Ex-company director who evaded tax, laundered money gets 8½ years’ jail, must pay almost $9.3m

SINGAPORE - A former director of six companies who was convicted of evading goods and services (GST) tax and money laundering offences was sentenced to eight years and six months’ jail on Thursday.

Thomas Lee Zhixiong, 41, was also ordered to pay close to $9.3 million in fines and penalties after he pleaded guilty to making false entries in the GST returns of three of his companies, and abetting another company in making incorrect GST returns without reasonable excuse, among other charges.

The six companies – some providing logistics and construction services and others beauty and hair services – are Everasia Transportation and Warehousing, Everasia Logistics, Hup Heng Construction and Trading, Sante De Beaute, S.D.B. Group and Nourriture.

Addressing the GST evasion charges, senior tax prosecutor David Lim said Lee had electronically filed a total of 31 GST returns on behalf of three companies using his Singpass account.

“He had regularly, deliberately and systematically made false entries in the said GST returns of the three companies... in order to obtain GST refunds to finance the operations of his businesses,” said Mr Lim.

This resulted in around $2.97 million of taxes being undercharged.

The prosecution added that Lee took elaborate steps to create fake invoices to support the false entries he had made in the GST returns.

He also abetted Nourriture to make an incorrect GST return. Investigations revealed he had submitted an incorrect GST return on behalf of the company, which had overstated output tax and input tax. This resulted in over $58,000 of tax being undercharged.

Mr Lim noted that Lee was the key person running Nourriture and was “effectively the controlling mind” of Nourriture.

Lee also admitted to carrying out money-laundering activities. This included transferring illegally obtained GST refunds to multiple individuals and entities for various business purposes, including employees’ salary and rental payments.

In a joint statement on Thursday, the police and the Inland Revenue Authority of Singapore (Iras) said it is a serious offence to wilfully evade tax by submitting false GST returns such as by understating any output tax, overstating any input tax, excluding taxable supplies or including fictitious transactions.

Those convicted are liable to pay a penalty of three times the amount of tax undercharged and can be jailed for up to seven years, or fined up to $10,000, or both.

Anyone found guilty of acquiring, using, transferring, or assisting another to retain benefits from criminal conduct can be jailed for up to 10 years, or fined up to $500,000, or both.

“Singapore takes a serious view on fraudulent GST refund claims and related money-laundering activities and will not hesitate to take stern enforcement actions against individuals who commit these offences and persons who facilitate them,” said the police and Iras.

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