Jailed ex-lawyer Jeffrey Ong ordered to pay $6.58m he misappropriated from escrow account

SINGAPORE – Disbarred lawyer Jeffrey Ong Su Aun, who is serving 19 years in jail for

misappropriating $76 million from his firm’s client accounts,

has been ordered by the High Court to pay $6.58m to one of the victims whose funds he siphoned.

Airtrust (Singapore), an oil and gas logistics services company which is being wound up, filed a civil claim on Sept 13, 2023, against Ong, who was the managing partner of JLC Advisors, and four others to recover its loss.

The four other defendants are: JLC Advisors; Mr Vincent Lim Puay Chong, a founding partner of the firm; Mr Robin Heng Hui Kiak; and Mr Perakiat Siriluethaiwattana.

The bulk of Airtrust’s misappropriated funds were allegedly used to finance Mr Heng’s and Mr Perakiat’s participation in the share placement of now-delisted company Allied Technologies.

Airtrust, which is represented by Mr Daniel Chia of Prolegis, applied for default judgment against Ong, following his failure to file the required document to respond to the suit within 14 days after the court papers were served on him.

On Oct 5, default judgment was entered against Ong, who was ordered by the court to pay $6,585,000 to Airtrust, in documents seen by The Straits Times.

The court also declared that Ong was liable to account to Airtrust for the sum on the ground of his breach of fiduciary or equitable duties.

JLC, Mr Lim and Mr Heng have separately filed their defences to the lawsuit, while the court has given approval for Airtrust to serve the papers on Mr Perakiat in Thailand.

Ong had misappropriated money from five victims, including Allied Tech and Airtrust.

He personally gained $7.2 million, which he paid to himself, used to repay his personal loans, or paid to his business associates to compensate them for failed investments that he had suggested.

He fled to Malaysia on May 13, 2019, but was arrested by Malaysian police at a hotel in Kuala Lumpur on May 29, 2019, and subsequently escorted back to Singapore.

He was struck off the rolls in September 2022.

In July 2023, he was given the longest jail term ever meted out to a lawyer in Singapore.

Airtrust’s lawsuit relates to a sum of US$4.85 million (then S$6.58 million) that was held by JLC in an escrow account.

Escrow is an agreement where a third party holds money on behalf of two or more parties that are in the process of completing a transaction.

On Sept 14, 2017, Airtrust and another company, Wrangwell, entered into an escrow agreement with JLC to hold the proceeds of a settlement. Ong was the lawyer in charge of the account.

In the same month, Allied Tech, which was then listed on the Catalist board, had sought to raise $33 million by issuing shares at five cents apiece.

JLC was appointed as the escrow agent to hold the funds until Allied Tech, which makes precision stamped metal parts, authorises it to release the money.

In October 2017, Ong was contacted by Allied Tech director Kenneth Low Si Ren, who told him that there was a shortfall of funds in the first tranche of the placement exercise.

Ong then decided to misappropriate funds from the Airtrust-Wrangwell escrow account to cover the shortfall.

On Oct 23, 2017, on his instructions, a JLC staff member converted the entire sum to Singapore dollars and deposited the $6.58 million into another account.

The next day, two cashier’s orders for $3.2 million each were issued in favour of OCBC Securities, which was the placement agent.

Airtrust contended that the cashier’s orders were credited to Mr Heng’s and Mr Perakiat’s accounts with OCBC Securities.

Each man received 64 million Allied Tech shares in the placement exercise.

On April 23, 2018, Ong instructed a staff member to remit $185,000 from the escrow account to a company called Brilliant Tech Construction. The documents authorising the transfers were signed by Ong and Mr Lim.

Airtrust discovered the misappropriation in May 2019 after the Law Society of Singapore said it was intervening in JLC’s client accounts.

In its lawsuit, Airtrust alleged that JLC was in breach of the escrow agreement by making the transfers to Mr Heng, Mr Perakiat and Brilliant Tech.

It asserted that Mr Lim had failed in his duty to safeguard clients’ monies when he co-signed the transfer documents without verification or asking further questions.

Airtrust claimed that Mr Heng and Mr Perakiat had been unjustly enriched at its expense and, thus, are liable to make repayment of $3.2 million each.

The company also contended that the two men knew the money was given to them in breach of trust.

In its defence, the now-dormant JLC emphasised that Airtrust was not its client and pointed to its “limited” contractual duties as an escrow agent.

Among other things, the agreement stated that the escrow agent has no duties or liabilities, whether as a fiduciary or a trustee, to either party in relation to the monies.

Mr Lim’s defence stated that before he signed the forms to release the sums, he had approached Ong to clarify the requests. He said he was shown supporting documents and had no reason to doubt their legitimacy.

Mr Heng admitted that he received 64 million shares for $3.2 million, but denied that the money was part of the sums misappropriated from Airtrust’s escrow account. He denied that he had knowingly received money that had been transferred in breach of trust.