Update new anti-money laundering laws regularly to deter scammers, money mules: Experts

The recently proposed changes to fight scams aim to make it easier for the authorities to prosecute money mules when they sell their payment or Singpass accounts.

In Parliament in April, amendments to the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Bill and the Computer Misuse Bill were introduced for the first time.

But even as the law changes, scammers will probably find ways around them, said Mr Ian Lim, field chief security officer for the Asia-Pacific and Japan for Palo Alto Networks.

That is why the law must be updated regularly for the authorities to adapt to new scam tactics to better protect the public, said Mr Lim and other experts.

The proposed changes will introduce the new offences of rash and negligent money laundering, and disclosing or dealing in Singpass credentials for criminal activities.

Rash money laundering is when the money mule knows or has some idea that what he is doing involves a criminal element.

Negligent money laundering is when he did not find such transactions suspicious, even though a reasonable person would have noticed red flags.

Money mules would also no longer be able to claim they did not know they were selling their bank or Singpass accounts to scammers.

Mr Lim said the proposed laws hit directly at the lack of consequences for money mules.

They are typically those who hand over control of their payment accounts to criminals, or who use their payment accounts to receive or transfer money under the instruction of criminals.

More than 19,000 money mules were investigated in the past three years, but fewer than 250 could be prosecuted, said the Ministry of Home Affairs (MHA) and the Smart Nation and Digital Government Office (SNDGO) when the proposed changes were tabled in Parliament.

Under current laws, it is difficult to prosecute those who claim ignorance that their accounts were going to be used for criminal activity.

Mr Lim said that if passed, the new laws will make scammers have to work harder to recruit money mules, whom they need to move ill-gotten funds, slowing them down and cutting into their scam profits.

Scammers might use underhand tactics to recruit money mules, added Mr Lim.

“They might use more blackmail methods, such as in credit-for-sex scams, to force victims into doing their bidding. They might also figure out loopholes in the law to exploit.”

MHA and SNDGO said the authorities will be actively monitoring crime trends and continually updating the laws to tackle scams.

Mr Lim added that when money mules provide their Singpass details to scammers, it is equivalent to an insider attack.

This is because Singpass is the digital equivalent of a Singapore resident’s identity, a secure and verified access key that can be used to engage more than 2,700 services by over 800 government agencies and businesses.

This includes being able to open new bank accounts.

Mr Lim said: “The core issue is that money mules are providing Singpass credentials to cyber criminals to enable the opening or transferring of illicit funds. They are abusing this trusted entity to benefit the attacker.”

MHA and SNDGO said they noticed more Singpass users selling their accounts, leading to the larger problem of criminals using these accounts to register companies, open bank accounts and sign up for new phone lines, to facilitate scams and other offences.

This causes scams to proliferate, and also makes it difficult for the authorities to trace the movements of illicit funds.

Asked about other types of accounts such as those on social media and gaming platforms used to proliferate scams, MHA and SNDGO said this will be dealt with in the upcoming Online Criminal Harms Bill, which MHA will be introducing soon.

“The Government has put in place other measures to tackle the scam situation, including public education, technical solutions to prevent scammers from targeting potential victims, and enhanced scam detection and response,” said MHA and SNDGO.

The problem of account sales and sharing becomes a larger one when scam proceeds are used to finance terrorism.

In 2019, a criminal syndicate that scammed victims in Britain out of £8 billion (S$13.3 billion) sent around £80 million to terrorist group Al-Qaeda.

Senior State Counsel Gordon Oh Chun Wei said the Attorney-General’s Chambers takes a firm stance against those who dupe financial institutions into giving access to those who facilitate the movement of criminal proceeds or funds for financing terrorism.

He said: “As an international financial centre, Singapore has committed to implementing and upholding the Financial Action Task Force Recommendations to tackle money laundering and terrorist financing.

“It is imperative we curb money laundering to protect Singaporeans and Singapore’s reputation as a safe and trusted financial hub.”

Lawyers said the proposed laws are expected to have a deterrent effect, but it may take some time.

Mr Cory Wong from Invictus Law Corporation said it is unlikely that existing or potential money mules will become aware overnight that they are breaking the law.

“The effectiveness of the deterrent effect will gain more traction over time as more money mules are taken to task and dealt with by the courts,” he said.

The Singapore Police Force conducted a sample study in 2023 on 113 money mules who were involved in cases reported between 2020 and 2022.

The study found that about 45 per cent were 25 years old and younger, and 90 per cent were first-time offenders.

The police and SNDGO told The Straits Times that they will continue to work with relevant partners and agencies to educate young people about the responsible use of Singpass.

Mr Joshua Tong from Kalco Law, who has represented money mules, said the new laws, if passed, will likely make people more careful about sharing their bank and Singpass details.

“I think it will deter people from being flippant about who they give their bank account details to, because simply saying ‘I don’t know’ is not good enough any more,” he said.

How payment and Singpass accounts can be used by criminals

Payment accounts, which include bank accounts and cryptocurrency wallets, are used by criminals to:

• Transfer and collect monies in scam operations;
• Launder money by moving monies across jurisdictions, and switching currencies to make it difficult for the authorities to trace;
• Transfer money to terrorist organisations.

Singpass accounts can be used to open new bank accounts, sign up for new phone lines and set up companies. With phone lines, criminals can:

• Evade anti-scam measures, including the +65 initiative;
• Impersonate Singaporeans to apply for services like opening bank accounts for criminal activities;
• Avoid being traced by using another person’s particulars.

The setting up of companies using another person’s Singpass allows criminals to:

• Create shell companies as a front for criminal activities;
• Make a criminal enterprise appear legitimate and to avoid detection.

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

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