Singapore steps up S$1 billion money laundering investigation

Written by Kapronasia || August 30 2023

Most of the time when we write about Singapore’s rise as a wealth management hub, the news is overwhelmingly positive. But every so often, the risks inherent to taking on that role become glaringly apparent. Singapore is no stranger to money laundering risks, especially after several banks in the city-state were involved with the 1MDB mega scandal. However, in the S$1 billion money laundering investigation Singapore is currently undertaking, it seems the city-state is the center of the alleged crimes rather than Malaysia or another country.

Last week, Singaporean authorities requested documentation from several banks as they investigated one of the city-state’s largest ever money laundering and fraud cases that has led to the seizure of luxury homes, cars, designer handbags and heaps of cash and gold bars.The names of two banks — Citigroup’s Singapore subsidiary and Malaysia’s CIMB — emerged when charges against those arrested were published last week. Other banks have not been named and none of the financial institutions have been charged.

The 10 individuals who have been arrested are all in possession of China-issued passports though some initially appeared to be citizens of other countries including Cambodia, Turkey, Cyprus and Vanuatu. They are suspected of laundering the proceeds of overseas criminal activities, including scams and online gambling, as well as forging documents. Those convicted of money laundering in Singapore can be jailed for up to 10 years, fined up to S$500,000, or both. Media have since reported that the men all originate from Fujian Province. 

We are interested to see if this case is directly connected to the surge in Chinese money that has poured into Singapore in recent years, a phenomenon that has occurred in tandem with more immigration from China and the establishment of regional corporate headquarters by large Chinese companies in the city-state. To be sure, most of this activity is aboveboard. Yet given the sheer volume of the inflows, it would be not be surprising if there were some criminal activity occurring somewhere within.

The Monetary Authority of Singapore recently told Voice of America that the number of private offices in Singapore managing wealth had risen to 1,100 at the end of 2022, compared with just 400 in 2020.

Additionally, it will be interesting to see what role, if any, tougher proposed anti-money laundering legislation may play in this case. In April, Singapore’s Ministry of Home Affairs (MHA) and the Smart Nation and Digital Government Office (SNDGO) proposed stricter laws to strengthen the country’s defense against scams facilitated by money mules. While the police investigated more than 19,000 money mules between 2020 and 2022, the MHA notes that fewer than 250 cases were eventually prosecuted.