Singapore resident fined $5,000 for letting foreigner use his name to set up local company for money laundering

SINGAPORE - A Singapore resident was slapped with the maximum fine of $5,000 on Thursday (Oct 3) for lending his name to a foreigner to incorporate a local company that was used to launder money.

The police said that Chong Yit Cheong, the resident director of Milotex Trading, failed to exercise reasonable diligence in his duties as company director.

Chong agreed to be the resident director of Milotex after Pee Lee Ping, the director of a corporate service provider, offered him a sum of money in return. Milotex had been incorporated at the request of Pee's client, who is a foreigner.

Singapore laws require locally incorporated companies to have at least one director who is living in Singapore.

Pee instructed Chong not to be involved in the running of the company. Chong then signed paperwork and opened bank accounts for Milotex without finding out about its business or meeting the foreigner behind it.

On April 7, 2014, €339,880 (S$514,000) linked to criminal offences committed overseas was wired to Milotex, and then quickly transferred out of Singapore.

"Milotex Trading had no legitimate business operations in Singapore and was set up purely to facilitate the laundering of criminal proceeds through Singapore," the police said.

 
 

Earlier, Pee was also fined the maximum fine of $5,000 for abetting Chong in committing the offence.

Those found guilty of failing to act honestly and use reasonable diligence in the discharge of their director duties can be fined up to $5,000 or jailed for up to a year.

The police advised current directors or those intending to take on directorships to familiarise themselves with their required duties.