8 years 4 months’ jail for ex-OCBC dealer who caused bank to lose S$3.1 million

SINGAPORE — A former OCBC treasury adviser who caused the bank to lose S$3.1 million after making unauthorised foreign exchange trades in his customers’ accounts to earn profits, was sentenced to eight years and four months in jail on Friday (Oct 18).

In sentencing 41-year-old Lu Chor Sheng, District Judge Tan Jen Tse said his crimes, which were committed over two years and involved a total of S$4.3 million in funds, were “extremely serious”, “highly premeditated” and “clearly” warranted a deterrent sentence.

And although Lu had made restitution of S$96,000 to OCBC, the judge said the figure “pales in comparison” to the losses the bank suffered.

Lu faced 163 charges under the Computer Misuse Act, three counts of cheating, one count of using a forged document, and 10 counts of converting benefits from his criminal conduct into foreign currencies.

Friday’s sentence was for 47 of the total of 177 charges to which he pleaded guilty in October last year. Forty-nine other charges were taken into consideration during the sentencing.

Lu will next stand trial on 81 outstanding charges. A pre-trial conference has been set on Nov 14 to work out how the case will proceed.

While Lu had admitted to 47 charges, District Judge Tan highlighted during sentencing that his plea of guilt was “not borne out of remorse”, as it had came only after significant resources had already been expended in preparation for a trial and other proceedings.

Lu had initially elected to claim trial to his charges on Oct 10 and 11 last year, but it was only on Oct 11 that he confirmed that he intended to plead guilty.

And two months after he admitted to facts surrounding his case without qualification on Oct 11, he informed the court that he would dispute that S$3.1 million was the loss caused to OCBC, arguing that the figure should be S$810,000.

A five-day “Newton” hearing, which is held to resolve disputed points for sentencing, was then scheduled. But after the prosecution’s witnesses testified over two days, Lu informed the court that he would no longer dispute the sum.

Deputy Public Prosecutor Nicholas Khoo had also called this a show of an “utter lack of remorse”.

He summarised the case as one where “(Lu), motivated by self-interest, systematically and persistently over two years, grossly abused his position of trust by placing trades to benefit himself”.

THE TWO-YEAR ‘CRIMINAL SPREE’

The court heard that Lu, who worked for eight years as a treasury adviser, had decided to place the unauthorised trades in his customers’ accounts to keep his job at OCBC, which had learnt of his troubled credit status.

In 2012, the bank’s human resource officers had spoken to him about his credit status after noticing that he had numerous outstanding credit facilities maintained with other banks. His outstanding debt of S$200,000 to S$300,000 was run up from football betting and stock investment losses dating from around 2004.

Lu then approached Mr Tan Tiong Lin, a friend of about 25 years, to incorporate two new sole proprietorships under his name to set up business accounts with OCBC for foreign exchange investments.

At his instruction, Mr Tan set up D2D Exchange and Rubik-Cube Investment, with Lu having control of the companies’ bank accounts.

Lu also got Mr Tan to pre-sign cheques belonging to the two companies, lying to him that they would be used to place collateral with the exchange or broker.

At his request, Mr Tan also pre-signed letters of instruction to OCBC — to credit any profits into the bank accounts of D2D and Rubik or debit losses from them — so that Lu could submit instructions on his behalf.

Lu then placed unauthorised foreign exchange trades using the accounts of these two companies at off-market rates, generating higher profits by buying lower and selling higher, which would not be possible if he had squared the trades with traders as required.

As a result, D2D and Rubik made profits of more than S$1.2 million.

After realising the profits, Lu placed new trades in the accounts of other customers to hide the unauthorised trades. He then closed off the outstanding unauthorised trades at the same rates with no profit and loss impact to the customers when the market moved to the previously executed off-market rates.

When the market did not move to the rates executed, the outstanding unauthorised trades were forwarded to the customers’ accounts, and this continued until the trades could be closed off at no profit or loss, or forwarded to Rubik or D2D to reap the profit.

Ordinarily, treasury advisers are allowed to enter foreign exchange trades only when they receive instructions from customers, usually via the phone.

“Given that the accused made a deliberate and conscious choice to embark on his two-year criminal spree, coupled with his meticulous planning, specific deterrence is therefore warranted and an adequately stiff sentence should accordingly be imposed on the accused,” said DPP Khoo. He had asked for a sentence of at least 10 years.

After the sentencing on Friday, Lu’s lawyer requested that Lu begin his sentence only in three weeks’ time as there are some family issues that need arranging. The request was granted, and he was told to surrender himself on Nov 8. Lu remains out on S$100,000 bail.