Company manager gets 14 weeks' jail for attempting to dupe taxman into disbursing payouts for phantom employees

SINGAPORE — When asked by the Inland Revenue Authority of Singapore (Iras) if six phantom employees were hired at his father’s company so that appropriate Job Support Scheme payouts could be disbursed, Teoh Wong Har lied that they were. 

However, a slip-up in documentation led to the taxman discovering his ruse, which eventually prevented TK Manufacturing and Wholesale Centre (TKM) from receiving any of the payouts.

If successful, the total amount of government payouts would have amounted to more than S$6,500.

On Thursday (March 23), Teoh, 35, who was managing his father's company at the time of the offences, admitted to two cheating-related charges, and was sentenced to three months and two weeks in jail.

Four other similar charges were taken into consideration for sentencing.

WHAT HAPPENED

Court documents detailed Teoh’s dishonesty pertaining to the two charges to which he pleaded guilty.

Deputy Public Prosecutor (DPP) Ryan Lim said that around July 2020, Teoh was informed through a letter from Iras that it was conducting a review on TKM to verify that the amounts paid as mandatory Central Provident Fund (CPF) contributions for the company’s employees were correct for the months of February to April 2020.

Iras added that this information would be used as the basis to compute Job Support Scheme payouts for July that year. 

These payouts were meant to provide wage support to employers to help them to retain resident employees during the Covid-19 crisis.

The prosecutor said Teoh knew that TKM had been making CPF contributions to six phantom employees, including one Cheng Soo Meng and Lee Huey Wah, who are the subjects of Teoh’s charges.

It was not stated if these two persons were made up or real.  

DPP Lim added that Teoh also knew that Iras would be making Job Support Scheme payments to TKM on the basis of these CPF payments. TKM could have received a payout of S$977 for Cheng and S$1,625 for Lee.

Despite a warning from Iras against submitting false information, which included past examples of how the scheme had been abused, Teoh lied by declaring in a form to Iras that TKM did not make any false contributions to “non-genuine employees”, DPP Lim said.

However, Iras later asked for more supporting documents from TKM to facilitate the Job Support Scheme payout for July.

In response, Teoh submitted on Aug 5 that year the following fabricated documents, among other things:

• The purported job scope of the phantom employees
• Purported employment contracts for each of the phantom employees
• Monthly payslips for each of the phantom employees for the period between February and April 2020

About a week later, an Iras officer called Teoh on Aug 11 to ask why Cheng did not sign his own employment contract.

Teoh lied that Cheng was not English-educated and that he had simply read the contract to Cheng and handed him a hard copy of the contract, as well as paid his salary in cash.

Teoh delivered goods to the homes of these so-called freelancers such as Cheng and would collect the items once they were done packing it, court documents quoted him as saying.

It was not stated what Iras' response to these claims were, but it did not disburse the Job Support Scheme payouts to TKM in the end due to the irregularities it detected in Teoh’s submissions.

DPP Lim, who sought a jail term of four to five months, described Teoh’s case as a “brazen and persistent attempt to cheat Iras into disbursing public monies” and that the total amount of payouts TKM could have received, S$6,507, was "not insubstantial". 

He also said that Teoh had “abused the trust of his father”, on whose behalf he was managing TKM.

And while the prosecution acknowledges that no financial harm was eventually committed, and that Teoh had made a voluntary payment of S$8,436 to Iras, it does not justify a lenient sentence.

Anyone found guilty of cheating can be jailed up to 10 years and fined.