SINGAPORE – A crime syndicate member who ran the operations of a shell company was responsible for the forging of more than 180 invoices, falsely stating that it had made at least $56 million in sales.
As a result of offences linked to Nagore Trading, fraudulent input tax claims totalling nearly $8 million were made to the Inland Revenue Authority of Singapore (Iras).
Investigations indicate that while Iras was able to detect and withhold a portion of these claims, it paid out a substantial amount of goods and services tax (GST) refunds.
Alvin Chua Han Soon, 44, was on Monday jailed for four years after he admitted that he was involved in the carrying on of the firm’s business for a fraudulent purpose – an offence under the Companies Act.
The court heard that given the scale and complexity of the matter, Iras took a sample of 41 transactions traceable from Nagore sales invoices to exporters that made input tax claims.
“For these 41 transactions, the exporters had made input tax claims amounting to $972,228.94, for which Iras had paid out $772,188.54,” said the prosecution.
According to Chua, his total profit for his role in the ruse was between $36,000 and $72,000. He has made no restitution.
One of his accomplices, Lee Chong Hoong, 42, was sentenced to three years’ jail in October.
The cases involving alleged accomplices – including Wong Meng Fai, 44, and Ang Chee Keong, 46 – are pending.
Deputy Public Prosecutors Tay Jingxi, Eric Hu, Matthew Choo and Joshua Phang stated in court documents that Nagore Trading was part of a GST missing trader fraud scheme that operated between Feb 4, 2015, and Jan 28, 2016.
Nagore Trading, a shell company with no real business operations, was set up to generate false invoices to create an impression that it had paid local suppliers for goods and sold them to other firms.
These buffer companies that Nagore “sold” goods to were in on the scheme. They forged invoices to other businesses involved, though there was no actual trade.
The DPPs said: “At the end of the chain of buffer companies, the masterminds of the Nagore scheme would approach an exporter and sell the purported goods to them, for export overseas to a purported buyer that was arranged by the masterminds.”
The exporters then paid the buffer companies the selling price of the goods with GST included, which made up the source of the scheme’s criminal proceeds.
Not knowing that the transactions were a sham, the exporters then claimed GST refunds from Iras.
In August 2018, an Iras investigation officer lodged a police report, stating that it had started investigations into various entities, including Nagore Trading.
On Monday, the prosecutors said that even though Chua was not a mastermind of the scheme, he had played an important role. They urged the court to sentence him to at least four years’ jail.
For his offence under the Companies Act, Chua can be jailed for up to seven years and fined up to $15,000.