Singapore may tighten finance rules, monitoring new forms of illicit financing

Move to curb money laundering, terror financing activities

The Monetary Authority of Singapore may step up regulations to curb money laundering and terrorism financing risks posed by remittance agents, money changers and some Internet-based payment systems. 

Controls on pawnbrokers and corporate service providers such as lawyers and accountants can also be improved, according to a government risk study released today. Singapore authorities are closely monitoring virtual currencies such as Bitcoins that may be used for illegal activities and will consider regulation if needed, according to the report.

“Singapore’s openness as an international transport hub and financial center exposes it to inherent cross-border” money laundering or terrorism financing risks, according to the study. MAS “has put in place a robust preventive regime. Nonetheless, there are areas for further enhancement.”

The risk assessment study comes seven weeks after Singapore police and the bank association urged residents to be wary of fraudsters seeking to use their bank accounts to funnel illegal funds after an increase of reported cases last year.

Remittance agents, who accept funds for transfer to individuals outside Singapore, and money changers operate in “cash-intensive” industries and offer greater risks of money laundering or terrorism financing, according to report.

Total outward remittance from Singapore amounted to S$24.1 billion ($19 billion) in 2012, while inward remittances were S$995 million, the government said in the study. Volumes in the money-changing business that year were S$36.8 billion. The implementation of controls in these industries isn’t as robust as in banks and MAS will ensure “enforcement efforts are further stepped up,” according to the report.

More Powers 

The pawnbroking industry had total loans outstanding at over S$1 billion in 2012, the study showed. The number of pawn shops in the city increased to 191 that year from 114 in 2008.

MAS is also considering additional supervisory powers and requirements to bolster “nascent” money laundering and terrorism financing controls for Internet payment companies such as PayPal Inc. or Alibaba Group Holding Ltd.’s Alipay.

Agencies involved in the study included MAS, the customs bureau, the casino regulator, the finance, home affairs and law ministries, and the Accounting and Corporate Regulatory Authority.

Accountants and other corporate service providers can be exposed to money laundering and terrorist financing activities if higher-risk customers hire them to set up complex structures that conceal ownership and reduce the transparency of transactions, according to the study.

Tax Evasion 

Singapore’s central bank is stepping up its anti-money laundering rules in line with global regulations following U.S. authorities’ investigation of several Swiss banks for their dealings on behalf of American clients. MAS made it a crime last July for clients to use financial institutions to evade tax.

UBS (UBSN) AG and Credit Suisse Group AG, Switzerland’s largest banks, are among firms implicated in a U.S. crackdown since 2008 on offshore tax evasion that led to charges against about 70 American taxpayers and 30 bankers, lawyers and advisers.

The U.S. charged UBS in 2009 with aiding tax evasion by thousands of American clients. The Zurich-based bank avoided prosecution by paying a $780 million penalty, admitting it fostered tax evasion and agreeing to hand over data on client accounts to U.S. tax officials.

Private Banking 

Risks for private banks operating in Singapore are lower than those for full banks because they have fewer clients, less physical cash transactions and more checks when customers open accounts, according to today’s report. Singapore is Asia’s largest private banking center with offshore assets of about $800 billion, Boston Consulting Group data show as of September.

In Singapore, the number of reported cases of illegitimate cash being given to so-called money mules to hand over to a third party increased to 133 in the first nine months of last year, up from 93 for all of 2012, local police, the bank association and the National Crime Prevention Council said in November. The amount of illegal monies in those cases fell to S$15.5 million from 2012’s S$24.6 million.

- Contributed by Darren Boey in Hong Kong at dboey@bloomberg.net; Sanat Vallikappen in Singapore at vallikappen@bloomberg.net

Singapore monitoring new forms of illicit financing

Asian financial hub Singapore on Friday said it was scrutinising trade in virtual currencies such as Bitcoin as well as precious stones and metals to forestall new forms of illicit financing by criminals and terrorists.

In an inaugural report on money laundering and terrorist financing risks, the city-state said these sectors were identified for further study "as technology evolves and criminals become more sophisticated".

"Authorities will seek to better understand how money laundering and terrorist financing can be carried out through these channels," said the joint report by the finance and home affairs ministries as well as the Monetary Authority of Singapore (MAS).

It said the government would "review international best practices, to determine whether any safeguards and mitigating measures are needed".

The report said virtual money and precious metal-backed currencies carry the risk of being abused due to their anonymity, cross-border nature and low transaction costs.

The MAS, which serves as the city-state's central bank, "is closely monitoring developments in this area and will consider the need for regulation if necessary", the report said.

Bitcoin, the world's most popular form of electronic money, made headlines last year when US authorities closed the Silk Road website when it was found the currency was being used to buy illegal drugs, forged documents, hacker tools and even the services of hitmen.

The report also said Singapore was monitoring the trade in precious stones and metals.

"There are international typologies on the use of precious stones and metals as a tool to launder money, particularly as a store-of-value to move illicit proceeds easily," it added.

The bank said of 22 sectors that were assessed, the city's vast financial sector remained among the most vulnerable to abuse owing to the large number of transactions that take place and its wide international reach.

Singapore houses the regional offices of some of the world's top financial institutions and its total assets under management are now around Sg$1.4 trillion ($1.02 trillion), according to the MAS.

The report said "relevant controls are in place" for financial institutions, including supervision by MAS, record keeping, transaction monitoring and rigorous customer due diligence measures.

It identified remittance agents, money-changers, Internet-based stored value facility holders, pawnbrokers as well as corporate service providers as sectors where "controls are relatively less robust".

"Relevant government agencies will be strengthening the legislative and supervisory framework through the year to address the risks in these sectors more effectively," it said.

"The possibility that terrorist elements may seek to direct funds from abroad to support terrorism activities in Singapore or use Singapore as a conduit for foreign (terrorist financing) cannot be discounted," the report said.

Singapore in 2001 said it crippled a cell of the Southeast Asia-based militant network Jemaah Islamiyah with the arrest of suspects linked to an alleged plot to bomb local and foreign targets including Changi Airport.

Officials say the island republic is a prime target for extremist groups because of its close ties with the United States and major role in global finance and business.- AFP

Genneva gold investment firm slapped with 926 charges

KUALA LUMPUR: Six senior officers from controversial gold investment company Genneva Malaysia Sdn Bhd were slapped with more than 900 counts of money laundering, illegal deposit-taking and false advertising involving an alleged sum of RM5.5 billion.

Company director Datuk Phillip Lim Jit Meng, 57, was charged with 246 counts of money laundering allegedly committed at CIMB Bank Bhd and CIMB Islamic Bank Bhd in Jalan Kuchai Lama between January 2011 and last December.

Jit Meng, who represented two companies — Genneva Malaysia and Success Altitude Sdn Bhd—was charged with 222 counts in his capacity for the first company and eight counts for the second company.

Another director, Datuk Tan Liang Keat, 41, was charged with 226 counts. Company advisers Datuk Ng Poh Weng, 63, was charged with 155 counts, Datuk Chin Wai Leong, 37, with 23 counts and Datuk Marcus Yee Yuen Seng, 61, with 17 counts. General manager LimKah Heng, 42, was charged with 16 counts of money laundering.

They allegedly committed the offences at the same time and same place. At the same court, Genneva Malaysia, Jit Meng, Tan and Kah Heng were also charged with receiving deposits from the public without a  licence via a scheme involving gold transactions at CIMB Islamic Bank Bhd, Jalan Kuchai Lama, between Jan 10, 2011, and Oct 1 last year.

Ng was also charged with abetting them.

Deputy public prosecutor Dzulkifli Ahmad proposed that bail be denied as it was a non-bailable offence.

"However, if the court allows bail, the prosecution would like to suggest that each accused be allowed bail of RM5 million. This case involves approximately RM5.5 billion in investments from 35,000 depositors."

Dzulkifli said the bail amount should reflect the severity of the offences.

In pleading for a lower bail, defence counsel A.S. Dhaliwal said the fixed deposits of all the accused had been frozen by Bank Negara since last year.

He proposed bail be set at RM50,000 for each accused.

Judge Mat Ghani Abdullah allowed bail at RM1 million for each of the accused. He also ordered them to surrender their passports.

The judge fixed an additional RM100,000 in two sureties for offences under the Anti-Money Laundering and Anti-Terrorism Financing Act 2001.

Ghani allowed the prosecution's application for a joint trial and fixed April 7 until 24 next year to hear the case.

Dzulkifli informed the court that the prosecution would call about 50 witnesses to the stand.

Datuk Philip Lim Jit Meng.

Its directors Datuk Philip Lim Jit Meng and Datuk Tan Liang Keat faced 246 and 226 counts of money laundering respectively; business advisers Datuk Ng Poh Weng (155), Datuk Marcus Yee Yuean Seng (17), Datuk Chin Wai Leong (23), and general manager Lim Kah Heng (16).

All six claimed trial to the charges.

The company itself, Genneva Malaysia Sdn Bhd, faced 222 counts of money laundering and Success Attitude Sdn Bhd, eight counts.

Four of them, Philip Lim, Tan, Hah Heng and Ng, were also charged under the Banking and Financial institutions Act 1989 with two counts each of accepting deposits without a valid licence via a scheme involving gold transactions.

Earlier, Philip Lim and Tan pleaded not guilty at another Sessions Court to making a false statement in an advertisement on the company's website, saying its gold trading was in accordance with Islamic law.
Genneva Malaysia Sdn Bhd also faced a similar charge.

The case has been set for mention on Oct 28 and the two were granted bail of RM20,000 each.

Contributed by PUNITHA KUMA NST;  M.MAGESWARI and Maizatul Nazlina The Star/Asia News Netowork

US launches financial attacks against its allies!

The United States and Britain have claimed they have “special relations” for a long period. But recently, the United States has cracked down on large British banks successively.

Barclays Bank was accused of manipulating the interest rate. HSBC Bank was charged of laundering money for drug cartels. Presently, Standard Chartered Bank also turns into the target of U.S. Financial Regulatory Agency.

The New York State Department of Financial Services (DFS) said that since Standard Chartered Bank violated the U.S. Anti-Money Laundering Law and sanctions law against Iran, its business license would be revoked. At first, the Standard Chartered Bank denied the accusation and wanted to file a counterclaim. Experts in the City of London also blamed the DFS for its dictatorship. But a dramatic change subsequently occurred. The Standard Chartered Bank accepted the solution of being fined 340 million U.S. dollars and saved its license in the New York City.

Regarding the attack, the British government has not responded.

Why did U.S. Financial Regulatory Agency crack down upon large British banks one after another? Why did British government tolerate these attacks silently? 

For the United States, there are three reasons.

Politically, in the general election year, the United States does not have the energy to launch a military operation against Iran and therefore it pays more attention to the implementation of sanctions against Iran.

Diplomatically, the United States wants to warn large European banks not to take any chance on the sanctions against Iran, which also frightens other European allies of the United States.

Financially, striking large British banks and belittling the role of Britain as the global financial center are favorable for the Wall Street.

On the British side, although the financial circle opposed that the United States attacked the British banks with sanctions law as an excuse, it did not mention the British banks’ pursuit of profits regardless of professional ethics. That is the reason why the Britain still resorted to the fastest resolution of the scandal in face of U.S. “extortion”.

Britain is not the only country having “special relations” with the United States. Recently, U.S. Financial Regulatory Agency pays close attention to the Deutsche Bank. Obviously, neither Standard Chartered Bank nor the Deutsche Bank is the last target of the United States.

Read the Chinese version: 美国向盟友挥起“金融大棒”, source: People's Daily Overseas Edition, author: Li Wenyun
 Newscribe : get free news in real time

Related posts:

The Libor fuss! 
The Standard Chartered Debacle; How Not To Go After A Big Bank?
Standard Chartered Bank shares plunge on laundering charges
Anarchy in the financial markets!
Libor scandal blows to British banking system
HSBC exposed: Drug money banking, terror dealings ...
HSBC's US$2b cover Money is for cost of US probe and ...
Moody's downgrades 15 major banks: Citigroup, HSBC ...

HSBC’s US$2b cover Money is for cost of US probe and compensation

LONDON: HSBC's chief executive has apologised for shameful and embarrassing mistakes made on anti-money laundering controls as the bank set aside US$2bil to cover the cost of US investigations and compensate UK customers for misselling.

Europe's biggest bank reported a 3% dip in underlying profit and said it had made a provision of US$700mil to cover “certain law enforcement and regulatory matters” after a US Senate report this month criticised HSBC for letting clients shift funds from dangerous and secretive countries.

The report criticised a “pervasively polluted” culture at the bank and said that HSBC's Mexican operations had moved US$7bil into the bank's US operations between 2007 and 2008.

Gulliver: ‘What happened in Mexico and the United States is shameful, it’s embarrassing, it’s very painful for all of us in the firm.’
 

“What happened in Mexico and the United States is shameful, it's embarrassing, it's very painful for all of us in the firm,” chief executive Stuart Gulliver told reporters on a conference call yesterday, adding that the eventual costs could be “significantly higher”.

“We apologise for our past mistakes in relation to anti-money laundering controls, and it is a priority for senior management to build on steps already taken to manage risk and ensure compliance more effectively,” Gulliver said.

Analysts had said the US investigations could result in a fine of about US$1bil.

HSBC is also one of several banks being investigated in a global interest rate rigging scandal that has rocked the sector. Gulliver said it had submitted information to regulators but it was far too early to say what the outcome would be or to estimate the potential cost for the bank.

HSBC has set aside US$1.3bil to compensate UK customers for misselling loan insurance to individuals and interest rate hedging products to small businesses.

The bank reported a pre-tax profit of US$12.7bil for the six months to the end of June, up 11% on the year and above an average analyst forecast of US$12.5bil, according to a poll by the company.

But underlying profit, stripping out gains from US assets sales and losses on the value of its own debt, was down 3% on the year to US$10.6bil.

Shares in HSBC were up 0.7% to 534.6 pence, lagging a 1.8 % rise in Europe's bank index. Reuters  

Related posts:

HSBC exposed: Drug money banking, terror dealings ...
Moody's downgrades 15 major banks: Citigroup, HSBC ...
Barclays, HSBC, BoA among big European, US Banks ... 

Lawyer fleeced millions from victims in property scam

Lawyer on the run

 KUALA LUMPUR : A 44-year-old lawyer is said to be on the run with millions of ringgit from a get-rich-quick scheme involving properties in the Klang Valley.

The man is alleged to be the mastermind behind a syndicate which had duped more than 500 investors nationwide into parting with between RM25,000 and RM80,000 each under a racket similar to the Ponzi scheme.

Over the short span of about a year that the scheme was active, the syndicate also took ownership of more than 200 properties mainly apartments and flats units worth about RM15 million under the lawyer’s name and several of his proxies.

According to sources, the syndicate had offered a list of properties it owned to investors for low prices on a deal to help them re-sell it at much higher prices.

Upon the victims picking the property of their choice and settling payment in full, the syndicate produced fake sale-and-purchase and ownership documents.

With the dud documents, the victims were given the notion that they were the new owners of the property and were assured of earning rental income from it until it is sold at a profit.

Police learnt that the ownership of the properties never changed hands and went on to remain in the names of the syndicate members.

The “sold” properties were then “resold” several times again to other potential investors who were also given fake ownership documentation.

Last year, several investors who realised they had been fleeced by the syndicate lodged police reports at the Brickfields police station.

An investigation was initiated by the police Commercial Crime Investigation Department (CCID) after elements of fraud and illegal deposit-taking was found in the case.

On getting wind that the authorities were looking for him, the lawyer, his accomplices and proxies fled the country together with their ill-gotten gains.

Earlier this year, the Special Task Force (Operations and Terrorism) Department’s anti-money laundering branch was roped in to assist in the probe.

After months of painstakingly compiling a list of the said properties, the investigation team obtained a court order two weeks ago to seize 79 flats and apartment units out of the 188 police had identified.

Federal special task force director Commissioner Datuk Mohamad Fuzi Harun told theSun that police have sought the help of Interpol to track down the mastermind and his accomplices.

“Most of the victims were retirees and senior citizens from the middle and low-income groups who lost either a large portion or all of their life savings.

“When we checked, several dozens of the ‘houses’ sold by the syndicate did not even exist or were not up for sale at all. The victims did not appear to own any of the properties.

“They were merely given falsified and fake documents. We have identified 188 and seized 79 properties so far but we believe there are more out there which we are trying to trace, he said, adding that Malaysian police have alerted Interpol to be on the lookout for the suspects who have gone into hiding overseas.

Mohamad Fuzi said police believe there are hundreds of people who have been fleeced in the racket and have yet to lodge police reports.
He advised them to come forward to assist police investigations.

The case is being probed as cheating under Section 420 of the Penal Code while the seizure of properties were made under Section 41 of the Anti-Money Laundering and Anti-Terrorism Financing Act (Amla).

Charles Ramendran newsdesk@thesundaily.com 

http://www.malaysianbar.org.my/legal/general_news/lawyer_on_the_run.html

Mother of all scams - Many fall for Bukit Aman scam, Syndicates clone caller IDs of enforcement agencies

Tweet

Many fall for Bukit Aman scam

By AUSTIN CAMOENS austin@thestar.com.my 24/8/11

PETALING JAYA: We have heard of the Nigerian 419 scam, the AL-Globo lottery scam, but the Bukit Aman scam must surely be the mother of all scams.
Image via Wikipedia

A syndicate posing as police officers from Bukit Aman has been ripping off unsuspecting victims of hundreds of thousands of ringgit by claiming that they are being investigated for alleged money laundering.

Their latest victim is an elderly woman who lost about RM260,000.

Relating the ordeal, the woman who only wanted to be known as Margeret, in her 60s, said she received a phone call on Aug 18 from a man claiming to be a police inspector from Bukit Aman.

She said the “officer” told her that she was being investigated by the Hong Kong police over dealings with two drug dealers there.

“The officer told me that if I did not cooperate fully with police investigations, I would be extradited to Hong Kong to face charges for the offence,” she told The Star yesterday.

Margeret said the officer then passed to her the number of a senior police investigator in Hong Kong to verify the matter.

“I called the number given and a man claiming to be a police officer warned me that I was being investigated together with 28 other people for alleged dealings with drug dealers there,” she said, adding that the man told her to cooperate fully with the police here.

She said she then received another call from a senior police inspector in Bukit Aman who asked her to transfer all her money into an account provided by them.

“They said this was to help them verify that the funds were not linked to drug dealers in Hong Kong,” she said, adding that she transferred a total of RM260,000 from five separate banks to the police here.

Margeret said the officer told her to transfer any additional funds she had to facilitate police investigations failing which she would be arrested.

“I told them that I had an additional RM128,000 in a fixed deposit account in Temerloh, but I could not withdraw the money until the next day.”

Fearing something was amiss, she lodged a police report with the Mentakab police.

Federal Commercial Crimes Investigations Department (CCID) deputy director Deputy Comm Datuk Tajuddin Md Isa said police were investigating the case and appealed to the public to contact Bukit Aman to verify the calls.

 Syndicates clone caller IDs of enforcement agencies

By AUSTIN CAMOENS and RASHITA A. HAMID newsdesk@thestar.com.my

PETALING JAYA: Syndicates are using special technology to dupe unsuspecting victims into believing they are being called by real law enforcement agencies.

The Voiceover Internet Protocol (VoIP) technology is used to replicate phone numbers of the police, Bank Negara and other government agencies.

“The victims do not know they are being duped as the caller ID is identical to the real number of the relevant authority,” Federal head of CyberSecurity and Multimedia Investigation Division Asst Comm Mohd Kamaruddin Md Din told The Star, referring to reports on the Bukit Aman scam.

VoIP is a family of technologies, communication protocols and transmission techniques for the delivery of voice communications and multimedia sessions over Internet Protocol (IP) networks, such as the Internet.

The modus operandi of the syndicate involved in the Bukit Aman scam was to tell victims that they were being investigated by Hong Kong police for money-laundering activities.

“The syndicate then tells the victims that they must transfer all their savings into an account which is provided by the syndicate in order to verify that the funds are not linked to any cases,” ACP Kamaruddin said, adding that victims were told the money would be transferred back to their accounts once Bank Negara had completed investigations.

He said there had been 76 such cases reported nationwide amounting to losses of more than RM3.05mil between January and June this year.

ACP Kamaruddin advised the public to immediately contact the relevant authorities if they received such calls.

He said there had been a total of 367 cases involving bogus police, bank and government officials between January and June this year, resulting in losses of more than RM10mil.

“Last year, there was a total of 996 cases amounting to about RM17.4mil in losses,” he said, adding that in most cases the money could not be retrieved as the syndicates operated from outside the country.