Lawyer penalised over $2.7m fund transfers for foreign entities

PHOTO: ST GRAPHICS

A lawyer of 18 years, who failed to do the necessary checks before carrying out a series of fund transfers totalling about US$2 million (S$2.7 million), was yesterday suspended from practice for two years and fined $100,000.

The punishment for professional misconduct was handed down to Mr Allen Chan Chun Hwee by the Court of Three Judges, the highest disciplinary body for the legal profession.

Mr Chan, the sole proprietor of C H Chan & Co, acted for two foreign entities that remitted money to his firm and then told him to transfer the funds to others.

In 2008, about US$200,000 was transferred for the Institute of Business Management and Financial Services. In 2011, about US$1.8 million was transferred for Investment Suisse.

Mr Chan took a 5 per cent cut from the remittances for his fees.

Eventually, he was asked by the bank why the client was effecting these transactions through him instead of directly to the recipients.

In 2014, an anonymous complaint was lodged with the Law Society, accusing Mr Chan of aiding money-laundering activities.

The Law Society, represented by Mr S.H. Almenoar, brought charges against Mr Chan for failing to verify the identities of the people behind the entities and for failing to obtain satisfactory evidence as to the nature and purpose of his clients' business relationships with the recipients.

After Mr Chan pleaded guilty to breaching professional conduct rules, a disciplinary tribunal found the case serious enough to be referred to the court for punishment to be meted out.

Yesterday, the court, led by Chief Justice Sundaresh Menon, said the breach was not merely a technical one but "a substantial breach by a solicitor who allowed his client to... take advantage of the cloak of respectability that was afforded by having the solicitor effect those transfers".

The court noted that Mr Chan had carried out the transactions without asking why he was being asked to do so "when this question cried out to be answered".

Due to a procedural issue, the court took into account only the 2011 transactions, from which Mr Chan earned fees of about US$90,000.

A version of this article appeared in the print edition of The Straits Times on September 30, 2017, with the headline 'Lawyer penalised over $2.7m fund transfers for foreign entities'. Print Edition | Subscribe