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Over 9 years' jail for key figure in scam to cheat Iras of S$11.8m in productivity grants

SINGAPORE — A co-conspirator who played a key role in a fraud to cheat the Inland Revenue Authority of Singapore (Iras) of over S$11.8 million through the now-defunct Productivity and Innovation Credit (PIC) scheme was on Monday (March 7) sentenced to 112 months’ jail for cheating offences.

Over 9 years' jail for key figure in scam to cheat Iras of S$11.8m in productivity grants
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  • Lim Chit Foo, 38, pleaded guilty to 20 charges related to a scam to cheat the Inland Revenue Authority of Singapore
  • The scam involved fictitious claims under the now-defunct Productivity and Innovation Scheme (PIC)
  • Dozens of other people have been charged over the scam, with most already dealt with in court
  • Foo received S$1.14 million into his own bank account from the scam
  • He was jailed for 112 months, to be served after he completes another jail term for obstructing justice

SINGAPORE — A co-conspirator who played a key role in a fraud to cheat the Inland Revenue Authority of Singapore (Iras) of over S$11.8 million through the now-defunct Productivity and Innovation Credit (PIC) scheme was on Monday (March 7) sentenced to 112 months’ jail for cheating offences.

In a news release, the police said that Lim Chit Foo will commence his sentence at the expiry of the 40 months’ jail sentence he had previously received in 2019 for obstruction of justice.

Lim, 38, had pleaded guilty to 20 cheating charges in connection with the PIC fraud scheme and was convicted on Jan 12.

The PIC scheme, introduced in Budget 2010, granted tax deductions or allowances, or both, to businesses that invested in specified productivity and innovation activities.

Businesses were able to claim as much as 400 per cent in tax deductions or allowances on qualifying expenses of up to S$400,000.

They were also given the option to convert up to S$100,000 of total spending for each assessment year into a non-taxable cash payout, instead of claiming tax deduction.

The scheme expired after the 2018 assessment year.

The police on Monday said that Lim had faced 411 other charges for the offences of cheating, money laundering and possession of forged Accounting and Corporate Regulatory Authority (Acra) records, which were taken into consideration for sentencing.

They added that 212 of Lim’s cheating charges were for engaging in a conspiracy with two other people — identified as Wang Jiao and Li Dan — to cause companies to submit fraudulent PIC claims to Iras.

Court proceedings against the two are ongoing, the police said.

The police said that 230 firms — which comprised mostly of dormant and shell companies — were used to submit 400 allegedly fraudulent PIC claims to Iras between April 2015 and September 2016.

The claims involved the fictitious purchases of software made by the applicants from a pool of six shell vendor companies.

The police said that to evade detection of his involvement in the fraud, Lim did not register himself as a director or shareholder in any of the companies, and his name was absent from the PIC claims.

Instead, Lim recruited several people to be nominee directors for the companies.

“The nominee directors’ Singpass credentials were used for the submission of fraudulent PIC claims on behalf of the companies.

“Pursuant to Lim’s instructions, some nominee directors also opened corporate bank accounts, or used existing bank accounts to receive the PIC payouts disbursed by Iras on the approved PIC claims,” the police said.

The police added that Lim would then further instruct the nominee directors on how to dispose of the monies, “including depositing monies into his own personal bank accounts”.

“In doing so, Lim acquired criminal proceeds of around S$1.14 million, which were the subject of his money laundering charges.”

The police said that Lim’s conspiracy to defraud the PIC scheme came to light when Iras detected forged documents submitted by one of the nominee directors as part of the PIC application process.

The police said that 37 nominee directors have been charged with “failing to exercise any supervision over the affairs of the companies that they were directors of, thereby facilitating the PIC fraud”.

Thirty of the nominee directors have since been convicted and sentenced to fines of between S$4,000 and S$9,000, as well as disqualified from being a director of companies for a period of between three and three-and-a-half years, the police said.

Court proceedings against the remaining seven are ongoing.

Related topics

court crime Iras fraud business Productivity Innovation Credit scheme

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