Singapore cops seize $27million linked to China Ponzi scheme
Money meant for purchase of Sentosa Cove bungalow was part of $7.7 billion lost by 1.15 million victims of Ponzi scheme in China
Almost two years of laboriously tracing a twisting and turning money trail paid off big-time for the Commercial Affairs Department (CAD).
The Singapore police's white-collar crime unit had tracked the trail through numerous local and foreign bank accounts before connecting the dots to recover more than $27 million of ill-gotten proceeds that had been parked here by one of China's largest Ponzi schemes.
The case, which the CAD started investigating in 2016, was a landmark one and involved many firsts for the authorities, said officer Muhammad Imran Mohamad Ayub, 32, a team leader with the International Cooperation Branch.
When news broke in 2016 that China's largest online peer-to-peer lender Ezubao had been shut down after it was discovered to be a Ponzi scheme, the Singapore authorities received intelligence that some cash had been transferred here.
The CAD engaged the Chinese authorities and began investigating.
Ezubao had promised high returns to investors, who unwittingly put their money into fake projects.
The funds from new investors were then used to pay old debts.
The scam ensnared 1.15 million victims, who lost an estimated 38 billion yuan (S$7.7 billion).
The more than $27 million recovered by the CAD had been transferred to Singapore for the planned purchase of a $23.8 million Sentosa Cove bungalow by Zhang Min, the former president of Yucheng International Holdings, which started Ezubao.
The investigations involved going through piles of hard-copy bank statements and manually plugging numbers into an Excel sheet for analysis.
The CAD seized more than $27 million in May 2016 and eventually established that it was criminal proceeds related to the scam.
The money was returned to China last August after investigations were complete.
"We were very happy with the outcome," said Ms Tan Ruiyun, a 28-year-old senior investigation officer who has been with the branch for six years.
"It is rare to recover such a substantial amount of criminal proceeds. Most of the time, monies would usually be dissipated by the time a police report is lodged."
The case involved two jurisdictions, and this meant close cooperation was needed to get information, added Ms Tan.
The case also set a precedent as it was the first time Singapore had prosecuted a conveyance lawyer and a property agent for failing to sound the alarm over the suspicious transaction of the Sentosa Cove property.
They admitted in court that they knew the buyer had been detained in China in relation to the Ponzi scheme but did not fulfil their obligations to file a suspicious transaction report, even though they suspected the money used could have stemmed from criminal proceeds.
Meanwhile, in China, the 26 individuals involved in the Ponzi scheme, including Zhang, were sentenced to between three years' jail and lifetime imprisonment in 2017.
While investigation work might be tedious and time-consuming, it is worth it, said senior investigation officer Wong Kean Yong, 27.
"The convictions also demonstrate our commitment to ensure our financial systems are not abused by criminals," he said.
Mr Muhammad Imran, who has been with the unit for nine years, said a constant challenge for the CAD is that it is dealing with "thinking criminals".
"They are smart. And we have to constantly outsmart and out-think them. They might be one step ahead, but we will always work to match that."