$3b money laundering case: 9 financial institutions handed $27.45m in MAS penalties over breaches

Credit Suisse (Singapore Branch) and UOB were each handed more than $5 million in penalties for flouting anti-money laundering controls related to the $3 billion money laundering case in 2023.

They were among nine financial institutions (FIs) hit with $27.45 million in composition penalties by the Monetary Authority of Singapore (MAS).

On July 4, MAS announced the penalties and said it also took action against 18 individuals who worked for the FIs at the time.

Credit Suisse, which was rescued and taken over by UBS in 2023, faced the highest penalty of $5.8 million. This also took into account its breaches from November 2017 to October 2023 in relation to accounts that the now-defunct Swiss bank maintained on behalf of certain US customers.

Its penalties will be collected from UBS.

UOB was next with penalties amounting to $5.6 million, and then UBS at $3 million.

The other FIs are brokerage UOB Kay Hian, asset manager Blue Ocean Invest, Citibank N.A. Singapore and Citibank Singapore – collectively known as Citi – and the Singapore branches of Julius Baer, LGT Bank as well as fund services firm Trident Trust Company.

MAS said the FIs did not adequately check on customers’ sources of wealth, even though there were discrepancies in the documents they had provided.

In fact, eight of the nine FIs did not adequately investigate suspicious transactions flagged by their own systems.

Singapore’s largest case of money laundering involving $3 billion in cash and assets saw 10 foreigners arrested in multiple islandwide raids here on Aug 15, 2023.

The nine men and one woman, who were originally from Fujian, China, were jailed, deported and barred from re-entering Singapore.

The group had dealings with several FIs here.

MAS took action against the FI staff involved in managing relationships with members of the gang.

Prohibition orders of between three and six years were slapped on four people from Blue Ocean Invest.

They are the company’s chief executive officer and executive director Tsao Chung-Yi; chief operating officer Wong Xuan Ling; executive director and relationship manager Henry Hsia Lun Wei; and former relationship manager Deng Xixi.

MAS said that as senior managers, Mr Tsao and Ms Wong had failed in several areas, including developing adequate policies and ensuring these were subjected to audits.

The prohibition orders mean they cannot manage and provide any FI services for the duration of the order.

Additionally, MAS issued reprimands to three executive directors from Trident Trust and two former team heads from UOB.

Trident Trust’s executive directors, Mr Sean Andrew Coughlan, Mr Tan Ho Kiat and Ms Kek Yen Leng, had all failed to detect or adequately assess multiple deficiencies during the onboarding of higher-risk customers.

UOB’s former team heads of group retail privilege banking, Mr Alvin Ang Sze Hee and Mr Leonard Tan Sheng Rong, had failed to conduct or ensure proper due diligence.

MAS said another nine relationship managers and supervisors were privately reprimanded for more limited lapses. They were not named by the authority.

Reprimands do not necessarily mean the individual “is currently unfit or improper”, but are issued based on the individual’s misconduct at the material time, said MAS.

MAS added that it reviewed the conduct of a larger number of employees of the FIs linked to the case, but did not find evidence of significant lapses by most of them.

However, action may still be taken against several others, after the conclusion of ongoing court proceedings and investigations.

At $27.45 million, the penalties are smaller than the $29.1 million imposed on eight banks in 2017 for various anti-money laundering breaches related to Malaysia’s 1Malaysia Development Berhad case.

That case saw BSI Bank slapped with $13.3 million, and Falcon Bank with $4.3 million in penalties. Both merchant banks had their bank status pulled and were shut down.

The Straits Times understands that while the financial penalties in the $3 billion money laundering case were not the largest, the supervisory engagements are among the most extensive and complex.

Action has been taken against several others linked to the case.

Wang Junjie, a former director at a corporate service provider, was sanctioned by the Accounting and Corporate Regulatory Authority and then charged with forgery in January. Two former relationship managers at banks, Liu Kai and Wang Qiming, were charged in August 2024 with allegedly facilitating the movement of illicit funds.

The cases of all three are still pending.

Two property agents, Tiew Chin Nee and Zhu Zhengxin, have been fined for their involvement in the case.

Liew Yik Kit, the personal driver of one of the fugitives, was the first Singaporean to be dealt with. He was jailed for three months after pleading guilty to lying to the police.

MAS said the penalties it has imposed took into account numerous factors, including the extent of the FI’s exposure to the money launderers, the number of breaches and the degree of weakness in its anti-money laundering controls.

Ms Ho Hern Shin, MAS’ deputy managing director of financial supervision, said it will work closely with FIs to promote more consistent implementation of anti-money laundering measures.

She added that the vigilance of FIs and their employees is critical, and MAS will take firm action where there are serious failings.

The maximum fine for breaching MAS’ requirements for the prevention of money laundering on banks, merchant banks, capital market intermediaries and licensed trust companies is $1 million per offence.

Blue Ocean Invest acknowledged MAS’ findings and said it has implemented measures to enhance its internal policies and procedures.

UOB said that since the saga, it has implemented prompt remedial actions to address the deficiencies identified after a comprehensive internal review. These included stepping up its transaction monitoring and customer due diligence processes.

The bank added that it has conducted a thorough assessment of the facts and circumstances surrounding the issues and staff involved, and taken appropriate actions to address accountability and discipline. 

An LGT spokesperson said the bank remains strongly committed to the fight against money laundering and safeguarding the integrity of Singapore’s financial system.

The composition sums will be paid to the Government’s Consolidated Fund, which is similar to a bank account held by the Government, out of which government expenditures are made.

Source: The Straits Times © SPH Media Limited. Permission required for reproduction.

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