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Singapore’s Money-Laundering Crackdown Reveals Links to China
A recent crackdown on a money-laundering syndicate in Singapore that led to the apprehension of ten individuals has evolved into a global incident. The group was found to be funneling illicit funds connected to underground online gambling operations. Ongoing inquiries have uncovered strong links between the syndicate and criminal networks in China, as well as the luxury real estate market in Singapore.
Elusive Culprits and Opulent Hideaways
Despite the arrest of nearly a dozen suspects, some individuals remain at large or unidentified. Investigators have determined that several of these individuals are the owners of 23 opulent apartments within South Beach Residences, an upscale condominium complex in Singapore.
Reports indicate that front companies registered in locations like Malaysia, Hong Kong, and the British Virgin Islands may have facilitated these real estate transactions to conceal the true owners. Many of these individuals are Chinese nationals, potentially facing the forfeiture of their properties.
A Safe Haven for Illicit Wealth
In September 2018, South Beach Residences garnered attention for its luxurious offerings. Many units were sold to Chinese nationals, some of whom paid staggering sums in cash without undergoing rigorous source of funds checks.
One such buyer reportedly purchased a penthouse for SGD 26 million (US$19.2 million) in cash, setting off no alarm bells. Chinese buyers acquired approximately 25 units within three months, paying exorbitant prices exceeding SGD 3,000 (US$2,215) per square foot, cementing the properties’ exclusivity.
The Chinese Wealth Exodus
Since Chinese President Xi Jinping launched an anti-corruption campaign in 2012, affluent Chinese individuals have sought refuge in Southeast Asian countries like Singapore to secure and legitimize their wealth. This exodus has been facilitated by a network of lawyers, housing experts, and financial institutions, who have been instrumental in orchestrating money trails and real estate deals.
Private bankers played a crucial role in discreetly transferring funds from China to Singapore, often evading anti-money laundering regulations through bribes. This pervasive issue has compromised the integrity of banks in Southeast Asia and threatens their reputation.
In one case, a private banker was exposed by his own bank’s covert agents but continued his operations after being fired, using his credentials to establish a new financial advisory organization.
As Singapore grapples with the fallout from this money laundering scandal, authorities are intensifying their efforts to restore the nation’s image. The Council for Estate Agencies is investigating its licensed members to ascertain any involvement in the illicit scheme.
Notably, T Raja Kumar, the former head of Singapore’s Casino Regulatory Authority, now leads the Financial Action Task Force (FATF). His expertise may prove invaluable in ongoing investigations, as some believe the money-laundering syndicate may have connections to the beleaguered casino junket sector in Macau, potentially expanding the scope of the case.