Banks tighten vigilance and processes following $3b money laundering case

SINGAPORE – Local banks have beefed up oversight around money laundering risks, with one lender reassigning a banker involved in a recent high-profile case to a non-client-facing role. The extra scrutiny is in response to the largest money laundering incident encountered here.

This involved

around $3 billion in illicit funds

being washed through at least 16 financial institutions by a group from China’s Fujian province who used multiple passports to avoid detection.

The scandal exposed critical weaknesses, with breaches due to poor implementation of policies and controls that in turn highlighted the vital role of gatekeepers – from individuals to banks and corporate secretarial firms – in preventing financial crimes.

The Monetary Authority of Singapore (MAS) said on July 4 that it found shortcomings in the assessment of a customer’s risk and source of wealth and the monitoring of suspicious transactions, and inadequate risk mitigation measures.

Penalties amounting to $27.45 million were imposed on nine financial institutions on July 4.

UOB, which was hit by $5.6 million in penalties – the second highest after the former Credit Suisse Singapore branch – said it has reviewed the issues and staff involved and addressed accountability and discipline issues.

Mr Leonard Tan, former team head of group retail privilege banking at UOB, resigned in January 2023.

UOB also conducted extensive internal investigations and determined that there was no wilful misconduct by Mr Alvin Ang, also a former team head of group retail privilege banking. Mr Ang has been “reassigned to a non-client-facing role”.

The bank has implemented remedial actions over the past two years to address the deficiencies highlighted in an internal review.

These include bolstering transaction monitoring and customer due diligence processes, and taking steps to ensure anti-money laundering measures are consistently and rigorously applied.

The bank has also invested in technology and other resources to enhance its fight against financial crime.

Employee training has been ramped up to ensure that staff meet the required standards of integrity, values and professional conduct. 

“All these are part of our continuous efforts to detect and respond more quickly and effectively to risks,” UOB said.

UBS, which completed its merger with the former Credit Suisse in 2024, acknowledged the MAS findings.  The Swiss banking giant faces penalties of $3 million for its part, while the former Credit Suisse was hit with the highest penalty of $5.8 million.

UBS said it has cooperated fully with the authorities and they “will continue to work together closely to safeguard Singapore’s financial industry”. The Straits Times understands the penalties for Credit Suisse will be collected from UBS Singapore.

Julius Baer’s Singapore branch, which was levied $2.4 million in penalties, has moved to strengthen its anti-money laundering framework.

Its former relationship manager Liu Kai was charged on Aug 15, 2024, over allegedly facilitating the movement of illicit funds in the case.

LGT, a private bank owned by Liechtenstein’s royal family, was slapped with $1 million in penalties.

Trident Trust Company (Singapore), which faces $1.8 million in penalties, said a detailed plan to address the breaches has been implemented. It did not elaborate on it.

Asset management firm Blue Ocean Invest, which was penalised $2.4 million, said it has implemented measures to enhance internal policies and procedures.

Citi’s Singapore spokesperson said the bank has strengthened its client onboarding and monitoring processes.

Its former banking relationship manager Wang Qiming indicated his intention to plead guilty to 10 charges, including money laundering and forgery, during a court appearance in December 2024.

Wang’s clients at the bank included two of the 10 convicted money launderers – Su Baolin and Vang Shuiming – in the $3 billion case.

Prosecutors said that, around December 2020, Wang allegedly abetted Su in making a false loan agreement to deceive Standard Chartered Bank about the source of a deposit made into Su’s bank account.

He also allegedly forged a loan document between April 19 and 25 in 2021 to deceive Citibank about the source of Vang’s funds to allow a deposit of $999,980 into his account.

Citi sacked Wang in April 2022.