Singapore’s central bank, the Monetary Authority of Singapore (MAS), has taken strict action against nine financial institutions involved in the country’s biggest-ever money laundering case. On Friday, MAS announced it had imposed a total of S$27.45 million (about US$21.5 million) in financial penalties.
Largest Money Laundering Case in Singapore’s History Ends in Massive Fines
This marks the end of investigations into how some of the country’s biggest banks and financial service providers failed to detect criminal activity involving over S$3 billion (US$2.2 billion) in illegal funds. The scandal surfaced in August 2023, when ten foreigners were arrested during several police raids across the city-state. These individuals were later sentenced to jail terms ranging from 13 to 17 months, deported after serving their sentences, and banned from returning to Singapore.
The total penalty imposed in this case is nearly as high as the S$29.1 million fine issued during Singapore’s earlier major scandal involving Malaysia’s 1MDB in 2017.
Major Banks and Firms Face Millions in Penalties
Six well-known banks were found to have failed in key responsibilities, including not properly checking where their customers’ money came from. These banks include:
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- Credit Suisse
- UOB
- UBS
- Citibank
- Julius Baer
- LGT Bank
Each of these banks was fined between S$1 million and S$5.8 million.
MAS said that the banks didn’t do enough to check who their customers were or where their wealth came from. In many cases, these customers were involved in illegal online gambling and overseas scams. Some of the dirty money was later used to buy real estate, cars, luxury handbags, and expensive jewellery in Singapore.
Besides the banks, three other financial service firms were also penalised:
- UOB Kay Hian, a brokerage company, was fined S$2.85 million
- Blue Ocean Invest, an asset management firm, was fined S$2.4 million
- Trident Trust Company Singapore, which offers fund and trust services, was fined S$1.8 million
These companies, like the banks, failed to follow proper checks and monitoring procedures, which allowed suspicious transactions to go unnoticed.
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MAS said it found that these financial institutions did not carry out proper customer risk assessments and failed to monitor strange or suspicious transactions. Some of them also struggled to trace the true source of their customers’ wealth.
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After the inspections, all nine companies have promised to fix the issues. MAS confirmed it will keep a close eye on how they follow through with improvements.
MAS also issued prohibition orders against four individuals. These orders stop the individuals from working in any job that requires approval from the financial regulator.
In response to the fines:
- UOB said it had taken fast action in the past two years to improve its risk checks and had invested a lot in new systems to catch suspicious activity.
- UBS, which took over Credit Suisse in March 2023, said it accepted the findings and had fully cooperated with authorities.
- Blue Ocean Invest shared that it had helped with the investigation and had already strengthened its rules and procedures.
- Trident Trust Company Singapore also said it had worked closely with MAS and has started fixing the problems.
However, some institutions, including Citibank, Julius Baer, UOB Kay Hian, and LGT Bank, did not provide any comments to the media following the announcement.
In August 2023, two former bankers from Citi and Julius Baer were charged for helping the money launderers by forging fake documents. These included fake tax papers and loan files.
Following this massive case, the Singapore government has been working on stronger laws to make it easier to catch and charge people involved in money laundering.
In June 2024, authorities listed the banking sector as Singapore’s highest-risk area for money laundering activities, signaling the importance of tighter rules and checks in the financial industry.