Ex-company director who cheated another firm of over $1.3m gets 5 years’ jail

SINGAPORE - A former director of a shipbuilding company was sentenced to five years’ jail on Monday, after he cheated a financing firm of over $1.3 million by using 10 fake invoices.

Vignish Vijelal, 36, who was working for Lal Marine & Construction (LMC) when he committed the offences, cheated Capital March Platform (CMP) multiple times in 2016 through factoring agreements.

CMP specialises in factoring and LMC was its client.

Each invoice was accompanied by a work order purportedly between LMC and offshore structure builder Keppel Fels.

But there was no contract between LMC and Keppel Fels in relation to the painting and blasting works stated on the 10 work orders.

Instead, for each of the 10 LMC work orders, there was a corresponding genuine work order between another firm – Lal Offshore Marine (LOM) – and Keppel Fels.

LOM was the sister company of LMC at the time of the offences, and Vignish and his father were directors at LOM.

District Judge Marvin Bay had earlier convicted Vignish of 10 cheating charges after a trial.

Before handing down the sentence on Monday, the judge noted that Vignish said in his mitigation plea that he had made repayments totalling more than $400,000, putting the nett loss by CMP after that at over $950,000.

The judge said: “In sentencing for financial and commercial crimes, the quantum of loss is often considered to be a proxy to peg the harm caused by the criminal activity.”

According to the Wallstreetmojo website, factoring is a source of immediate capital. It is a financial arrangement between a financial institution (factor) and a firm (client). A factor purchases trade debts or receivables from a client firm at a discounted price. The debtor therefore ends up paying the factor instead of the original business.

For the current case, the prosecution said that the 10 invoices, which LMC had purportedly issued to Keppel Fels, were submitted to CMP for factoring.

However, Deputy Public Prosecutor Suhas Malhotra said that Keppel Fels did not owe any debt to LMC, adding: “Each of the 10 LMC work orders was forged. There was no contract between LMC and Keppel Fels in relation to the painting and blasting works stated on the 10 work orders.

“The vast majority of the debt owed by Keppel Fels under the 10 LOM work orders had already been paid.”

According to the prosecution, Vignish accepted that LMC had cheated CMP. But he claimed he had been misled by one of his employees, identified as Alexander Francis.

The prosecutor said: “He claims that Francis told him that he had managed to convince Keppel Fels to ‘change’ the work orders from LOM to LMC, such that LMC could collect payment from Keppel Fels, instead of LOM.”

DPP Malhotra said Vignesh’s contention that he was misled by Mr Francis is “wholly illogical”.

The prosecutor said Mr Francis had no motive to cheat CMP, saying that he had no control over LMC’s bank account and stood to gain nothing from the fraud.

“Conversely, the sums delivered by CMP were spent on the accused’s company expenses, the accused and his family’s personal expenses, and large sums were withdrawn by the accused and his brother in cash. The accused thus had a clear motive to cheat CMP.”

Vignish intends to appeal and his bail has been set at $110,000.

For each count of cheating, an offender can be jailed for up to 10 years and fined.