Singapore: White Collar Crime

Fraud, money laundering, market manipulation, tax evasion, and corruption, are common financial crime offences that have lately been making headlines in Singapore. A non-exhaustive list of the governing laws for these offences is set out below:

• Penal Code (Cap. 224)
• Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (Cap. 65A)
• Companies Act (Cap. 50)
• Goods and Services Tax Act (Cap. 117A)
• Securities and Futures Act (Cap. 289)
• Prevention of Corruption Act (Cap. 241)

Corporate entities can be held criminally liable. Section 2 of the Interpretation Act (Cap. 1) expressly states that a ‘person’ includes ‘any company or association or body of persons, corporate or unincorporate’, unless the relevant legislation expressly provides otherwise or there is something in the subject or context inconsistent with such a construction.

This is also borne out in Singapore’s Penal Code (Cap. 224), which provides expressly that ‘persons’ liable to punishment under the Penal Code include ‘any company or association or body of persons, whether incorporated or not’. Similarly, the primary bribery offences under Sections 5 and 6 of the Prevention of Corruption Act (Cap. 241) applies to individuals as well as corporate entities. There are also various pieces of legislation that contain offences specifically directed at corporate entities. For example, Section 236C of the Securities and Futures Act (Cap. 289) provides that a corporate entity may be liable to an order for a civil penalty if the corporate entity fails to prevent or detect a contravention, if that contravention is committed for the benefit of the corporate entity and is attributable to the negligence of the corporate entity.

The Companies Act (Cap. 50) sets out several offences that company directors and officers should be cognizant of. In this respect, one of the most commonly prosecuted offences is Sections 157(1) and 157(2), which set out criminal sanctions for a director’s failure to act honestly and use reasonable diligence, and an officer or agent’s improper use of company information. In both situations, the director / officer will be liable to the company for any profit made by him or for any damage suffered by the company as a result of his breach, and guilty of an offence and liable on conviction to a fine not exceeding $5,000 or to an imprisonment term not exceeding 12 months.

The lead prosecuting authorities that investigate and prosecute financial crime are as follows:

• Commercial Affairs Department (CAD)
• Criminal Investigation Department (CID)
• Corrupt Practices Investigation Bureau (CPIB)
• Inland Revenue Authority of Singapore (IRAS)

The purposes and responsibilities of these authorities are varied, and their powers of arrest and investigation are also provided for in different statutes. For example, the Prevention of Corruption Act (Cap. 241) sets out the powers of arrest and investigation for the CPIB, whereas the Criminal Procedure Code (Cap. 68) sets out the powers that CID and CAD has to conduct investigations.

Trial by jury was abolished in Singapore in 1969 by way of an amendment to the Criminal Procedure Code (Cap. 68). In Singapore, there are no gazetted Courts that hear cases of financial crime. There are, however, some judges who are more familiar with cases of this nature, and are regularly assigned financial crime cases given their experience with cases of similar complexity.

Part IV of the Criminal Procedure Code (Cap. 68) sets out the duties of a police officer upon receiving information about offences. For example, a police officer or authorised person, if he deems any document or thing necessary or desirable for any investigation, inquiry or trial, can, amongst other things, issue a written order to require a person in whose possession or power the document or thing is believed to be to produce the document or thing (section 20). Police officers can also issue a written order requiring anyone within the limits of Singapore who appears to be acquainted with any of the facts and circumstances of the case to attend before him (section 21).

Part IV of the Criminal Procedure Code (Cap. 68) also sets out the powers that the police have to conduct investigations. This ranges from search and seizure, as well as statement taking powers.

In Singapore, there is no immediate right to counsel. The Constitution only protects the access to legal counsel “within a reasonable time after an accused person’s arrest”. Moreover, there is no requirement that a person being interviewed by the police be informed of this constitutional right.

The Court of Appeal stated in James Raj s/o Arokiasamy v Public Prosecutor [2014] 3 SLR 750 that the right of access to counsel is to be granted “within a reasonable time”, and that the police would be allowed an initial period to conduct their investigations unfettered by external parties. The Singapore Courts have held that a delay of 19 days (PP v Leong Siew Chor [2006] 3 SLR(R) 290) and 2 weeks (Jasbir Singh v PP [1994] 1 SLR(R) 782) were reasonable time periods for the police to have conduct of investigations.

There are generally two statements which are taken by the police.

Section 22 Criminal Procedure Code Statement

The first is the witness statements under Section 22 of the Criminal Procedure Code which allows the police to the record a statement from a witness either in writing, or in the form of an audiovisual recording. The person examined shall be bound to state truly what he knows of the facts and circumstances of the case, except that he need not say anything which might expose him to a criminal charge, penalty or forfeiture.

Although a witness may enquire as to the matters which the police are investigating, there is no right that the police must divulge the exact particulars of the complaint.

The witness is entitled to have his statement read back to him before he signs the statement. There is also the right to an interpreter if he is unable to speak English.

Cautioned Statement to the Charge

Where an accused person has been charged for an offence, he will be served with the charge which will be read to him. The accused person will then be given an opportunity to respond to the charge in the form of a written statement or in some instances, and audiovisual recording.

The accused is allowed to remain silent. However his refusal to give a statement will be recorded. Should he subsequently bring up a fact favourable to his defence at trial which was not recorded in the statement, the Court can draw an adverse inference against such a fact, and choose to disbelieve it. The accused person will also be warned of this when the charge is read to him, hence the term “Cautioned Statement”.

The witness is entitled to have this Cautioned Statement read back to him before he signs the statement. There is also the right to an interpreter if he is unable to speak English.

Generally, Singapore does not have extra-territorial jurisdiction to prosecute criminal offences committed overseas.

However, there are certain offences which have been legislated by Parliament to have extra-territorial effect. Singapore Citizens can in some cases be prosecuted in Singapore for acts done while overseas, or acts done overseas remotely from Singapore. Examples include offences under the following Statutes:

• Computer Misuse and Cybersecurity Act
• Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act
• Prevention of Corruption Act
• Remote Gambling Act
• Securities and Futures Act
• Terrorism (Suppression of Financing) Act

The Mutual Assistance in Criminal Matters Act (MACMA), the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA), and the Terrorism (Suppression of Financing) Act (TSOFA) are specific examples of statutes which stipulate mutual cooperation with foreign authorities in relation to the offences contained in those statutes.

In addition, Singapore is also a party to a number of international conventions and treaties with individual countries in relation to obtaining assistance in other general criminal matters (including the extraditing of individuals). Generally this is only done for serious offences.

Such cooperative arrangements are usually facilitated by the International Affairs Division of the Attorney-General’s Chambers.

Generally, the police have broad powers under the Criminal Procedure Code to search and seize documents and properties (including electronic devices) where they have reason to believe an offence has been committed. The Criminal Procedure Code also does not contain any prohibitions with regard to the seizing of communications subject to legal professional privilege.

However, the Singapore High Court decision in Ravi s/o Madasamy v Attorney-General [2020] SGHC 221 provided guidance on the proper procedure for handling legally privileged material that has been seized. Where a claim for privileged documents has been brought to the attention of AGC, the Court held that it was for AGC to conduct a review of the seized materials for privileged information. This review should then be conducted by a team of lawyers who are not, and will not be involved, in the underlying investigation. The holder of the privileged documents also has the right to apply to the Court to challenge AGC’s determination, and in such case, the documents in question shall not be handed to the investigation or prosecution team until the Court makes a finding on whether the documents are privileged.

Generally, only documents subject to legal professional privilege are afforded protection. In respect of other information and documents seized, the authorities are obliged to use them in accordance with the purpose for which their seizure was justified upon.

Companies are separate legal entities. A former company (and its directors / officers / employees) remain liable for criminal offences even after the former company has merged with, or been acquired by another. The acquiring entity is not subject to prosecution for the acts of the former company, though they may suffer adverse commercial consequences as a result of the investigations.

Once the investigating authorities have gathered all relevant evidence during the investigative process, the prosecution will review the evidence to determine whether they have sufficient evidence to establish all the elements of any potential charge(s) against an accused person beyond a reasonable doubt.

The final decision on whether to charge any person or company however lies with the Attorney-General, who shall have full discretion on whether to institute, conduct or discontinue any proceedings for any offence. Policy reasons generally also play a part in the exercise of this discretion.

The evidential standard required to secure a conviction is for the Prosecution to prove the elements of the offence(s) beyond a reasonable doubt.

There are no statute of limitations for criminal matters.

In 2018, the Criminal Justice Reform Act 2018 (“CJRA”) was enacted to introduce, amongst other things, a formal legislative framework for the Public Prosecutor to enter into deferred prosecution agreements (“DPAs”) with corporate offenders to handle misconduct. Under a DPA, the Prosecution may agree to defer prosecution of criminal charges against the errant corporation on specific terms which may include financial penalties, the corporation’s efforts to enhance internal controls and compliance policies, disgorgement of profits and compensation made to victims of the offence.

In Singapore, court approval of the DPA is required only after the prosecution and the company in question have agreed on the terms of the DPA, unlike the two-stage approval process in the UK where the court first gives preliminary approval after the commencement of DPA negotiations to permit the negotiations to continue, before later giving final approval when the prosecutor and the company in question have agreed on the terms of the DPA. In approving a DPA, the High Court of Singapore must be satisfied that the DPA is in the interests of justice and that the terms are fair, reasonable and proportionate. If the Singapore Courts subsequently finds that the company has, on a balance of probabilities, failed to comply with the terms of the DPA, the DPA will be terminated and the Prosecution may then decide to prosecute the company.

Unlike the UK where there is a publication of a binding Code of Practice that sets out a test for whether it is possible to enter into a DPA and the factors that the Prosecution may consider in deciding whether or not to enter into a DPA, there is no such similar code of practice in Singapore. All DPA hearings also take place in private and the Courts are not obliged to publish any reasons for their decisions in relation to the approval of DPAs.

Notwithstanding this, it is likely that the factors considered by the UK authorities will also be relevant factors that the Courts take into account in approving a DPA in Singapore. Some factors that the Courts may consider include: the seriousness of the company’s alleged conduct, whether there was systematic perpetuation of the alleged offences over an extended period of time, whether the offences implicated multiple jurisdictions, whether senior employees were involved in the alleged offences, whether the company attempted to cover up its conduct or if there was self-reporting, whether there was similar conduct involving prior criminal, civil and regulatory enforcement actions against the company, the level of cooperation and the presence of any remedial steps taken by the company to address its compliance risks or breaches.

Typically, after an accused person has been charged in Court, Defence Counsel may choose to make written Representations to the Attorney-General’s Chambers highlighting specific facts and/or case law to persuade the Prosecutor to reduce the number and/or nature of charges preferred against the accused person. In the event the Representations are not favourably acceded to, Defence Counsel may then request for a Criminal Case Management System (“CCMS”) discussion with the Prosecution to further negotiate any plea bargain deal.

It is a requirement for a company to report certain offences to the authorities. Section 39 of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (Cap. 65A)(“CDSA”) states that where a person knows or has reasonable grounds to suspect that any property was used or intended to be used in connection with any act which may constitute criminal conduct, he shall disclose the knowledge or suspicion or information which that knowledge or suspicion was based on to a Suspicious Transaction Reporting Officer as soon as is reasonably practicable after it comes to his attention. Schedule 2 of the CDSA lists the serious offences for which reporting is required, and among the offences listed, the more notable offences related to financial crime will include misappropriation of property, criminal breach of trust, dishonestly receiving stolen property, cheating, forgery, and offences related to the Prevention of Corruption Act (Cap. 241).

Section 424 of the Criminal Procedure Code (Cap. 68) also lists the various Chapters and Sections of the Penal Code for which a person aware of the commission of or the intention of any other person to commit these offences, is required to give information to the officer in charge at the police station.

Section 207 of the Companies Act (Cap. 50) also states that if an auditor of a public company or a subsidiary corporation of a public company, in the course of the performance of his duties as auditor, has reason to believe that a serious offence involving fraud or dishonesty is being or has been committed against the company by officers or employees of the company, he shall immediately report the matter.

Voluntary disclosure of a financial crime, after internal investigations within the company, would allow the company to control the content, timing and manner of information that is released to the public, and can significantly assist the company in attempting to manage any potential adverse consequences of such disclosure and its corporate image to restore public confidence. Further, any voluntary disclosure will also resonate positively with the authorities.

Voluntary disclosure of a financial crime after internal investigations are conducted will also allow the company to present its findings in a manner more favourable to the company, which may dissuade the authorities from taking action against the company, or to exercise leniency in any potential settlement discussions.

Legal precedents and the relevant sentencing principles set out in these cases will determine the sentencing framework, approach, and considerations for each case. Generally, in relation to financial crime, the common factors that will affect the likely sentence include the role of the accused person in a company, how sophisticated the modus of the offence was, the ease or difficulty of detection, the quantum involved in offences such as misappropriation, criminal breach of trust and cheating, the duration for which the offence has been ongoing, whether it is syndicated, and the consideration of other mitigating factors such as the accused person’s remorse, any restitution made, the accused person’s lack of antecedents, amongst others.

A strong culture of compliance will significantly reduce the risk of serious financial and reputational damage. With an increased level of regulatory scrutiny and ethical expectations, it is essential for companies to develop a truly compliant culture where people adhere not just to the letter but also the spirit of the law because they want to and believe that it is the right thing to do. With good compliance procedures and risk management, this may lower the risk of wrongdoing, or reduce the duration of wrongdoing if wrongdoing has already been committed. Prosecutors may take into account the existence of a compliance procedure when exercising their discretion to prosecute, and the existence of a compliance procedure may also be a prerequisite to the Prosecution agreeing to any possible DPA. Any existing compliance framework may also be a relevant mitigating factor that the Court considers if the corporation is charged and convicted.

For individuals who have been convicted of the key offences listed in Q1, the courts typically impose a term of imprisonment coupled with a fine. For more minor offences or those which involve a low quantum, the courts typically impose a fine. For certain offences under the Companies Act and Security & Futures Act, the convicted individual may consequently be disqualified from being a director of a company.

On the other hand, the courts typically impose a fine on corporations who have been found guilty of the key offences listed at Q1.

An accused person who has been convicted and sentenced in the State Courts has an automatic right to appeal to the General Division of the High Court (the “General Division”) and such appeals are known as “Magistrate Appeals”.

A Magistrate’s Appeal is initiated by filing a Notice of Appeal with the Registrar of the State Courts within 14 days of the verdict and an appeal can be filed against the conviction and/or the sentence (in the case of conviction after a trial) or only the extent and legality of his sentence (in the case of a plead guilty hearing). Once the Notice of Appeal has been filed, the Record of Proceedings (“ROP”) and the Grounds of Decision (“GD”) will be prepared. Within 14 days of service of the ROP and GD, the appellant must lodge the Petition of Appeal with the Registrar of the State Courts, failing which the appeal will be treated as withdrawn. However, the appellant may file a Criminal Motion in the General Division to request for an extension of time.

The decision of the General Division in a Magistrate’s Appeal is final and there is no further avenue of appeal from the General Division’s decision. However, the accused person may apply for leave with the Court of Appeal to refer any question of law of public interest which has arisen in the matter to the Court of Appeal. The Public Prosecutor, on the other hand, may refer any question of public interest to the Court of Appeal without the leave of the Court of Appeal.

An accused person who has been convicted and sentenced in the General Division of the High Court in its original criminal jurisdiction may appeal against their conviction and/or sentence (in the case of conviction after a trial) or only the extent and legality of his sentence (in the case of a plead guilty hearing) to the Court of Appeal. The initiation of appeal process is similar as in a Magistrate’s Appeal but all documents are to be filed with the Registrar of the Supreme Court instead. Once the Petition of Appeal is filed and the appeal is fixed for hearing, the Skeletal Arguments and Bundle of Authorities must be filed before the hearing.

In recent years, the Commercial Affairs Department (“CAD”) and the Corrupt Practices Investigation Bureau (“CPIB”) have increased the scale of their investigations, and have a wide array of investigative tools at their disposal. Wide ranging amendments have also been made to the Police Force Act recently on 3 August 2021 to grant additional powers to CAD officers, such as the power to arrest persons who possess anything reasonably suspected to be fraudulently obtained, and the power to issue bail and bonds.

The threat of financial crime in Singapore has been exacerbated in the last 12 months by the global COVID-19 pandemic, as well as rising tensions domestically and internationally.

We have seen an increase in insider trading and market manipulation, false trading, online scams and forgery in the banking sector. We have also seen an increase in money laundering cases and cross-border financial crimes over the years.

One of the most recent and notable cases in 2021 is that of Envy Asset Management. Its director, Ng Yu Zhi (“Ng”), is alleged to have swindled investors into putting at least $1 billion into nickel deals that never took place. The investors were promised high returns averaging 15% over three months. Ng faces 31 charges for cheating, fraudulent trading and forgery and criminal breach of trust involving more than $200 million. The case gained even more traction when court documents revealed that some of his victims included noteworthy professionals.

Another case is that of oil trading giant Hin Leong Trading, wherein its founder and chairman Lim Oon Kuin was charged with abetment of forgery for the purposes of cheating, conspiracy to commit forgery and conspiracy to forge a valuable security. Hin Leong Trading was wound up in March this year after failing to restructure $4 billion in debt following the crash in oil prices during the COVID-19 pandemic which exposed the company’s earlier financial troubles. Lim was accused of deceiving at least 14 banks, including DBS Bank.

A young woman, Lange Vivian, was the first person to be charged under the Payment Services Act, which was enacted to fight money laundering and terrorism financing. Vivian allegedly provided a digital payment token service between February 27 and 28 this year and received at least 13 fraudulent fund transfers this way. She is said to have used the funds to buy Bitcoin. She was allegedly acting on the instruction of an unknown person in return for a commission. If convicted of the offence under the Payment Services Act, she can be jailed for up to three years and fined up to $125,000.

The Monetary Authority of Singapore (“MAS”) has harnessed data analytics and augmented intelligence for the purposes of increasing the precision of its Anti-Money Laundering / Countering Financing of Terrorism (“AML/CFT”) monitoring and detecting market manipulation respectively, under “Project Apollo”, an intelligence tool devised by MAS to assist enforcement officers in sorting out cases according to importance.

Enforcement agencies such as MAS, CAD and CPIB work with the Attorney-General’s Chambers (“AGC”) crime division to use technology to process and search voluminous amounts of data quickly. This significantly shortens the time required to bring forth prosecution by leveraging technology.

A formal legislative framework was also enacted in 2018 for the Public Prosecutor to enter into DPAs with corporate offenders to handle misconduct. In recent years, we have seen an emergence of jurisdictions introducing DPAs due to the positive experience of the United States and the United Kingdom in relation to DPAs. This change represented a significant shift in Singapore’s approach towards corporate misfeasance and places Singapore more in line with global trends. The focus has shifted from personal liability to corporate liability and pays greater heed to corporate compliance. The crux of the matter will be internal governance structures within a corporation and its compliance efforts in determining whether a corporation ought to be held accountable for the misconduct of individual employees and if so, whether the public interest justifies a DPA.

The MAS is in the process of amending its Payment Services Act which will see enhanced AML standards for cryptocurrency firms.

The Financial Institutions (Miscellaneous Amendments) Bill (“FI Amendment Bill”) will encapsulate proposed amendments discussed during a public consultation on MAS’s proposal to strengthen its investigative powers under MAS-administered Acts to enhance its ability to gather evidence. The FI Amendment Bill seeks to introduce amendments to the Banking Act, Credit Bureau Act, Financial Advisers Act, Insurance Act, Payment Services Act, Securities and Futures Act, Trust Companies Act and the new upcoming omnibus Act for the financial sector.

Some of the proposed amendments relate to examinations of persons and recording of statements, obtaining a court warrant to seize evidence, and the facilitation of the transfer and sharing of evidence between MAS, the Singapore Police Force and the Attorney-General’s Chambers.