The Singapore money changer in the middle of the 1MDB saga
An FBI investigation into 1MDB and subsequent statements from MAS named several S'porean bankers and banks. A local money changer has been dragged in as well. NG JUN SEN (firstname.lastname@example.org) reports
This is not Raffles Money Change's (RMC) first run-in with controversy.
In 2012, local court papers said RMC had transferred more than 700,000 euros (S$1 million) in illegal betting profits from Singaporean businessman Dan Tan Seet Eng.
Tan, 51, is being investigated for alleged match-fixing activities. He is currently detained without trial under the Criminal Law (Temporary Provisions) Act.
Court documents said the money went to a Panama company started by a syndicate for the illicit purpose of receiving and distributing funds relating to match-fixing.
Business registration records show that RMC has three directors, including Singaporean Teo Teng Beng.
Mr Teo was charged in Australia in 1993 with failing to declare excess currency, amounting to A$43,000 (S$43,000) which he was taking out of the country in his suitcase.
There is no further report on the outcome.
RMC is now caught up in the global storm of investigations into 1Malaysia Development Berhad (1MDB) when it was named - albeit perhaps erroneously as "Raffles Cash Exchange" - in a 136-page investigation report by the US Federal Bureau of Investigation (FBI) on Wednesday.
US prosecutors alleged that RMC was responsible for wiring more than US$12.8 million (S$17 million) from a bank account linked to a 1MDB conspirator, said the FBI report.
COMPLICATED: A flow chart drawn up by reporter Ng Jun Sen to map out how money allegedly flowed from 1MDB. TNP PHOTO: NG JUN SEN
This money is believed to have been part of more than US$1 billion that was siphoned from 1MDB bond proceeds and was originally meant to go to energy investments in Abu Dhabi.
Instead, US investigators said the money travelled to a Singaporean bank account that was allegedly owned by Malaysian Eric Tan Kim Loong - a friend of Malaysian financier Low Taek Jho, or Jho Low.
The FBI report added: "Frequent use of currency exchange brokers... is a technique commonly used by individuals engaged in money laundering and other unlawful conduct to move money in a way that is less likely to be traced by law enforcement and regulatory officials."
WEAK MANAGEMENT OVERSIGHT
The Monetary Authority of Singapore (MAS) said it found "weak management oversight, inadequate risk management practices and internal controls" at RMC.
RMC had failed to identify beneficial owners of the money, verify the authenticity of remittance instructions or assess if the customer's remittance activities were "consistent with the profile of the customer".
The MAS is finalising regulatory actions against RMC, the MAS statement said.
On Friday, it was business as usual at RMC at Clifford Centre.
Its nondescript office is quietly nestled among other financial institutions and businesses on the 20th storey of the Raffles Place building.
RMC said in a statement to the press on Friday that it has always cooperated with the authorities in suspected money-laundering transactions.
"The management of RMC believes in having in place strong internal controls and risk management policies, and is constantly working to improving its compliance procedures. It has always, and will continue to, work closely with the MAS to address any issues as required," it said.
An RMC staff member told The New Paper on Sunday over the phone that the company could not comment or clarify further about its alleged role in the 1MDB saga.
About the case
1Malaysia Development Berhad (1MDB) was formed in 2009 to make investments that promote economic growth and attract foreign investment to Malaysia.
But by 2014, it had incurred a staggering US$11 billion (S$15 billion) in debt and is now subject to what some are calling the most complex white-collar criminal investigation so far.
Investigators are looking into whether money that was meant for investment purposes was illegally routed to personal accounts, including that of Malaysian Prime Minister Najib Razak.
1MDB money was allegedly used to pay for properties and luxury items owned by Malaysian financier Low Taek Jho, or Jho Low, including a private jet, art pieces and premium homes in the US.
Prosecutors also believe the money helped finance a film - The Wolf Of Wall Street - for the production company of Mr Najib's stepson, Mr Riza Aziz.
Investigators in multiple countries are now looking into how 1MDB funds might have flowed through their financial systems.
The US is seeking to recover more than US$1 billion in assets in a civil forfeiture suit, including the profits and assets of The Wolf Of Wall Street.
US Department of Justice officials describe it as the largest single action ever brought under the Kleptocracy Asset Recovery Initiative.
The suit names Mr Low, Mr Riza and other associates of the duo as conspirators.
In Singapore, criminal action has proceeded against two former BSI Singapore bankers who had a role in the conspiracy.
BSI Singapore, a private bank headquartered in Switzerland, also had its licence revoked by Singapore's central bank as part of the crackdown on alleged illicit money flows involving 1MDB.
The authorities here have seized around S$240 million of assets - bank accounts and properties - over the course of the investigation. Half of these belong to Low and his immediate family.
S'pore banker at centre of probe
Who is Singapore Banker 1?
The term was used in the US Federal Bureau of Investigation's (FBI) probe to refer to a key figure in the 1Malaysia Development Berhad (1MDB) saga with ties to a shell company that is important in the investigation.
So far, only two Singaporean bankers have been formally charged - Yeo Jiawei, 33, and Kelvin Ang, 34.
Yeo, a former BSI Singapore banker was described by prosecutors here as having played a "central role" in moving large amounts of monies and concealing transactions.
He was charged here with money laundering offences in April.
So far, his involvement has not been linked to Good Star Account (GSA), where more than US$1 billion (S$1.4 billion) of 1MDB funds allegedly flowed through, but to a separate 1MDB fund in the Cayman Islands.
Yeo is currently held in remand, and his case is still before the courts.
Another Singaporean banker linked to the case is Mr Yak Yew Chee, an ex-BSI Singapore banker who was also Malaysian financier Jho Low's private banker.
Once a star banker in BSI Singapore, he was put on unpaid leave last year.
According to the Monetary Authority of Singapore (MAS), six ex-BSI bankers are being investigated for criminal offences.
Mr Yak is one of the six, but has not yet been charged. He has denied any wrongdoing.
What is the connection to BSI Singapore?
Singapore Banker 1 is described as a former RBS Coutts banker who left the bank to join BSI Singapore. In 2009, more than 70 bankers left RBS Coutts in a mass defection to join BSI Singapore.
BSI Singapore was shut down by the MAS in May for breaching anti-money laundering rules.
FBI investigators alleged that Singapore Banker 1 is named in the corporate records of a shell company, Good Star Limited, which was formed in the Seychelles in 2009 and held the GSA.
Around US$20 million was eventually routed to the private bank account of a person identified as Malaysian Official 1, the report said.
Good Star is controlled by Mr Low, the report said.
Singapore Banker 1 is believed to have managed the GSA - the company's books, records and minutes were kept in his or her office at 50, Raffles Place.
The office is also designated as the location where "all correspondence" to Good Star should be sent, said the report.