SINGAPORE - Kevin Michael Swampillai, the former head of wealth management services at BSI Bank's Singapore branch, and his accomplice, Samuel Wu, have been slapped with stern warnings in lieu of prosecution for several cheating and abetment charges in relation to the 1Malaysia Development Berhad (1MDB) scandal.
The scandal, which sparked a massive global probe over billions of dollars misappropriated from the Malaysian state fund, dates to the government of former Malaysian prime minister Najib Razak, which set up 1MDB in 2009.
In the latest development in Singapore, stern warnings were issued between October and December 2021 against Swampillai, in lieu of prosecution for four counts of cheating BSI Bank, and against Wu, who was known as Samuel Goh Sze-Wei, in lieu of prosecution for four counts of abetment.
The Singapore police, in a statement on Friday (Jan 28), said this decision was taken after considering the two men's full cooperation with the authorities throughout the probe. Swampillai, who had overseen the bank's advisory and wealth management businesses with the subsidiaries of 1MDB, and Wu had disclosed their secret profits arrangement and disgorged the illicit profits they received, including voluntarily repatriating overseas-held assets to Singapore.
BSI Bank's Singapore unit was shut down in 2016 for its role in the scandal, and the Swiss bank paid a composition penalty of $13.3 million.
The Commercial Affairs Department found that between 2012 and 2013, Swampillai and his then colleague, Yeo Jiawei, assisted the 1MDB subsidiaries to invest assets through subscriptions into three funds, the police said.
The 1MDB subsidiaries would pay annual management fees to the respective investment managers of the funds.
Swampillai and Yeo subsequently devised a plan to obtain a cut of the management fees paid by the 1MDB subsidiaries for themselves and without the knowledge of their then employer, BSI Singapore.
They enlisted Wu, who then incorporated an intermediary company, Bridge Global Managers, which entered into secret agreements with the funds' investment managers and was to be paid a share of the management fees as referral fees, the police said.
Wu then distributed the resulting payments received by Bridge Global Managers among the trio.
Although Wu was not a financial advisory services representative at the time he participated in the secret profits arrangements, the Monetary Authority of Singapore (MAS) will take his conduct into account in assessing any of his future applications to be a representative, the police said.
In 2016, Yeo was prosecuted for cheating and attempting to pervert the course of justice by asking Swampillai and Wu to lie that the distributions made by Bridge Global Managers were Wu's investments.
Yeo was convicted after trial in December 2016 for witness tampering. In July 2017, he pleaded guilty to cheating and money laundering charges, for which he was sentenced to 54 months' imprisonment.
Meanwhile, in December 2020, Goldman Sachs Singapore was fined US$122 million (S$165 million) for its role in the 1MDB bond offerings corruption scandal. The MAS also issued lifetime bans against Swampillai, a Malaysian, in October 2020, and against Yeo in December 2017.
In December 2021, the Singapore authorities filed further court applications to return $10.3 million of seized 1MDB-related monies to the Malaysian government. These applications have been granted by the court, and the monies have been transferred to the Malaysian government.
To date, Singapore has repatriated a total of about $88 million of seized 1MDB-related monies to the Malaysian government.
In Malaysia, Najib is facing five trials, mostly related to the scandal, and has been convicted in one case. In August 2020, Najib was found guilty of seven charges of abuse of power, criminal breach of trust and money laundering over the misappropriation of RM42 million (S$13.6 million) from SRC International, a former subsidiary of 1MDB. He was sentenced to 12 years in jail and fined RM210 million. He remains free on bail pending appeal.