Skip to main content

Advertisement

Advertisement

Law firm director fined S$10,000 for not reporting suspicious Sentosa Cove property deal

SINGAPORE — The managing director of a law firm has been fined S$10,000 for failing to report a suspicious multi-million dollar property deal on Sentosa Cove that fell apart after the “high net worth client” was detained by the Chinese authorities for involvement in one of China’s largest-ever Ponzi scheme.

SINGAPORE — The managing director of a law firm has been fined S$10,000 for failing to report a suspicious multi-million dollar property deal on Sentosa Cove that fell apart after the “high net worth client” was detained by the Chinese authorities for involvement in one of China’s largest-ever Ponzi scheme.

Instead of notifying the authorities, conveyancing lawyer Kang Bee Leng, 56, applied to the Inland Revenue Authority of Singapore (Iras) for a refund of the buyer’s stamp duties for the transaction, amounting to S$4.2 million.

This sum has since been seized by the Commercial Affairs Department. For her offence, Kang, managing director of Sterling Law Corporation, could have been fined up to S$20,000.

The lawyer had pleaded guilty to one charge last month, admitting her failure to report that the S$5.5 million involved in the purchase of the Sentosa Cove property could have been derived from criminal activities.

The court heard on Tuesday (April 17) that Kang was approached sometime in October 2015 for conveyancing work via Tan Yen Hsi, the real estate agent at the time for Zhang Min, the then president and chief executive officer of Yucheng Group, a company behind the Ezubao online peer-to-peer lending scheme.

Zhang had wanted to buy a Lakeshore View property on Sentosa, valued at S$23.8 million.

Kang did not meet Zhang in person, and only conducted an online research of her background and company.

Between October and November 2015, Zhang paid Kang’s firm S$5,481,180 for conveyancing fees, an option to purchase, and stamp duty to be paid to Iras.

However, on Jan 12, 2016 — a day before the scheduled completion of the property purchase — Kang was unable to contact Zhang to confirm payment of the remaining sum.

Tan, the then real estate agent, later told Kang that Zhang had been detained by the Chinese authorities. Kang then found news articles reporting that Yucheng Group was under investigation for fraud in relation to Ezubao, and that several suspects had been detained by the Chinese authorities since December 2015.

The next day, Kang contacted Zhang’s personal assistant, who confirmed that Zhang had been detained by Chinese authorities since December 2015.

The property transaction was not completed as the remaining sum was not paid, the court heard.

In subsequent months, Kang came across news articles stating that the Ezubao platform was a Ponzi scheme, and that Yucheng Group’s chairman, Ding Ning, had used illicit money to buy lavish gifts for Zhang, who was his girlfriend.

Ezubao folded in 2016 after collecting US$9.14 billion from 900,000 investors via savvy marketing. Ding has since been sentenced to life in prison and a 100 million yuan (S$20.9 million) fine for crimes including illegal fundraising, illegal gun possession and smuggling precious metals.

Zhang Min and 24 others at Yucheng were jailed for 3 to 15 years.

Despite knowing this, Kang did not file a suspicious transaction report with the authorities. She was later approached by Zhang’s mother to apply for a refund of the stamp duties paid for the Sentosa property, which Kang submitted to Iras accordingly around April 2016.

Tan, the then real estate agent, was charged in November last year for similarly failing to report the suspicious property deal to the authorities. The pre-trial conference for his case will be held on April 26.

Read more of the latest on

Advertisement

Popular

Advertisement

Stay in the know. Anytime. Anywhere.

Subscribe to get daily news updates, insights and must reads delivered straight to your inbox.

By clicking subscribe, I agree for my personal data to be used to send me TODAY newsletters, promotional offers and for research and analysis.

Aa