SINGAPORE — Two Singaporean men were sentenced to prison after they unintentionally helped scammers launder nearly $20 million through their roles as nominee directors of shell companies.
The funds came from local and foreign firms, which had fallen victim to scams, including business email compromise and impersonation frauds.
On November 30, 2020, Bernard Chng Kok Leng and Tay Chee Seng, both 49, were sentenced to six and four weeks of jail time respectively. Chng pleaded guilty to five charges of failing to exercise reasonable diligence in his duties as a director, while Tay pleaded guilty to three. Both men also received similar charges taken into account during sentencing and were disqualified from holding directorial roles for five years.
The men had joined as nominee directors in mid-2020 after seeing advertisements from a corporate secretarial firm, Interconnect Consultancy, seeking such positions. At the time, Tay was struggling financially, earning between $1,000 and $1,600 a month due to the economic downturn caused by the COVID-19 pandemic. Seeking additional income, he and Chng approached the firm to inquire about their concerns that the companies might be used for illicit activities.
However, Lee Chia Yen, the firm’s director, and his colleague, Lee Ay Ling, assured them that due diligence would be done, and they need not worry. They were promised $250 in director’s fees every six months. Tay was told he could direct a new company daily, which could result in monthly payments of $7,500. Subsequently, Chng was appointed as a nominee director for 52 shell companies, while Tay was assigned 57.
Their only responsibility was to provide their personal details to the firm, with no involvement in managing the companies’ operations or transactions. These firms’ bank accounts eventually received over $14.6 million (S$19.5 million) in scam proceeds.
In September 2020, the Belgian company Grib Diamond NV transferred $10 million to a UOB account belonging to one of Chng’s companies, Hang Yi, after receiving fraudulent emails from someone posing as their CEO. Within days, the money was sent to various accounts in Hong Kong, China, and Singapore and remains unrecovered. Similarly, Tay’s firm, Liang Zuo, received $500,000 from Pactera Edge Technologies Singapore in August 2020, based on fraudulent instructions from someone impersonating its director. Fortunately, the police seized the full amount from Liang Zuo’s account.
Deputy Public Prosecutor Janice See explained that the men had been aware of the risks associated with being nominee directors but chose to ignore their doubts, neglecting their duties. In court, Chng stated that he had been “duped” into the role, though he acknowledged he had no excuse for not being more diligent.
District Judge Wong Li Tein remarked that Chng’s reliance on unreliable information and both men’s recklessness warranted jail time.