Some $37 million is said to have been lost in an alleged membership fraud at Keppel Club, as a result of fake transfers and the duping of applicants into paying someone else, when they thought they were paying the club, according to a probe report.
As of last month, "irregularities" were detected in 1,340 membership transfers at the club spanning a decade from 2004, said the report. Singapore's oldest country club, Keppel was rocked last year by revelations of the fraud, which led to the sacking of the alleged principal culprit, a 67-year-old woman who started as a clerk in 1966 and rose to supervise its membership department.
The estimate was calculated based on the rolling average of historically transacted prices of the club's memberships, said court documents filed by Keppel earlier this month.
Keppel had appointed the DHA+pac firm last November to conduct forensic investigations into areas including the modus operandi and extent of the fraud, as well as the potential damage and loss suffered by the club.
Among other things, the affected membership transfers were not mentioned at management meetings by the alleged culprit.
Applicants who sought to join the club were directed to the 67-year-old, who would prepare a form with the genuine details of the applicant. But when it came to details of the person transferring his or her club membership, she would allegedly fill in a fabricated name, or the data of former members instead. She would also fabricate a signature for the purported transferor.
The club stopped issuing new memberships in 1996, but a membership could be bought from someone willing to sell his membership through the club.
Based on the probe findings, Keppel has hired a team of Lee & Lee lawyers led by Mr Julian Tay to sue the woman and six others, to account for the damages.
A High Court pre-trial conference is due next month.
Signs of something being amiss first emerged when the woman, who oversaw the membership department for more than 30 years, expressed strong resistance when management suggested in 2013 that someone understudy her. The woman had already passed 62 years of age in 2009.
She reluctantly agreed, but insisted on retaining control over membership transfers, claiming the complex job would require at least two years for her successor to take over. The club then promoted an assistant manager in July last year to understudy her.
But the assistant uncovered irregularities in the membership records. Among other things, she found two membership files that were started last year, but had no records of payment of transfer fees in relation to the purported membership transfers. The signatures of the purported transferors were also strikingly identical.
She also found that the names and details of these supposed members were not found in the club's membership database.
Discreet checks and prompt internal investigations followed.
When queried by the general manager on the irregularities in nine membership files which showed no record of transfer fee payment, the 67-year-old failed to give a proper explanation.
Within the next few days, the club received seven cashier's orders and two cheques for the purported payment of the nine membership files which the alleged culprit was asked about earlier.
But four of the cashier's orders had consecutive reference numbers, suggesting that they were issued by the same person. The orders were also issued days after the suspect was first queried by the general manager. The club later lodged a police report.
The club has since been informed that its former employee is currently being investigated by the police for possible offences, said the court documents filed.