SINGAPORE - A 38-year-old businessman was convicted of cheating the Inland Revenue Authority of Singapore (Iras) of over $11.8 million through a scheme in which he created over 200 shell companies to apply for grants from the taxman.
Lim Chit Foo pleaded guilty to 20 cheating charges on Wednesday (Jan 12) and will have another 411 similar charges taken into consideration for his sentencing on Jan 26. He was previously sentenced in January 2019 to 40 months' jail for obstruction of justice in relation to the same crimes.
The court heard that Lim had two accomplices - Wang Jiao, 39, and Li Dan, 38.
Sometime before April 2015, Lim hatched a plan to make false claims under the Productivity and Innovation Credit (PIC) scheme, which granted cash payouts and bonuses to eligible companies to spur productivity.
From 2015 to 2016, the trio created over 200 shell companies and paid people to be the nominee directors of these companies.
They then submitted false claims under the PIC scheme for fictitious expenses incurred by the shell companies in the form of software and Web-based system purchases.
In one instance, Wang and Li got to know one Chua Phoi Yong and told him that they needed a Singaporean who was not bankrupt to set up companies for them.
Li proposed to set up the companies in Chua's name and promised Chua that if the companies were profitable, he would get a cut of the profits.
Chua agreed and gave the fraudsters his Singpass ID and password to set up the companies.
Between Oct 28, 2015 and May 25, 2016, Chua was appointed the director of G & G Prestige. On Li's instructions, he opened a bank account for the company and pre-signed blank cheques so Li could withdraw money from the account at any time.
Wang and Li then submitted fraudulent PIC claims to Iras under the name of G & G.
Iras approved the fictitious claims and disbursed nearly $45,000 to the company's bank account on Jan 22, 2016.
The trio repeated this mode of operation with more than 200 shell companies, and received around $11,793,000 from Iras in PIC cash payouts.
Court documents state that in September 2016, a man working with the trio had submitted documents to Iras which the agency suspected were forged. Investigations found that there were over 400 PIC applications submitted by the shell companies between 2015 and 2016.
Deputy Public Prosecutor Eric Hu told the court that only around $455,000 in funds has been recovered to date.
Mr Hu added that Iras would have disbursed a further $8,487,000 to the swindlers had their PIC applications for these claims been successful.
For each count of abetment by conspiracy to commit cheating, Lim can be jailed for up to 10 years and fined.
Regarding his previous conviction, he had instigated at least three employees and a business partner to give false information to the police to cover up his fraudulent applications for PIC grants.
Correction note: An earlier version of this article stated that a whistleblower working with the trio had reported their wrongdoings to Iras. This has been corrected. We are sorry for the error.
The prosecution, which earlier said the sum of money cheated was over $11.7 million, has also clarified that it should be over $11.8 million.