1MDB probe: Swiss national jailed, fined for failure to report suspicious transactions
SINGAPORE — As far back as 2012, former Falcon Private Bank branch manager Jens Fred Sturzenegger knew that Malaysian financier Jho Low — a central figure in the global 1Malaysia Development Berhad (1MDB) money-laundering probe — had been using the identity of Eric Tan as a proxy for the accounts he opened with the bank.
But the Swiss national did nothing about the red flags when the transactions came before him, and feigned ignorance when the white-collar crime cops came knocking on his door.
On Wednesday (Jan 11), the 42-year-old was sentenced to 28 weeks’ jail and fined S$128,000, becoming the fourth person to be sentenced amid Singapore’s investigations into money-laundering operations linked to 1MDB.
He was convicted of six charges: Consenting to the bank’s failure to comply with the Monetary Authority of Singapore’s (MAS) anti-money laundering directions, failing to report suspicious transactions and providing false information to the authorities. Another 10 charges were taken into consideration for sentencing.
The court heard that Sturzenegger was introduced to one Eric Tan by his group chief executive officer Eduardo Leemann via e-mail in January 2012, and arranged to meet the following month.
At the meeting, Mr Tan re-introduced himself as “Jho Low” and told Sturzenegger that he used the name “Eric Tan” occasionally for security reasons.
It was at this meeting that he realised that the “Eric Tan” he had been communicating with — through firstname.lastname@example.org and over the phone — was in fact Mr Jho Low, said Deputy Public Prosecutor Jacky Leong.
Sturzenegger also knew that Eric Tan was not merely an alias but a real person after he saw a copy of Mr Tan’s passport and curriculum vitae as part of the account-opening process.
Four accounts were opened at Falcon in the names of various corporate entities, with Mr Tan on record as the beneficial owner of these entities.
In March that year, two of the four accounts — under the names of Tanore and Granton — received remittances amounting to US$1.265 billion (S$1.82 billion).
Sturzenegger became extremely apprehensive of the inflow of such astronomical sums of monies and expressed concern that the funds could be related to money laundering. Phone conversations between him, Mr Leemann, then-chairman of Falcon Mohamed Ahmed Badawy Al-Husseiny and Mr Low also revealed that the supporting documents for the transactions were inadequate.
The prosecutor pointed out that as the most senior executive of the Singapore branch of Falcon, Sturzenegger had a strong say on whether to file a suspicious transaction report. That the bank did not do so was due to his decision and consent.
On March 21, the bank processed a payment of US$378 million from the Granton account to one Dragon Market Limited, without identifying the latter’s beneficial owner and supporting documentation on how the money would be used.
On that same day, there were also instructions communicated via email@example.com to transfer US$30 million from the Granton account to one Densmore Investment Limited.
Sturzenegger knew that the supporting documents for this transfer were highly suspicious and unsatisfactory, and the bank did not proceed with the transfer.
In both cases, Sturzenegger had reasonable grounds to suspect that the monies involved could been used in connection with potentially criminal acts, but he failed to disclose the information to a suspicious transaction reporting officer.
During an interview with the Commercial Affairs Department last September, Sturzenegger also lied about several issues, such as claiming he did not know Mr Low in person despite meeting him in 2012 and 2013.
In mitigation, his lawyer Tan Hee Joek noted that his client did not derive any personal financial gain from these transactions, and his early plea of guilt reflected his remorse and regret.