A former branch manager of the now closed Falcon Private Bank in Singapore became the first foreigner to be sentenced to prison here over the 1Malaysia Development Berhad (1MDB) scandal.
Swiss national Jens Sturzenegger, 42, was sentenced to 28 weeks in jail and fined $128,000 yesterday after he pleaded guilty to six of 16 counts, including consenting in the bank's failure to comply with Singapore's anti-money laundering rules. The remaining 10 charges were taken into consideration.
Sturzenegger showed no emotion in the dock as the sentence was passed.
He had been charged with failing to report suspicious transactions "even though the system was blinking red as a result of an inexplicable inflow of about US$1.265 billion" into two accounts between March 21 and March 25, 2013, and the supporting documents provided had been called a "joke" and "ridiculous" by his group chief executive.
Sturzenegger, the fifth person to be charged over the 1MDB scandal, obstructed investigations when he lied to the police and the Monetary Authority of Singapore (MAS) about his ties to tycoon Low Taek Jho, better known as Jho Low. Mr Low is accused by the authorities worldwide of being at the centre of alleged massive money laundering linked to 1MDB. It has been alleged that hundreds of millions of dollars were transferred from accounts at Falcon to Mr Low and associates.
Sturzenegger, who had been head of compliance at Falcon's head office, believed he "was the only person at the bank who knew of Mr Low's involvement in the accounts". He also knew Mr Low had been passing himself off as his close business associate Eric Tan Kim Loong, and was the one "orchestrating the transactions" in the accounts.
But when questioned by the police, he feigned ignorance and disavowed any acquaintance with Mr Low. That, the prosecution said, could have misdirected investigations away from Mr Low to Mr Tan, the proxy for the accounts.
"The true state of facts, if known to the MAS, would have added to its adverse inspection findings on Falcon," prosecutors said.
Falcon was shut down by regulators here last October, following similar action against BSI last May. Falcon was accused of "a persistent and severe lack of understanding" of MAS' anti-money laundering regulations and fined $4.3 million.
District Judge Ow Yong Tuck Leong said yesterday he agreed with the prosecution that deterrence should be the primary sentencing consideration. "The MAS must be able to count on the accuracy of statements made by senior executives," he said.
The judge said Sturzenegger "deliberately omitted filing reports on suspicious transactions" despite his obligation to do so, and that his lies to the authorities resulted in a "wastage of public resources". He also noted the underlying value of the transactions was "staggering".
But the judge also noted that Sturzenegger was a "first offender" and had made his guilty plea early, which his lawyer Tan Hee Joek said "saved considerable resources" and reflected his "remorse and regret".
Sturzenegger is married with a young daughter. His wife is working part-time to lighten the family's financial strain after Falcon's closure.