S$28m fine for mastermind of largest duty-unpaid alcohol syndicate busted in Singapore

SINGAPORE — A 41-year-old man, who masterminded a scheme to divert an “unprecedented amount” of duty-unpaid liquor meant to be exported inland and sell it at much lower prices, was fined about $28 million on Thursday (July 14).

From 2017 to 2019, Lim Wei Luen evaded goods and services taxes (GST) on alcohol he sold in Singapore by illegally diverting alcohol meant to be exported and consumed aboard sea-faring vessels. 

He ran the syndicate with another man, Teo Tian Soon. It grew to become the largest and long-running one in Singapore, with the total amount of excise duty and GST evaded across the entire operation standing at about S$25 million.

On Thursday (July 14), Lim pleaded guilty to two charges under the Customs Act.

This was in relation to evading S$100,000 in GST as well as S$3 million in excise duty, which is levied on goods manufactured in or imported into Singapore.

District Judge Lee Lit Cheng ordered Lim to serve six years and eight months’ jail if he cannot pay the fine.

Another 16 similar charges were taken into consideration for sentencing.

HOW IT WORKED

The court heard that Lim became acquainted with Teo, who is also known as Muhammad Ridwan Teo, after they met at Pasir Panjang Port in 2017.

Lim supplied vessels that were anchored outside port limits in order to avoid port charges or pilot dues, while Teo worked as a ship chandler, buying alcohol for vessels from suppliers whose stock is held at licensed warehouses.

Such duty-unpaid alcohol can only be removed from the warehouses through an appropriate cargo clearance permit, known as an OX permit.

The pair then hatched an “elaborate scheme” to fraudulently evade paying excise duty and GST on such alcohol that was diverted into Singapore to be sold, instead of being exported to vessels.

The first part of the scheme involved buying duty-unpaid alcohol from a supplier, setting up shell entities to be declared as exporters, and forging OX permits.

Teo was mainly responsible for this and also had help from one Vernon Quek. Both men were extremely familiar with the practices, protocols and regulations of the shipping industry, prosecutors told the court.

They recruited individuals or "tua pek kongs" to lend their names as directors or sole proprietors for the shell entities, which would be declared the exporters on the OX permits.

The Hokkien term "tua pek kong" is common underground slang for those who are paid to take the fall for others.

As for Lim, he was mainly responsible for the second part of the scheme — collecting, consolidating, distributing and selling the duty-unpaid alcohol to buyers here. For example, he paid other men weekly salaries to act as drivers for the alcohol deliveries.

The syndicate was busted in November 2019 during a Singapore Customs sting operation.

On Nov 7, Customs officers saw a truck leaving a licensed warehouse. It should have offloaded its cargo of duty-unpaid alcohol at Marina South Wharves but went to the vicinity of Pioneer Point Warehouse instead, where the alcohol was transferred into a white van.

The officers then arrested those at the scene before nabbing the other syndicate members, including Lim.

For his role in the syndicate, Teo was jailed one year and fined almost S$48 million in June this year. He has to serve another 105 months’ jail if he cannot pay the fine.

Quek was fined about S$36 million and jailed another nine months for forgery. Several others have also been prosecuted and dealt with for their crimes.

Lim was represented on Thursday by Mr Josephus Tan and Cory Wong from Invictus Law Corporation, who sought the sentence imposed.