In 2023, Singaporean authorities uncovered a scheme that allegedly facilitated the money laundering of billions of dollars through various businesses, including gambling and online gaming platforms. The operation was characterized by its sophisticated methods, utilizing shell companies and complex financial transactions to obscure the origins of the funds.
This Singapore’s largest money laundering case, also called the Fujian gang money laundering case, has sent shockwaves through the corporate world in the country, highlighting the critical role of corporate secretarial firms in preventing financial crimes. More than SGD 3 billion in assets were seized and 10 individuals from Fujian, China (hence “the Fujian Gang”) were arrested, charged and convicted.
This high-profile case underscores the urgent need for enhanced due diligence, risk management, and compliance measures within the industry. Now that the dust has more or less settled, it is timely to re-visit some lessons that could be learned from the case for corporate service providers (CSP) and registered filing agents (RFA).
As the case unfolds, it is clear that the syndicate had exploited corporate structures to create a façade that the members belong to a group of elite businessmen. Known companies and associations that the syndicate had set up in Singapore are presented in the table below:
| Name | Nationality/ Passport | Company associations |
| Su Baolin | Cambodian national |
|
| Su Haijin | Cyprus national |
Past affiliations:
|
| Chen Qingyuan | Cambodia national with China and Dominica passports |
Past affiliations:
|
| Su Wenqiang | Cambodia national with China passport | |
| Lin Baoying | China with Dominica and Turkey passports |
|
| Zhang Ruijin | China Passport from Saint Kitts and Nevis |
Past affiliation:
|
| Wang Dehai | Cyprus | |
| Su Jianfeng | Cambodian national Passport from Vanuatu and China |
|
| Vang Shuiming | Turkey with Vanuatu and China passports | |
| Wang Baosen | China with Vanuatu passport |
Key Takeaways for Corporate Secretarial Firms
1. Strengthened Customer Due Diligence (CDD)
The case emphasizes the importance of robust CDD procedures. Firms must go beyond basic form filling and checkbox risk assessment. From Table1, some of the syndicate members own many companies in Singapore. While there is nothing unusual in owning multiple companies, firms should be sensitive to the unusual profile of the customer and its beneficial owners. For instance, why would a successful businessman from China become a Cyprus or Cambodian national when he/she has no business activities in the country? Understanding the background of the beneficial owners and directors may pick up abnormalities if the beneficial owners or directors have no knowledge of the business they are managing.
When such abnormalities are found, firms should take additional measures by delving deeper into the background of the beneficial owners and directors including verifying the source of wealth, understanding the nature of the business, and assessing the risk profile of the client.
2. Risk-Based Approach to AML/CFT
Firms must adopt a risk-based approach to AML/CFT. This involves identifying, assessing, and mitigating risks associated with different client types and transactions. It has been reported that of the many companies owned by the syndicate members, nine of the companies were incorporated by a corporate secretarial firm LW Business Consultancy Pte Ltd owned by Wang Junjie. Findings by ACRA revealed that Wang’s firm had major deficiencies in AML/CFT measures including:
- failing to perform additional CDD when a customer is not physically present during onboarding;
- not enquiring if there exist any beneficial owners in relation to some customers; and
- failing to perform risk assessments in relation to some of its customers.
Consequently, ACRA had cancelled or suspended the registrations of 17 individuals and filing agents, including the Wang Junjie, for the breaches of anti-money laundering requirements.
Criminals will always look for the weakest link to exploit. Static templates for risk assessment are not only ineffective in identifying new risks, they also give firms a false sense of assurance that their customers are “safe” to onboard. Instead, management and compliance officer should conduct regular reviews on their exposure to the following AML/CFT risks:
- Customer risk (what kind of customers will pose a higher risk?)
- Country/ Jurisdiction (which country or jurisdiction will pose a higher risk?)
- Service/Transaction/Product/Delivery Channel risk (what kind of service, transaction, product or delivery channel provided by the firm are at higher risk of being abused by criminals?)
Firms can analyse past customers and pay attention to ML/TF news when evaluating the AML/CFT risks. These risks can then be disseminated to all staff through some form of checklist when onboarding customers.
3. Ongoing Monitoring
Corporate secretarial firms should implement systems for continuous monitoring of client activities and transactions to identify any concentration of risks or unusual activities. For instance, in addition to CDD performed for each customer onboarding, a corporate secretarial firm should regularly (e.g. every quarter) review their services provided to its customers to uncover any sudden spike in services provided to certain customers (e.g. frequent change of shareholders over a short period of time or incorporation of multiple companies over a short period of time by a few customers).
By looking out for unusual activities, firms can better react to the changing risk profiles of their customers and allocate resources more effectively and enhance their overall effectiveness.
4. Staff Training and Awareness
The effectiveness of AML/CFT measures depends on the knowledge and awareness of staff members. Firms should provide comprehensive training programs to equip their employees with the skills and understanding necessary to identify and report suspicious activities. Regular updates on regulatory changes and emerging threats are also crucial. While attending AML/CFT training by professional bodies is one way to gain AML/CFT knowledge, firms can set up intranet or chat groups to publish or discuss AML/CFT news, threats or lessons. Such channels not only raise awareness among staff, it also demonstrates management emphasis on AML/CFT.
Strengthening AML/CFT Compliance with Technology Solutions
The case underscored the challenges of combating transnational organized crime and prompted increased scrutiny of financial practices across the region. This has led to enhanced regulatory and compliance requirements not only for financial institutions, but also for Designated Non-Financial Businesses and Professions (DNFBP) sectors such as Corporate Service Providers, charities, non-profit organizations (NPOs), and licensed warehouse operators. For instance, the Corporate Service Providers Bill (CSP Bill) was proposed and passed in 2024, extending Anti-Money Laundering, Countering the Financing of Terrorism and the Proliferation of Weapons of Mass Destruction (AML/ CFT/ PF) obligations to the Corporate Service Providers sector.
To effectively navigate this increasingly complex AML/CFT/PF compliance landscape, professional firms and organizations exposed to money laundering risks must strengthen their Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) frameworks.
Implementing advanced AML/CFT technology solutions, such as SentroWeb® AML/CFT Solutions, can significantly enhance due diligence processes by efficiently verifying the identities and risk profiles of clients, beneficial owners, and associated entities.
Moreover, professional firms should establish clear protocols for the ongoing monitoring of clients to swiftly identify and respond to suspicious activities. By leveraging SentroWeb® AML/CFT technology solutions, firms can remain vigilant to changes in their clients’ risk statuses and take timely actions, such as filing Suspicious Transaction Reports (STR), to bolster their defenses against financial crime and ensure compliance with AML/CFT regulations. Click here to discover the features of AML/CFT technology solutions that can enhance your AML/CFT compliance and Customer Due Diligence (CDD) processes.
Conclusion
The Singapore’s S$3 Billion Fujian gang money laundering case serves as a stark reminder of the critical role that corporate secretarial firms play in preventing financial crime. By implementing robust AML/CFT measures, strengthening due diligence procedures, and fostering a culture of compliance, firms can contribute to a safer and more transparent financial system.
About Ingenique Solutions
Ingenique Solutions Pte Ltd delivers Anti-Money Laundering & Know Your Customer (KYC) screening and due diligence solutions to help small businesses and large enterprises meet their AML/CFT compliance requirements. It is trusted by 1,600+ companies in Hong Kong, Singapore, Malaysia, China and Taiwan, including government Ministry/ Agency, public listed companies, and top leading firms in various sectors.
Recent Posts:
- Lessons from the Singapore’s S$3 Billion Fujian Gang Money Laundering Case: A Wake-Up Call for Corporate Service Providers
- Navigating the New AML Compliance Requirements for Designated Non-Financial Businesses and Professions (DNFBPs) in Malaysia
- New CSP Bill in Singapore: Strengthening Governance and Compliance for Corporate Service Providers
