SINGAPORE - The former director of a Singapore law firm decided to find out more about a "high net worth client" who was buying a house in Sentosa Cove - and discovered she was linked to one of China's biggest Ponzi schemes involving $10.8 billion.
Kang Bee Leng, 56, failed to notify the authorities that a sum of almost $5.5 million involved in the purchase could have been benefits of criminal activities.
Kang, who was a managing director of Sterling Law Corporation during the offence but has since left the firm, was fined $10,000 on Tuesday (April 17) after pleading guilty to the offence last month.
She was legally obliged to alert the authorities about suspicious transactions.
In October 2015, real estate agent Tan Yen Hsi, 37, referred the purchase of a $23.8 million Lakeshore View property to Kang to carry out the conveyancing work.
The buyer was former president of Yucheng International Holdings, Zhang Min, whose firm launched her country's largest online peer-to-peer lender Ezubao.
To find out more about Zhang, the lawyer conducted online checks on the Chinese national and found out the Yucheng Group purportedly provided financial services in China and Hong Kong.
Zhang paid $5,481,180 for items such as conveyance fees to Kang's firm and stamp duties between October and November 2015. However Kang was unable to contact her on Jan 12, 2016 - a day before the scheduled completion of the property purchase.
The lawyer alerted Tan, who told her that according to online news reports, Zhang had been detained by the Chinese authorities.
Deputy Public Prosecutor Ng Jean Ting said: "The accused then did her own online searches to verify this and found news articles to the effect that Yucheng Group was under investigations for fraud in relation to its online peer-to-peer lending platform, and that several suspects had been detained by the Chinese authorities since December 2015."
Some time in March or April 2016, Kang came across news articles in The Straits Times and Business Times, stating that the Ezubao platform was a Ponzi scheme.
"Despite the accused's suspicion that the monies used by Zhang Min for the property purchase could have been derived from the Ponzi scheme, she did not file an STR (suspicious transaction report)," said DPP Ng.
Zhang and 24 others had reportedly been sentenced to between three and 15 years' jail in Beijing over her involvement in financial fraud.
The court heard that the property purchase transaction was not completed as the remaining sum was left unpaid.
Tan appeared in court last November after he also allegedly failed to report the suspicious property deal to the authorities. The pre-trial conference for his case will be held on April 26.
The Straits Times understands Tan is no longer a real estate agent.
Correction note: This story has been edited for clarity.