SINGAPORE - Oil trading firm Vermont UM Bunkering and several of its employees worked together to cheat its customers in a ruse involving marine fuel oil, a district court heard on Thursday (July 21).

The prosecution said that the company delivered less quantity than was contracted on at least 52 occasions between Jan 4, 2014, and March 2, 2016.

As a result, Vermont's customers were duped into making excess payment of more than US$3.6 million (S$5 million) for the fuel that was not delivered to them.

Loh Cheok San, now 52, who was then working as a senior cargo officer at the firm, pleaded guilty on Thursday to two counts of cheating.

Through his offences, he personally made illegal gains totalling more than $400,000. He has made no restitution.

The cases involving the company as well as his then colleagues, Lee Peck Yong, 34; Lee Kok Leong, 57; Koh Seng Lee, 60 and Poh Fu Tek, 63, are still pending.

Two others - Yang San Hua and Xing Tao - absconded from Singapore in or around May 2016.

The prosecution stated in court documents that investigations revealed that Vermont had engaged in unlawful "buyback" transactions with the chief engineers or captains of vessels from as early as 2011.

Deputy public prosecutors Alan Loh, Grace Lim, Kang Jia Hui and Genevieve Pang said that as part of the deal, there was an agreement for Vermont to supply less fuel oil than what was ordered by vessel owners.

The opportunity for a "buyback" transaction would arise when there was excess or remaining marine fuel oil on the vessel that Vermont was supplying to.

The agreed price for the "buyback", paid to the chief engineer or captain, was usually lower than the market rate.

According to court documents, Vermont would then sell the excess fuel oil at a higher rate, such as the market rate.

It would thus profit from the difference between the higher rate and the amount paid to the chief engineer or captain.

The chief engineer or captain would then pay an independent surveyor of the vessel to falsely certify that the contracted amount of marine fuel oil was delivered.

While working for Vermont, Loh reported to Lee Kok Leong, who was Yang's subordinate.

Loh admitted that he would inform Lee Kok Leong whenever there was an opportunity for a "buyback" transaction.

The court heard that Lee Kok Leong would then liaise with Yang on the proposed rate for it.

The prosecutors said that Lee Kok Leong would arrange for cash to be passed to Loh to pay the chief engineer or captain.

They added: "Loh admitted to collecting the cash in an envelope from (Lee Kok Leong), which he would then personally hand over to the chief engineer or captain.

"(Lee Kok Leong) and the cargo officers were also paid about $15 per metric ton of marine fuel oil for each 'buyback' transaction by Vermont as their commission."

The court heard that Lee Kok Leong took at least 25 per cent from this $15 per metric ton, with the cargo officers - Lee Peck Yong or Loh - responsible for the transaction receiving the remaining 75 per cent.

Loh earned at least $48,800 from his commissions in the "buyback" transactions.

The prosecutors said that he had also conspired with Lee Kok Leong and Lee Peck Yong to deceive Vermont into paying them more commission over the illegal buyback transactions.

Loh received around US$314,000 for doing so. He is expected to be sentenced in October.

For each count of cheating, an offender can be jailed for up to 10 years and fined.