SPF: Four charged in elaborate cross-border money laundering scheme

SINGAPOREAN: Four Singaporeans aged between 60 and 63 have been charged in connection with a sophisticated VAT carousel fraud and money laundering scheme involving gold smuggled from China inside signal converters. This scheme actually took investigators more than five years to investigate and unravel.

According to the Singaporean Police Force (SPF), Seow Choon Pheng, Seow Choon Lien, Chu Tung Wu, and Tan Kui Moi were charged on July 8, 2026, under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA) and the Companies Act (CA).

How the scheme worked

The four accused operated three Singapore-registered companies (Macropac System Pte Ltd, Megaspeed Services Pte Ltd, and Seg Metallic Electronics Trading Pte Ltd), which imported signal converters from two suppliers operated by a criminal syndicate based in China.

The syndicate’s method was elaborate. Gold was concealed within the signal converters, which were then declared to Chinese Customs as high-tech products and exported to the Singapore entities at inflated prices. This allowed the syndicate to fraudulently claim substantial export VAT refunds from Chinese authorities, effectively stealing from the Chinese government’s tax system through fabricated trade documentation.

Once the signal converters arrived in Singapore, they were dismantled. The gold was extracted and sold, while the circuit boards were exported back to China via Hong Kong companies for reassembly into the next batch of converters. Payments for these mainboards served as the vehicle for transferring the fraudulently obtained VAT refunds to a Hong Kong-based mastermind.

The carousel-like arrangement, where goods move in a circular pattern across borders, generating fraudulent tax claims at each turn, allowed the syndicate to continue the scheme indefinitely, disguising what were essentially sham transactions as legitimate international trade.

A five-year investigation

The Commercial Affairs Department (CAD) first received information about a possible VAT carousel fraud in November 2020. Recognising the trade-based money laundering aspect of the setup, CAD launched probes in close collaboration with Singapore Customs and Chinese law enforcement counterparts.

CAD Director Peggy Pao described the case as a demonstration of Singapore’s vigilance against criminal syndicates seeking to exploit the country’s status as an international hub for trade, transport, and finance.

“We greatly appreciate the close collaboration between CAD and our Chinese counterparts in this case, which enabled us to disrupt the syndicate’s sophisticated operations and prosecute the case,” she said.

What the accused face

If convicted of money laundering under the CDSA, the accused each face up to 10 years’ imprisonment, a fine of up to S$500,000, or both.

For knowingly carrying on a business for a fraudulent purpose under the Companies Act, the penalty is up to seven years’ imprisonment, a fine of up to S$15,000, or both.

Failure to exercise reasonable diligence as a director carries a maximum of 12 months’ jail or a fine of up to S$5,000, along with possible disqualification from serving as a company director.

Why this case matters

VAT carousel fraud, which has long been a problem in Europe where it has cost governments billions in lost tax revenue, has historically been less common in Asia. This case shows that Singapore’s open trade environment and robust corporate infrastructure, while generally considered to be strengths, can also be exploited by sophisticated syndicates seeking to layer illicit funds through legitimate-looking business structures.

The five-year investigation, cross-border cooperation with Chinese authorities, and the complex paper trail involved in the scheme all point to a level of criminal sophistication that required an equally sophisticated response. The charges signal that Singapore’s authorities are prepared to pursue such cases to their conclusion, regardless of how elaborate the concealment.

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