the government was “under no illusion that we can always keep out dirty money”, but with “voluminous” transactions happening daily, the authorities depended on stakeholders such as financial institutions, property agents and others to conduct checks and detect risks.

“This is not the first time that we have taken serious enforcement actions against money-laundering offences, nor will it be the last, even with stringent measures in place to continuously review our practices,” she said, referring to actions Singapore had taken during other money-laundering cases such as Malaysia’s 1MDB corruption scandal.

Singapore banks tighten checks on China-born clients with other citizenships

Addressing questions on the immigration status of the men under arrest, Teo said none of them were on Interpol’s written notice at the time of their applications.

While the government would tighten its verification checks at various border checkpoints, Teo said no immigration screening process was “foolproof” and warned against taking “knee-jerk reactions”.

“Our task is to minimise the risks and increase our ability to catch these persons without affecting the majority of proper legal transactions,” she said.

Meanwhile, Second Minister for Finance Indranee Rajah highlighted some challenges the government faced in detecting companies used to front money-laundering activities.

“Criminals often use front companies with a portfolio of businesses comprising a mix of legitimate and illicit activities,” she said. “This makes it challenging for regulators to identify the true nature of companies unless active investigations of the company’s activities are undertaken.”

Rajah said an interministerial committee of political office-holders from various government agencies, such as the Ministry of Home Affairs and Ministry of Law, would also be set up to review the country’s anti-money-laundering regime.

Alvin Tan, a minister of state, said authorities were also investigating the role some single family offices played in the case. One or more of the accused in the case could have links to single family offices that were awarded tax incentives, he said.

Singapore has seen an influx of family offices – set up by the ultra-rich to manage their wealth and investments – on the back of its growing appeal as a financial hub. The number of single family offices there rose to 1,100 by the end of last year, compared with just 400 at end-2020.

Additional reporting by Bloomberg