SINGAPORE - Two people in the Keppel Club membership scam involving $37.5 million were sentenced to jail on Wednesday (Jan 10).
Nah Hak Chuah, 67, who was a supervisor at the club's membership department, was given three years' jail while Ivy Cheo Soh Chin, 67, was jailed for 4½ years.
Nah, who will start his sentence on Jan 15, admitted to 30 of 1,280 charges of falsifying accounts over a 10-year period, while Cheo, a friend of mastermind Setho Oi Lin alias Setho Irene, 70, pleaded guilty to 20 of 303 charges of money laundering.
Cheo, a club member working in a private company until she retired in 2012, helped Setho by being a money mule - receiving and transferring the benefits of Setho's criminal conduct, and instigated other people to help transfer the benefits of Setho's criminal conduct.
Setho started working at the club in 1966 as a general clerk and rose through the ranks to become personal assistant to the general manager. She was also in charge of membership matters, and started selling fake club memberships to buyers as early as 2004. She has pleaded guilty and is due to be sentenced on Feb 9.
The club stopped selling new memberships from 1996. Anyone wanting to become a member has to buy the membership from an existing member at a mutually agreed price. The purchase price includes a fixed transfer fee of $12,840 and an account activation fee of $300 to $530, to be paid to the club.
The case involved payments made by 1,341 phantom members.
Setho would tell interested membership buyers that there were Keppel Club memberships available for transfer, when she knew this was false.
To avoid suspicion and discovery of her scheme, she asked Cheo to provide the names and bank accounts of Cheo and her relatives, so that the cheques were not always issued to Cheo.
After buyers' cheques or cashier's orders had been deposited, Cheo would withdraw the money in cash and hand it to Setho.
Setho allowed Cheo to deduct $500 to $1,000 as commission for each transaction.
Deputy Public Prosecutor Hon Yi said Cheo's sentence was warranted. He said she was motivated by greed, and the amount of loss caused by her offending behaviour was staggering.
Cheo's lawyer Wee Pan Lee told Principal District Judge Bala Reddy in mitigation that his client had reached a settlement agreement to repay the club. She has given a cheque for $112,500 to the club's solicitors, and is waiting for her bank account to be unfrozen so that $39,200 can be transferred to the club.
In his oral remarks, Judge Reddy said he could not ignore Cheo's crucial role in the bigger scheme of things in the fraud.
"She had lent her unstinting and loyal support and made a deliberate and conscious choice to participate in the meticulously and carefully executed scheme,'' he said.
As for Nah, the DPP, in asking for at least three years' jail, said his offences struck at the heart of Keppel Club. He had knowingly breached his duty of fidelity to his employer and facilitated the massive fraud perpetrated by Setho.
He was supposed to alert the club management about Setho's wrongdoing, not help in it, said DPP Hon.
"Instead, the accused was instrumental in assisting in the exploitation of the department's mechanisms and processes, and the membership creation process in particular, in order to allow Irene to perpetrate her criminal scheme for more than a decade,'' he said.
He was the main person overseeing the club's computerised membership system, and his offences were an "egregious breach of corporate integrity''.
Nah's lawyer Daniel Atticus Xu said the widower did not benefit financially from his acts.
He said Nah's major depressive disorder went undetected for nine years after his wife died in 2008. He has no children and no contact with his siblings.