MAS looking into banks’ role in S$2.4 billion money laundering scandal

SINGAPORE: The Monetary Authority of Singapore (MAS) said in an emailed statement on Sept 26 (Tuesday) about the recent large-scale money laundering scandal that it is looking into whether banks took every reasonable step to diminish the risks.

The S$2.4 billion (US$1.75 billion) money laundering case is one of the largest Singapore has faced. Reuters quoted MAS as saying it will take action if the probe shows loopholes in the banks’ controls. “Supervisory engagements with these (financial institutions) are ongoing to assess whether they had taken all reasonable steps to mitigate against money laundering/terrorism financing risks,” the MAS spokesperson said in the email, adding, “We will take action where the FIs’ controls have fallen short, as we have done in past cases.”

In August, 10 foreigners faced charges in court after authorities seized and froze approximately S$1 billion in assets. These assets included luxury real estate, vehicles, luxury goods, gold bars, cryptocurrencies, and cars.

In the wake of the arrest, local banks said they would be stepping up scrutiny of overseas customers.

Over 400 police officers carried out raids on Aug 15 at multiple locations, including Good Class Bungalows (GCB) and condominiums, which resulted in the arrest of 10 persons.

“Prohibition of disposal orders were issued against 94 properties and 50 vehicles, with a total estimated value of more than S$815 million, as well as multiple ornaments and bottles of liquor and wine.

The Police also seized more than 35 related bank accounts with a total estimated balance of more than S$110 million for investigations and to prevent dissipation of suspected criminal proceeds,” the police said.

In the wake of the scandal, questions have been raised about whether banks have adhered to Singapore’s tight anti-money laundering rules.

Bloomberg said earlier this month that Citigroup, OCBC Bank, and United Overseas Bank are cooperating with the authorities in the fight against money laundering activities.

A number of the people involved in the money laundering scandal had either opened accounts in these banks or secured loans from them through companies established under their names.

MAS added in its statement, “The wealth management sector remains a key area of supervisory focus for MAS and we have conducted thematic inspections, focusing on enhanced due diligence measures, including corroboration of source of wealth and source of funds.” /TISG

Local banks heighten scrutiny over foreign customers in wake of S$2.4 billion money laundering case