Driven by greed, two employees of one of Singapore's oldest cooperatives treated its funds as their own personal expense account, defrauding it of more than $5.1 million of members' savings.
In five years, the duo systematically abused their position of trust by reaching into its coffers to feed an "extravagant lifestyle" beyond their means, said the prosecution.
Yesterday, assistant manager Arni Ahmad, 42, who misappropriated funds and cheated the Singapore Statutory Boards Employees' Cooperative Thrift and Loan Society of $4.3 million, was sentenced to 12 years in jail. She pleaded guilty to 20 charges, with 447 other charges taken into consideration.
Administrative executive Hanati Jani, 50, was jailed for nine years and eight months after admitting to 20 of 275 charges. The total amount involved in her case was $1.95 million.
The overall amount was around $5.1 million because of overlapping in several of their offences.
The co-op's members are employees of statutory boards - mainly from national water agency PUB and the Housing Board - Singapore Power and civil servants.
The co-op, founded in 1925, takes deposits and gives loans to members, who make monthly contributions of at least $10 to specific deposit accounts.
Arni was promoted to assistant manager in January 2008, two years after she joined the co-op.
Cooperative puts in extra security measure
The cooperative which lost more than $5.1 million to a pair of errant employees said it has turned to technology to tighten its financial processes.
The Singapore Statutory Boards Employees' Cooperative Thrift and Loan Society (SSBC) told The Straits Times: "Since the incident was discovered in 2013, it has been a difficult time for the cooperative. However, the continued support and unity of our stakeholders and especially our members saw us through this challenging period."
After the discovery of the lost funds, the cooperative reviewed its internal procedures and put in additional security measures, including the use of technology such as two-factor authentication (2FA) and biometric recognition.
Members now have to log in to their accounts using these methods, such as with fingerprints.
The cooperative did not respond to questions on how it intends to recover the lost money, and why the culprits were able to carry on with their scam over a period of five years.
Lim Min Zhang
Her duties included processing members' loans, deposits, withdrawals and keeping records of the movements of accounts. She was also in charge of processing payments for members who terminated their memberships and liaising with various parties on the monthly collection of members' subscription fees.
Hanati joined in 2008 and covered Arni's duties in her absence.
Investigations showed that between 2008 and 2013, they deceived the co-op into disbursing money to them by creating phantom members.
Among other things, they prepared false member termination letters, account movement records and employee manifests, and made false loan applications, copies of identity cards and payslips to deceive the co-op into disbursing subscription fees and specific deposits and loans to phantom members' bank accounts.
The phantom members were their friends and relatives, who would be instructed by Arni and/or Hanati to withdraw and transfer or hand the money over to them.
They spent the money on, among other things, staycations at five-star hotels such as Amara Sanctuary Hotel and Rasa Sentosa Shangri-La Hotel, and gym memberships with personal trainers.
Arni went on vacations with her family to Europe and Malaysia, made telegraphic transfers to Australia and Indonesia for her family's living expenses, rented a flat in Savannah Condopark in Simei and splurged on home renovations.
Deputy Public Prosecutor Kenneth Chin called for a stiff deterrent sentence to reflect the magnitude of the wrongdoing.
They exploited internal processes to commit the crime for personal benefit, Mr Chin added.
In sentencing, District Judge Lim Tse Haw noted the aggravating factors, including the staggering losses, high level of premeditation and the sheer number of charges.
The women did not make any restitution.