SINGAPORE - He was the mastermind behind a scheme that deceived two banks into disbursing more than $4.2 million into accounts controlled by him.
Justin Goh Hanshi was jailed for 39 months' on Tuesday (July 26) after he pleaded guilty to five cheating charges and seven counts under the Securities and Futures Act.
Another 21 charges were taken into consideration during his sentencing.
Deputy public prosecutors Suhas Malhotra and Sarah Thaker said in court documents that Goh had instigated three individuals - Joel Aloysius Choy, Alwin Song Zhiqian and Jacinta Hong Huihui - to open share financing accounts with Maybank and the Bank of East Asia (BEA).
Around November 2012, the banks offered share financing facilities. To limit their exposure, they imposed limits on how much an individual could borrow through these facilities by pledging any single company's shares.
The prosecution said: "Justin was aware that if he opened share financing accounts with BEA and Maybank in his own name, he would have been subject to the (limits). In order to circumvent these limits and maximise the loans he could obtain, Justin approached the nominees and asked them to apply for share financing accounts with the banks."
Goh arranged for shares from a company called Skyone to be transferred to accounts belonging to the trio, to be pledged to the banks as collateral.
Skyone provided logistics services including express land transport, international airfreight and packaging, and its stocks were traded on the Singapore Exchange.
As a result of Goh's scheme, the banks were deceived into believing the account holders had effective control over the share financing facilities, and that the Skyone shares pledged were owned by them.
Hence, the banks were tricked into disbursing a total of more than $4.2 million into the accounts.
On Oct 28, 2013, Skyone shares that opened at 46 cents fell drastically to 4.3 cents, prompting the banks to sell the shares pledged under the facilities, with $779,845 still owed to them.
Earlier, between September and October 2013, Goh had directed three trading representatives - Tan Chye Kok, Wong Leng Pheng and David Luman James - to push up and maintain the price of Skyone shares.
On Goh's instructions, they used 15 trading accounts belonging to their family, friends and clients to buy and sell the shares for Goh's benefit and to push up and maintain the price of the shares.
Goh promised to pay them for any losses incurred from the trades and said they would profit from the commissions earned on the trades.
Goh used another 12 trading accounts from his family and friends to conduct trades for his own benefit.
Tan, Wong and James were each jailed for up to three months and two weeks after pleading guilty to charges for unauthorised trading.
Choy was sentenced to eight months' jail in February this year after pleading guilty to one charge of cheating.
Court proceedings against Song and Hong, who are facing cheating charges, are under way.