Woman jailed 4½ years for cheating banks of about $1.8 million

SINGAPORE - A 50-year-old woman was jailed for 4½ years on Wednesday (March 3) for cheating multiple banks into disbursing about $1.8 million in loans.

Tan You Jia pleaded guilty to two counts of corruption and four counts of engaging in a conspiracy to cheat with a 51-year-old man, Lee Beng Yong, that involved more than $700,000 in total.

When sentencing her, Principal District Judge Toh Han Li took into consideration 10 other cheating-related charges, including those involving the remaining amount, and three counts of corruption.

All the offences took place between 2014 and 2015.

Court documents said that some time between 2012 and 2013, Tan and Lee became acquainted with each other.

Lee later agreed to work for Tan in her business, which involved applying for business instalment loans on behalf of companies.

Such loans are offered by financial institutions, including banks, to small and medium-sized enterprises (SMEs) for their business operations.

As part of the loan application, an SME must submit certain documents to the financial institution's relationship managers, including the company's bank statements for the past six months.

Deputy Public Prosecutor Haniza Abnass said Tan and Lee would source for individuals to act as directors of companies and apply for the loans.

"In exchange for agreeing to be registered as company directors, these individuals were typically promised a portion of the funds disbursed from the loan applications," the DPP said.

The duo knew that the appointed directors were simply nominees who did not operate the companies and, in most cases, financially incapable of obtaining the loans, said the court documents.

After an individual agreed to the arrangement, Lee would arrange for a "shelf company" to be purchased from a corporate secretarial service provider.

A "shelf company" is a company that has no business activity, and can be sold to people seeking to start a company without going through the procedure of creating a new one.

The court heard that Lee also helped Tan to rent office spaces so that any correspondence for the shelf company could be forwarded to such an address.

Once the company had been purchased and the individual appointed as its director, Tan or Lee would arrange for it to apply for a business instalment loan from one of three financial institutions: DBS Bank, Standard Chartered Bank and Maybank.

After the loan was disbursed into the company's bank account, Lee would arrange for the appointed director to withdraw most of the funds in cash.

"Investigations were unable to trace the movement of the funds after withdrawal," said DPP Haniza.

It was later revealed that the bank statements submitted in support of the loan applications were forged.

Court documents said that the people who forged and physically submitted the bank statements remain unknown.

Tan and Lee also gave $10,500 in bribes to two relationship managers from Maybank and StanChart as a reward for processing the loan applications, the court heard.

DPP Haniza said about $1.8 million in loans was approved, with the banks eventually suffering losses of about $1.5 million in total.

Staff from DBS and StanChart later made police reports in 2015, saying that they had received forged bank statements from various companies in relation to loans.

The court heard that no restitution has been made thus far.

Lee and the nominee directors will be dealt with separately.

DPP Haniza urged the court to jail Tan for at least five years, saying that she was "one of the prime movers" of the ruse and had recruited Lee to carry out her instructions.

Pleading for leniency, Tan said in mitigation that most of the money had been taken by Lee.

The judge backdated her jail term to July 11, 2019, when she was remanded.

For each cheating-related offence, Tan could have been jailed for up to 10 years and fined.

She could also have been jailed up to five years or fined up to $100,000, or both, for each of the corruption charges.