SINGAPORE - Over a period of 10 years, a supervisor of Keppel Club's membership department duped 1,341 people into believing that they had paid for membership at the club, even issuing them with cards which allowed them use of the facilities.
In all, the buyers forked out a total of $37.5 million for club memberships from 2004 to 2014, which included transfer fees of $17 million. The amount was supposed to be paid to Keppel Club.
On Thursday (Nov 30), the supervisor, Nah Hak Chuah, and a club member, Ivy Cheo Soh Chin, both 67, were convicted for their roles in the membership scam.
Nah, who faced 1,280 charges of falsification of accounts, admitted to 30 charges of making false entry in the electronic membership database in the Club Management System (CMS) while Cheo admitted to 20 of 303 charges of money laundering.
The alleged mastermind, Setho Oi Lin alias Setho Irene, 70, who faces 3,181 charges, will go on trial on Dec 4.
Setho had worked in the club for nearly 48 years, and rose through the ranks. She moved to the membership department in 1981 and was a personal assistant to the general manager, the person in charge of membership transfers, enrolments, resignations and queries.
Deputy Public Prosecutor Ian Ernst Chai said that the offences came to light following a report by Keppel Club's general manager on Aug 13, 2014 that both Nah and Cheo had cheated people into buying club memberships from phantom members.
Instead of paying the club, these buyers were directed to pay the purchase price and transfer fee to third parties.
Since 1996, anyone who wishes to become a member has to buy the membership from an existing member at a mutually agreed price.
The purchase price would include a fixed transfer fee of $12,840 and an account activation fee ranging from $300 to $530 across the years, both to be paid to Keppel Club.
The balance of the purchase price, after deductions to Keppel Club are made, would go to the existing member who is selling the membership.
As of August 2014, the club had 2,682 legitimate members.
DPP Chai told Principal District Judge Bala Reddy that Setho allegedly started selling fake club memberships from 2004.
She would source for interested buyers on her own or inform membership agents that she had Keppel Club memberships for sale.
These agents would then source for buyers and put them in touch with Setho who knew that in fact, none of the memberships would be transferred from existing ones.
Some time between June 1 and Aug 1, 2014 Setho instructed Nah to create new membership accounts for 1,280 buyers in the club's CMS. These buyers had been duped into buying club memberships from phantom members.
Nah knew that the new membership accounts to be created were false, but still created entries in the system without a corresponding deactivation of any existing member's account.
Nah used information in the membership application forms which contained the buyers' information and phantom sellers' names.
These buyers or their nominees were able to enter Keppel Club and make use of club facilities as they were issued with membership cards. Their details had also been entered in the CMS system.
Cheo was Setho's friend. DPP Chai said that Cheo was actually working as a manager with a different company between 2004 and 2009, and continued to help out there on an ad hoc basis until she retired in February 2012.
She was roped in by Setho who allegedly used her to receive the payment for the membership transfers. The prosecution's case is that Setho also had the buyers transfer monies to others including Cheo's daughter, mother and brother-in-law who were never members of the club.
Setho allegedly asked Cheo to provide the names and bank accounts of the three persons to avoid suspicion, so that the cheques were not always issued to Cheo.
After the cheques or cashier's orders had been deposited into the payees' bank accounts, Cheo would withdraw the cash and hand it to Setho, who allegedly allowed Cheo to deduct $500 to $1,000 as commission for each transaction.
From Feb 23, 2010 to July 31, 2014, Cheo helped Setho transfer $6.1 million and kept at least $151,500 as commission payments.
Nah's lawyer Daniel Atticus Xu and Cheo's lawyer Wee Pan Lee sought an adjournment on Thursday. Mr Wee said his client wishes to make restitution.
They will return to court on Jan 10.