$12m fraud at Govt Stat Board

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One of the biggest fraud cases in recent years.....plus the men and their expensive assets!

Business Times - 29 Sep 2010

$12m fraud at govt stat board

SLA recovers Ferrari and Lamborghini from two former IT officers who allegedly raised fake invoices for fictitious maintenance services


(SINGAPORE) In what is perhaps the biggest case of government-sector fraud in recent history here, police have caught and charged a former Singapore Land Authority (SLA) senior employee on 249 counts of cheating the authority of some $12 million, over the course of two years.

If convicted, he faces a possible jail term of up to 10 years on each charge.

But that isn't all; the probe on the man is still ongoing, and BT understands charges could also be brought against a colleague he is believed to have conspired with and the external parties they both dealt with.

SLA has managed to recover some $10 million in cash and assets from its two former employees, with the help of the police. BT understands that among the assets recovered were flashy cars driven by the two men - a Lamborghini and a Ferrari - five properties, watches, jewellery and designer handbags.

SLA, which is a statutory board that manages state land and is also the national land registration authority, said (in a joint press statement with the Law Ministry yesterday) that it believes its two former officers, Koh Seah Wee, 39, who was deputy director of its technology & infrastructure department, and Christopher Lim Chai Meng, 37, a manager in that department, conspired to cheat SLA of $11.8 million.

Under an old SLA organisation chart obtained by BT, Koh, who has been charged, reported directly to the director of the information technology division, who in turn reported to the deputy CEO of SLA. Lim is understood to have reported to Koh.

SLA said, in its press statement, that the two men are believed to have rendered false invoices through various business entities, for fictitious IT maintenance services and goods which were not delivered. The business entities were set up by their friends, with seven of the entities owned by businessman Ho Yen Teck. BT understands the transactions took place between January 2008 - less than a year after the two men were seconded to SLA from the Infocomm Development Authority - and March 2010.

Explaining how the crime could have escaped detection for more than two years, SLA said 'the two officers are suspected of conspiring with each other and with the said business entities, thus enabling them to circumvent the checks and balances in the processes'. SLA said it also had in place finance and procurement processes which were in accordance with government guidelines.

BT understands this to refer to the government practice where departments can request parties to submit a quote for contracts worth less than $70,000 - a limit beyond which government offices have to call for a tender. The government and the SLA also have an $80,000 limit - the maximum amount for a contract which a deputy director, like Koh, could have approved on his own. Any amount beyond that has to be approved by the director of the division.

BT understands that the two men escaped detection by ensuring that each of the contracts they secured - from the fictitious IT companies set up by their friends - were below these limits. The amounts ranged from $2,600 to $60,000.

Lim would submit the requests to Koh, who would then approve them under his authority. The quotes by the fictitious IT firms were then submitted through the government's e-procurement portal, GeBiz, so that everything appeared proper on the surface. The contracts were also for IT services - intangible products that could not be verified by sight after they were provided.

Drew & Napier director Wendell Wong, an experienced litigator who also prosecuted commercial crime cases during his stint as a public prosecutor, commented: 'Where there is a conspiracy between two or more parties, it does make detection of the crime that much tougher.'

The crime was uncovered in June this year when Koh was rotated out of the department, as part of SLA's routine rotation programme.

The new department head, while reviewing past expenditure, felt something was amiss. SLA then reported the matter to the police.

The Commercial Affairs Department (CAD), Singapore's white-collar-crime police, has since recovered much of what SLA lost. BT understands that the discrepancy between what CAD has recovered and what was taken by the two men is due to changes in the values of the assets - such as in the case of Lim's Ferrari, which lost some value after it crashed along Nicoll Highway last year.

Asked why it revealed the matter only now - three months after it was first reported to the police - SLA said: 'We did not go public any earlier as police investigations including the tracing of assets were ongoing. Investigations against Koh are now largely completed . . . and this is the first appropriate opportunity for us to inform the public of the case.'

SLA said it has since beefed up its internal processes to help prevent a recurrence of such an incident, such as requiring an officer from a different department to verify the request to call a quotation, and reducing the financial limit for approval of financial transactions by certain levels of officers.

Disciplinary investigations will also begin in respect of two SLA officers whose oversight might have allowed the fraud to take place undetected. Disciplinary action will be taken, if appropriate, SLA said.

Koh is currently in remand - and has been since June - as he is unable to raise the $1.5 million bail offered to him. He is represented by Ravinderpal Singh and his case will be mentioned again on Oct 19.

If convicted of cheating, under the Penal Code, he could be fined up to $10,000 and jailed up to 10 years on each count. For concealing criminal proceeds, he could be fined up to $500,000 and/or jailed up to seven years.

Business Times - 29 Sep 2010

The SLA men and their expensive tastes

A Lamborghini and a Ferrari highlighted their taste for life in the fast, flashy lane


(SINGAPORE) Little is known about the two Singapore Land Authority (SLA) officers who allegedly made off with $12 million of the statutory board's money.

But Koh Seah Wee and Christopher Lim Chai Meng's supposed actions have now made them notorious.

Both men were named by the SLA yesterday as being suspected of having conspired to cheat SLA of $11.8 million, by awarding fictitious IT maintenance service contracts to 10 companies set up by their friends.

Koh has been charged with 249 counts of cheating and faces jail time and fines, if he is convicted. Lim is assisting the police with their investigations.

Their colleagues at the SLA, who spoke to BT, said the two men were 'meek' and 'docile', and did not share their private lives in the office. They were said to have been really close to each other, spending a lot of time together.

Both were polytechnic graduates made good. They had been seconded to SLA from the Infocomm Development Authority of Singapore (IDA) in early 2008 - and allegedly got to work channelling a substantial chunk of SLA's money to themselves very soon after.

Of the $11.8 million they supposedly siphoned off, much was spent on flashy cars and properties.

Koh bought a $1.6 million Lamborghini, which he registered under the name of his wife, Yeing Nyok Sea, 38. He also bought his mother-in-law, Kok A Mui, a $300,000 Mercedes-Benz coupe.

Lim bought a Ferrari, which he crashed along Nicoll Highway in December 2009 - an accident reported then by The Straits Times. In that report, the Ferrari was described as a 'mangled mess' after it hit a guardrail, then a tree.

An ambulance arrived at the scene at 7.18am, but the driver - named as Lim Chai Meng - was not seriously hurt, other than for some scratches on his arms and forehead.

BT understands that no one in SLA had realised the Ferrari driver was their colleague, as they knew him in the office as Chris Lim.

Both men also took pains to not wear the expensive watches they had bought with their ill-gotten gains to the office.

'They were very subdued, very humble people. There was no indication that they were doing well, materially. They didn't wear branded goods or luxury watches,' an ex-colleague told BT.

The men also spent money on properties - all of which have been seized by the Commercial Affairs Department (CAD). Koh is understood to have bought three properties, one of which was Axis@Siglap along East Coast Terrace. Lim bought two properties.

Koh is also understood to have bought jewellery and handbags for his wife, and put some of the money into unit trusts and bank accounts.

Koh is an ultra-marathoner who took part in the 2008 Sundown Marathon, Singapore's inaugural 84km night marathon, and in the Osim Singapore International Triathlon 2009.

SLA, working together with the CAD, has managed to recover some $10 million in cash and assets from its two former employees.

Just about all of the assets bought with the stolen money has been recovered - with the discrepancy in the value being the result of changes to the values of the assets, such as in the case of Lim's Ferrari, which lost value after its crash.

My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
I view this as a case of an over-sized petty crime done by 2 silly people, who didn't appreciate the risks involved, and had not planned much on how if they would eventually get caught!
Not his fault because his salary not high enough.
I don't think 'not high enough' is a good enough excuse.

It was reported that a deputy director's salary is somewhere like $8,000 per month. According to the latest published 'Key Household Income Trends', that already puts him in household earnings above 70% of the population. If he has a wife that works as well, this guy's household could easily be in the top 20% of household income earners.

This is a case of greed, pure and simple and it's a good thing he was caught.
I agree with Kazukirai on this. Crimes committed ae not normally a function of a person's salary, but are more reflective of his greed and (probably) spending habits. In this case, it can be clearly seen that both men had a penchant for flashy consumer items such as luxury watches and expensive sports cars; and they also purchased properties and investments with their ill-gotten gains. Interestingly, Lim crashed his Ferrari last year and it was reported in the news that he escaped with just minor injuries. Perhaps he was feeling guilty-conscious at the time and could not focus on driving? Tongue

I also really cannot understand why these two men would throw their lives away like this just for the sake of living the high life for 2+ years. Didn't they ever consider the consequences of their actions? Jailed, probably made a bankrupt, reputation in tatters and lives (i.e. their family) destroyed as a result of their avarice. Undecided

My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
Musicwhiz Wrote:I also really cannot understand why these two men would throw their lives away like this just for the sake of living the high life for 2+ years. Didn't they ever consider the consequences of their actions?

1. Criminals are not known for long-term thinking.
2. Few criminals think they will get caught.
3. Crime often starts small and slowly grows into something too big to stop.
If one has a chance and an opportunity to earn a hefty sum through a flawed in the system, wouldn't one try his very best to 'cheat' and get away as much as possible ?
It's exactly the same in the market; if one sees a definitely earn arbitrage opportunity, one definitely will fully utilize all his funds into it to gain.

It fits perfectly as our header;
'Investment is most prudent when it is most business-like'
Most criminals know the risks of doing a crime but very few are competent of being undetectable.
If one is to commit a crime, do a big one instead of a small one since consequence = being caught; not weighing the harsh punishment from criminal proceeds.
(29-09-2010, 02:38 PM)ssian Wrote: If one has a chance and an opportunity to earn a hefty sum through a flawed in the system, wouldn't one try his very best to 'cheat' and get away as much as possible ?
It's exactly the same in the market; if one sees a definitely earn arbitrage opportunity, one definitely will fully utilize all his funds into it to gain.

Well, in all fairness, I think we should not liken criminal activity with investing.....this is an obvious exploitation of a loophole at SLA for personal gain and is illegal. Arbitrage is a capitalizing on differences in pricing between two exchanges and is legal.

And I don't agree that people will always try to exploit weaknesses. If a person was honest and had integrity, he would report the loophole and ensure that it was closed instead of thinking of ways to exploit it.
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
My question is how on earth did they manage to climb the ladder to reach those untouchable levels?

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