SINGAPORE - Two Singaporean men who were nominee directors of shell companies here were sentenced to jail after their firms inadvertently helped scammers launder almost $20 million.

This sum was mainly from foreign and local companies that were victims of scams, including business e-mail compromise and impersonation scams.

On Nov 30, Bernard Chng Kok Leng and Tay Chee Seng, both 49, were sentenced to six and four weeks’ jail respectively.

Chng pleaded guilty to five charges of failing to exercise reasonable diligence in his duty as director, while Tay pleaded guilty to three of the same offences. Both had similar charges taken into consideration for sentencing.

They were also disqualified from being company directors for five years.

They had contacted corporate secretarial firm Interconnect Consultancy in mid-2020 after seeing job advertisements for nominee directors online.

Deputy Public Prosecutor Janice See said Tay was working odd jobs and earning between $1,000 and $1,600 a month at the time. He needed money to supplement expenses due to the lack of jobs during the Covid-19 pandemic.

Both men went to Interconnect Consultancy’s office to speak to its director, Lee Chia Yen. They voiced concerns that the companies might be used for money laundering.

But Lee and his colleague Lee Ay Ling assured them the firm would do all the necessary checks and they had nothing to worry about.

Lee told the two men that they would receive $250 in director’s fees every six months. He told Tay he could be a director of a new company every day, which would work out to a monthly “income” of $7,500.

Chng was subsequently appointed nominee director of 52 shell companies, while Tay became nominee director of 57 shell companies.

They only had to give their details to Interconnect Consultancy and did not oversee any affairs of the companies, including their bank transactions.

Accounts opened for some of these shell companies, in which the two men were directors, received over US$14.6 million (S$19.5 million) in scam proceeds.

In September 2020, Belgium company Grib Diamond NV transferred US$10 million to a UOB account of one of Chng’s firms, Hang Yi.

It had done so after receiving fraudulent e-mails from their purported “chief executive officer” with instructions to transfer money to Hang Yi.

Within days, the entire sum was remitted to various bank accounts in Hong Kong, China and Singapore. It remains unrecovered to this day.

A UOB account of one of Tay’s shell firms, Liang Zuo, received US$500,000 from Pactera Edge Technologies Singapore in August 2020.

The company had received fraudulent instructions via e-mail from someone impersonating its director, who instructed the transfer.

The police managed to seize the full amount in Liang Zuo’s bank account.

DPP See said the two men were aware of the risks of acting as a nominee director, but they washed their hands clean of company affairs and were content to remain in ignorance despite their original doubts.

In court, Chng said he received up to $7,500 while Tay said he received $14,250 for their role as nominee directors.

Chng said in mitigation that he was “duped” into the job but knew he had no excuse for not exercising due diligence.

District Judge Wong Li Tein responded by saying Chng had chosen to rely on unreliable information.

The judge added that the recklessness of both men warranted jail terms.

Chng and Tay are part of a group of 12 people who had inadvertently helped scammers launder more than US$36 million through Singapore bank accounts.

The police and Accounting and Corporate Regulatory Authority said in a previous joint news release that between July 2020 and February 2021, foreign agents incorporated 35 local companies and opened bank accounts here to launder these criminal proceeds.

The 12 individuals had allegedly acted as resident directors of these companies, or abetted the directors’ offences.

Lee Chia Yen and Lee Ay Ling have been charged in court. Their cases are pending.

On Sept 25, Chinese national and permanent resident Liang Jiansen was fined $9,000 and disqualified from being a company director for four years. Companies where he had been director had laundered US$3.4 million.

A jobless Singaporean, Er Beng Hwa, who was nominee director of 186 companies, was fined $4,000 and disqualified from being a company director for three years on Sept 27. One of his firms had been used to launder US$2.36 million.