SINGAPORE - In exchange for cash, a man agreed to be a nominee director at multiple local companies despite being unaware of the nature of their businesses.
Wong Poh Kiong was also told by his alleged accomplice, Tan Hock Keat, that he did not need to be involved in their operations and that he would serve only to fulfil the statutory requirement of having at least one local resident director in Singapore.
The bank accounts of two of these firms - Modelana Trading and Compiko - later received ill-gotten gains totalling over US$2.5 million (more than S$3.4 million at the time of the offences).
Wong, 49, who had failed to exercise any diligence as a director of the firms, pleaded guilty to two charges under the Companies Act and was on Thursday sentenced to five weeks' jail.
Three other similar charges were considered during sentencing.
Wong had earlier told investigators that he was a nominee director at more than 50 companies and earned around $30,000 for taking on the position at the different firms.
An online search with the Accounting and Corporate Regulatory Authority revealed that he is no longer a director at any local firm.
The case involving Tan, 35, who is also known as Darrel, is pending.
The two men got to know each other when they were working in China in 2013.
The court heard that Tan later approached Wong and asked him to be a nominee director for some companies, and the older man agreed.
Deputy Public Prosecutor Yeo Zhen Xiong said: "(Wong) did not keep track of the companies for which he was a nominee director, as there were too many companies."
In October 2016 and February 2017, Singapore's Commercial Affairs Department (CAD) called Wong up for interviews after the bank accounts of several firms linked to him had allegedly received proceeds of criminal conduct.
He later told an investigating officer that he would not take up new directorship appointments.
Despite this, Wong became a nominee director for Compiko in March 2017, and was paid $200 every year for holding the position.
On Nov 7, 2018, CAD received a request from the United States Federal Bureau of Investigation (FBI) for information relating to Compiko's bank account.
DPP Yeo said: "Investigations by the FBI revealed that there was an investment fraud perpetrated against US-based victims... (On June 7, 2017) one David N. Garver Jr was deceived into transferring a sum of US$421,015 to Compiko's DBS account.
"Similarly... (on June 6, 2017) one Darryl J. Egbert was deceived into transferring a sum of US$1.5 million to Compiko's DBS account."
The DPP told the court that the total sum of US$1,921,015 was dissipated via numerous outward wire transfers between June 7 and July 5, 2017.
According to court documents, Tan engaged Wong as a nominee director of Modelana in November 2017.
Wong was also paid $200 each year for holding the position.
On April 22, 2019, CAD received a complaint from an assistant finance manager at Unilever Asia over Modelana's bank account.
The court heard that a company known as Jiangsu Hsintai Chemical S&T Corp was one of Unilever Asia's customers.
The DPP said: "On April 11, 2019, pursuant to a spoofed e-mail asking for payments owed to (Unilever Asia), Jiangsu was fraudulently induced to make a transfer of US$614,443.70 to Modelana's RHB (Bank) account."
After that, the monies were quickly dissipated via transfers to Hong Kong entities within six days.
RHB Bank stated that the amount frozen in Modelana's RHB account was $558.95 on June 6, 2019.
Under the Companies Act, a director who fails to act honestly and use reasonable diligence in the discharge of his or her duties can be jailed for up to a year or fined up to $5,000 for each charge.