SINGAPORE - The director of a corporate service provider was jailed for six weeks on Friday (March 25) after four companies he provided corporate secretarial and nominee director services for received criminal proceeds linked to scams.
The Singapore Police Force said in a statement on Friday (March 25) that Chai Chung Hoong, a 36-year-old Singaporean, was found guilty of four counts of failing to exercise reasonable diligence in the discharge of his duties as a director of four Singapore-registered companies.
"As a result of Chai's failure to exercise any supervision over the companies, the companies' bank accounts received criminal proceeds totalling US$558,404.67 (S$757,000) between December 2012 and February 2013.
"The criminal proceeds were linked to business e-mail compromise scams and Internet love scams involving multiple local and overseas victims."
Chai was the director of 3E Accounting, a corporate service provider.
The police said an individual known only as "Florina" contacted Chai sometime around August or September 2012 to engage 3E Accounting's corporate secretarial and nominee director services for four companies that were incorporated between June and July 2012 through another corporate service provider.
Chai agreed, and was appointed as the corporate secretary and local resident director of the four companies on October 2, 2012.
"Before being appointed as the director of the four companies, Chai had neither met nor contacted any of the foreign directors and shareholders of the four companies," the police said, adding that he failed to conduct any background checks on the stakeholders and the companies' business activities.
Chai also did not take any steps to verify the identity of Florina, nor check if she was authorised to represent the foreign directors.
"For the period he was a director of the four companies, he did not take steps to exercise any supervision over the companies' activities," the police said.
Instead, Chai sent the bank tokens and banking documents of the four companies via courier to foreign addresses in Lebanon at Florina's behest.
None of the foreign directors or shareholders resided in Lebanon, added the police.
Chai did not receive any of the scam proceeds.
Those found guilty of failing to exercise reasonable diligence in the discharge of a director's duties can be fined up to $5,000 or jailed up to 12 months.
The police advised: "Individuals should not agree to be appointed as a director of a company which they have little or no information about.
"Should a director not exercise any supervision over the company's affairs, the company may be used to facilitate illicit activities, such as the laundering of criminal proceeds."