What shocked us, even more, was the amount of assets seized doing the raid – they included properties, cash and hard assets like luxury cars, designer watches and bags. The total value was worth almost SGD 1 billion!! Here in law-abiding S’pore? Whoa!!!
Whatsapp chat groups were buzzing on Wed as everyone was shocked that these activities were happening under our noses all along. Our neighbourhood chat group recounted about the Tuesday morning raid by officers dressed in black in 20 cars and vans circling a GCB (Good Class Bungalow) within our area. It was later discovered that the accused had jumped from the 2nd floor and hid in a drain outside to try to escape arrest. A photo of an injured man being captured by men dressed in black was shared by a neighbour who was just staying across the road.
Daily news updates of the evolving case continue to provide more information on the 10 that were arrested. They were all originally from Fujian, China and some are related by blood. A number had foreign passports in obscure countries where there can be easily obtained after providing minimal cash applications.
As of today, a total of 105 properties were hit with the prohibition of disposal orders as investigations are ongoing. They include 7 detached bungalows in Sentosa, 79 condominium units (19 under construction) and 19 commercial/industrial spaces with an estimated worth of SGD 831 million.
As part of the seized assets, we are learning about the names of watches that can cost $7 million and ladies’ handbags worth more than $250k which we ordinary folks have never heard about. Collectables like plastic designer bears called Bearbricks? It is mind-blowing to know what too much money can buy nowadays…
Two main questions remain and will probably be answered over the weeks to come. Firstly, where were the funds from, the source of all their wealth? There are currently talks of money laundering operations and online investment scams as possible sources. The second question would be: What caused the authorities to kickstart this massive operation? Was it data from the banks or a major tipoff?
The various seized assets point the finger at money laundering activities. Typically, this process involves 3 main steps: Placement, Layering and Integration. During the placement stage, illicit funds will be introduced into the financial system. This could be via cash deposits or high-value assets. In the layering stage, the funds will be moved through a series of transactions and financial instruments to “wash and clean” them. This could be in the form of transfers between accounts and the use of offshore companies. Finally, in the integration phase, this laundered money is reintegrated into the legitimate economy via investments or purchases.
The suspects had been spending money living the high life, renting GCBs for SGD 100 to 150k per month and keeping a cellar of expensive wines, buying top-end watches, handbags and collectables. They seemed to have endless amounts of funds to spend quickly in order to legitimize the ill-gotten monies from various sources. All these actions look and smell like typical money laundering moves we have seen many times in Mafia movies LOL.
This is a huge enterprise of resourceful and connected individuals who are helping shadowy participants clear large sums of money from their illegal activities by buying into hard assets. They can probably sell them at a later stage to recycle the newly cleaned funds into the financial system. The haircut or loss incurred by flipping the assets is an acceptable cost of money laundering. If the assets actually appreciate in value, then it is an additional bonus for them.
Thanks to Covid, we have seen hard assets like property and collectables rise in price over the last 3 years. Now we know that the money launderers were also involved in the rush to buy them up. S’pore saw record monthly GCB rentals shoot up to 150k as property sales also reached new highs in the luxury market. New reports point to transaction data of this gang buying up property since 2017.
Given that the 10 arrested were all originally from Fujian, one could safely conclude that the criminal activities started from there. It could then have begun to branch off globally as evidenced by their secondary passports from lesser-known countries where citizenship can easily be bought.
China had always had an issue with its citizens trying to bring money out of the country as the nation prospers. Many had been spending money buying property and insurance policies in HK. Cryptocurrencies were another avenue where funds could be converted and wired out immediately. The authorities shut down onshore cryptos a few years ago and tightened funds export restrictions. Each individual cannot take out more than USD50k per year. The Chinese mafia has also moved to China-friendly countries like Cambodia to set up scam investment bucket shops using USDT to cheat victims online.
This recent case this week seems to be linked to all the above illegal funds inbound to S’pore. Authorities will now heavily investigate the banks that had allowed these funds to come into the country, checking on KYC (Know Your Client) and AML (Anti-Money Laundering) policies within the financial institutions. STR (Suspicious Transaction Reports) as required by MAS will also be scrutinized carefully.
And why did the authorities do the raid this week? Were they preparing this for a while as they built up the data of this criminal gang for months or was it based on a tipoff? There are a number of theories floating around which we may never know the true reason. I would like to postulate one though.
China had been trying for years to halt or slow down the leakage of money from its citizens from onshore to overseas as the country prospers. Its RMB is a controlled currency that makes it harder to remit overseas. A few years ago, they have to clamp down on the crypto market to stop the outflow. Presently, there is an annual restriction of USD50k per person per year.
I suspect that it knows of shadow criminal gangs like the one arrested this week that continue to do money laundering on a large scale via various means. Previously, China send teams overseas to grab such people back to the motherland and bring them to justice in the Chinese courts. This has resulted in bad global publicity as the illegal abduction of its citizens globally attracted negative press coverage.
Maybe they have analysed their actions and have decided to change their strategy. What if they approach the countries with hard evidence of wrongdoing instead? The governments would have no choice but to react to protect their security and sovereignty. This one-stone kill 2 birds strategy sounds logical as it is a win-win outcome.
China gets to shut down the gangs without lifting a finger and countries like S’pore show that they are intolerant of criminal activities on our shores. This looks like the future modus operandi. There was another report this week of the same actions in Sydney of the arrest of a Chinese gang doing the same thing. Sounds familiar? What do you think?
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