Jail for man over tax fraud that caused Iras to lose more than $2m

SINGAPORE - He took part in a case of fraud involving a syndicate that exploited the Goods and Services Tax (GST) system, causing a loss of over $2 million to the Inland Revenue Authority of Singapore (Iras).

The prosecution said that Francis Tan Nuan Seng’s offences were linked to “voluminous paper trails of sham transactions, purportedly made by several shell companies for fraudulent claims of input tax”.

Separately, he also misappropriated $39,500 in cash.

On Sept 23, the 48-year-old Singaporean was sentenced to four years and two months’ jail after he pleaded guilty to one count each of fraudulent trading, criminal breach of trust, and forgery.

One of his accomplices, Kelvin Yeo Soon Teck, then 42, was

sentenced to five years’ jail in February.

Deputy public prosecutors Eric Hu, Matthew Choo and Lee Da Zhuan told the court that though Tan played an important role in the syndicate, he was not the mastermind of the scheme.

The DPPs added that the masterminds were Vietnamese Trinh Tien Dung, also known as “Don”, and Singaporean Luke Giam Zi Hin, 41.

Court documents did not disclose the outcome of the cases involving the pair.

The ruse involved a firm called M_Solution Trading (MSTPL), with Dung directing its operations, the prosecution said.

According to court documents, he also directed the operations of another firm called Crescendo Hardware Trading (CHTPL).

In 2015, Tan met Dung who told him about the scheme and the Singaporean agreed to be part of it.

In

a joint statement in September 2023,

the police and Iras said that in a typical arrangement under such a ruse, a group of businesses would form a supply chain through which goods are sold.

Meanwhile, the goods sold down the chain are purportedly exported by the last seller in the chain.

Since exported goods are exempt from GST, the last seller does not collect GST on the exports.

Instead, it claims a refund from Iras, causing a loss to the State if the ruse is successful.

For the current case, the court heard that MSTPL was a shell company with no genuine business.

It pretended to sell goods to a chain of other businesses, including CHTPL, and collected 7 per cent GST on the “sales”.

After that, MSTPL would go “missing” by failing to account to Iras the GST collected from the “sales”.

The DPPs said: “(Tan) acted on Don’s instructions on the forgery of MSTPL’s sales invoices. Don provided the stock specifications, quantities, prices and customers to be indicated on the forged invoices.”

Tan and Yeo also worked together to forge 90 sales invoices purportedly issued by MSTPL over supposed sales to companies including CHTPL.

Overall, the scheme resulted in the submission of fraudulent tax claims amounting to about $7.53 million to Iras.

From this amount, Iras paid out more than $2 million in tax refund claims. The court heard that Tan received a commission of more than $19,000 for operating MSTPL with Yeo.

In an unrelated case, the sole proprietor of another firm not linked to the ruse issued Tan a cash cheque for $39,500 in 2019 to buy computer servers.

Tan encashed the cheque and used the money to cover his loss arising from operating a pub that has since shuttered.

His bail was set at $70,000 on Sept 23, and he is expected to begin serving his sentence in November.