Singapore

Fine, $49k penalty for lawyer in scam to defraud Government

 A lawyer was fined $4,500 and ordered to pay a penalty of $49,212 on Friday (Aug 4) for being involved in a scam to defraud the Government by abusing the Productivity and Innovation Credit (PIC) scheme .

Sole proprietor of law firm Kanga & Co Kangatharan Ramoo Kandavellu, 55, admitted in court on June 2 that he had given false information to the Comptroller of Income Tax. The PIC scheme is administered by the Inland Revenue Authority of Singapore (Iras).

Iras tax prosecutor Elisa Soh Hui said the scheme is meant to spur productivity by granting cash payouts and bonuses to businesses.

As part of the conditions, businesses must employ at least three local employees before they are eligible to apply for the PIC cash payouts. They must also incur business expenditures.

Ms Soh said Kangatharan was involved in the scam with sole proprietor of Paradize Consultancy S. Chandran, 35, and Chandran's wife, A. K. Sahtyah J. Alexander Vincent, 29.

In 2014, the lawyer heard about the PIC scheme from his friends. He also found out from them that Paradize Consultancy had a "licence" to make a PIC claim on behalf of applicants.

Kangatharan then arranged to attend a presentation on PIC organised by Paradize Consultancy.

Ms Soh said: "The accused was aware that he was not eligible for the PIC scheme. During the presentation, the accused informed Sahtyah that as he only had one person working for him on an informal basis, he did not have the requisite number of three employees to qualify for the PIC scheme."

Sahtyah told him that he would have to find two names to be used as employees.

According to court documents, Kangatharan, with the help of Sahtyah, Chandran and the staff at Paradize Consultancy, then made false declarations in the PIC cash payout application form dated July 1, 2014.

He stated that his son and sister were local employees of Kanga & Co even though they were not working there. He also falsely stated that his firm incurred an expenditure of $16,010.

Should his claim be successful, he would receive $24,606 from Iras. He then had to pay Paradize Consultancy half this amount.

However, Iras managed to detect the false information and made no payouts.

Despite this, Kangatharan was still hit with a penalty - which is double the $24,606 - because if not for detection, he would have been given the money.

Kangatharan was one of the last two of 18 claimants linked to Chandran.

Sole proprietor of Treasure Max Productions Stanley J. Alexander Vincent, now 27, was the second person to be dealt with on Friday.

The Malaysian who is a Singapore permanent resident is also Sahtyah's younger brother.

He was fined $5,000 and ordered to pay a penalty of $39,192 after pleading guilty on June 2 to three counts of giving false information to the Comptroller of Income Tax between October 2013 and April 2014.

The case involving Chandran is still pending. He was charged in court on Jan 27 with multiple counts of helping others to fraudulently obtain PIC cash payouts and bonuses amounting to $1.1 million. This is the biggest case involving an alleged PIC promoter to date.

The alleged offences occurred between June 2013 and November 2014.

An offender convicted of giving false information can be jailed up to three years and fined up to $5,000.

On top of this, he can also be ordered to pay a penalty of twice the amount of the cash payouts and bonuses.

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