S$2.8B money laundering scandal may have ties with family offices

SINGAPORE: Minister of State Alvin Tan said in Parliament on Tuesday (Oct 3) that at least one of the individuals involved in the S$2.8 billion money laundering scandal may have been connected to single-family offices given tax incentives.

“Ongoing investigations and supervisory engagements suggest that one or more of the accused persons in this case may have been linked to SFOs (single family offices) that were awarded tax incentives,” Mr Tan said. He added that officials are looking into single-family offices’ role in the case, one of the largest money laundering cases in Singapore’s history.

A family office is a private wealth management firm catering to high-net-worth and ultra-high-net-worth individuals, aka the world’s uber-wealthy. A July report said that over half of the family offices in Asia—59 per cent—may be found in Singapore.

In 2020, there were only 400 family offices in Singapore, but by the end of last year, this number had nearly tripled to 1,100.

The Monetary Authority of Singapore has not detected any “adverse information of note” about the persons involved when they applied for the incentives, said Mr Tan, adding, “Nonetheless, MAS is reviewing our internal incentive administration processes, and will tighten them where necessary,” he said.

He also said that MAS will “study whether further measures beyond those that have been proposed in the consultation are necessary”.

“More broadly and even before this case, MAS had already in July 2023 announced plans to strengthen its surveillance and defence against potential ML risks posed by SFOs. The consultation, which just closed this Saturday, on 30 September, proposed specific requirements to ensure that all SFOs, regardless of whether they apply for tax incentives, are subject to strict anti-money laundering controls,” he said.

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 raided 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. /TISG

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