On 3 November 2022, Leo Shiou Juangq (“Leo”), a 55-year old man, was convicted of an offence under Section 44(1)(a) of the Corruption, Drug Trafficking and Other Serious Offences (Confiscation of Benefits) Act (“CDSA”), Chapter 65A, for being concerned in an arrangement to facilitate another person’s control of benefits from criminal conduct and an offence under the Companies Act, Chapter 50, for failing to exercise reasonable diligence as the director of a company.
He was sentenced to 15 months’ imprisonment and a fine of $5,000. He was also charged under Section 5(1) of the Moneylenders Act, Chapter 188, for his involvement in a separate matter, which was taken into consideration for the purpose of sentencing.
Sometime in May 2018, Leo responded to a text message from an unidentified male known as “Max”, who offered him loans and a way to “earn money without having to borrow from him”. According to Max, Leo simply had to register a company in his name and open corporate bank accounts under the company’s name, and he would be paid at least S$1,000.
Between August and September 2018, Leo assisted Max in registering a company, Oasis Mg Pte Ltd (“Oasis”), and opened two corporate bank accounts for the company.
Leo relinquished control over both accounts to Max by passing the bank tokens, Automatic Teller Machine cards, and cheque books for the said accounts to an unidentified runner working for Max.
In his role as the sole director of Oasis, Leo did not exercise any supervision over the company’s affairs and failed to monitor the business activities in its two corporate accounts.
Leo had reasonable grounds to believe that Max had engaged in criminal conduct, and that the relinquishment of his control over Oasis’ bank accounts to Max would facilitate Max’s control of his benefits from criminal conduct. In particular, Leo had received a warning from the Police in early 2019 to refrain from giving up control over his bank accounts to others, and was informed that he may be exposing himself to criminal liability if he continued to do so. He had also received multiple fund recall requests from banks regarding suspicious transactions using Oasis’ bank accounts. Despite these circumstances, Leo continued to act on the instructions of Max, and did not choose to report the matter or close the accounts.
Between March and May 2019, criminal proceeds totalling US$204,901 were channelled through the accounts. The criminal proceeds originated from several victims, who had made the transfers believing that they were purchasing investment shares.
Under Section 44(1)(a) of the CDSA, a person who enters into or is otherwise concerned in an arrangement, knowing or having reasonable grounds to believe that, by the arrangement, the retention or control by or on behalf of that other person’s benefits of criminal conduct is facilitated, and knowing or having reasonable grounds to believe that that other person is a person who engages in or has engaged in criminal conduct or has benefited from criminal conduct shall be liable on conviction, to a fine not exceeding $500,000, imprisonment for a term not exceeding 10 years or both.
Under Section 157(1) of the Companies Act, a director who fails to act honestly and use reasonable diligence in the discharge of the duties of his office shall be liable on conviction to a fine not exceeding $5,000 or imprisonment for a term not exceeding 12 months.