Singapore recovered and returned over S$27m linked to Chinese Ponzi scheme

SINGAPORE — More than S$27 million of proceeds recovered in Singapore from one of the largest-ever Chinese Ponzi schemes was returned to China earlier this month, said the police on Tuesday (Aug 21).

The Ezubao scheme, which involved more than one million investors, folded in 2016 after collecting US$9.14 billion (S$12.49 billion) via savvy marketing.

In a news release, the police said that in May 2016, the Commercial Affairs Department (CAD) assisted China’s Economic Crime Investigation Department (ECID) in tracing assets in Singapore related to their investigation into Ezubao.

After discovering that more than S$27 million of criminal proceeds had been transferred to Singapore, the CAD alerted the Chinese authorities. The CAD and ECID, with the help of the Embassy of China in Singapore, then conducted a joint investigation on the matter in China and Singapore.

The money, which was linked to a multi-million dollar Sentosa Cove property deal, was subsequently seized.

In October 2015, Zhang Min, the former president of Yucheng Group which launched the Ezubao online peer-to-peer lending scheme, started on the purchase of a Lakeshore View property in Sentosa valued at S$23.8 million.

Between October and November, she paid her Singapore conveyancing lawyer Kang Bee Leng S$5,481,180 for conveyancing fees, an option to purchase, and stamp duty to be paid to the Inland Revenue Authority of Singapore.

In December, Zhang was detained by the Chinese authorities for her suspected involvement in Ezubao.

Even though Kang and Zhang’s real estate agent found out about her arrest, they failed to report the suspicious deal to Singapore authorities.

For that, Kang — also the managing director of Sterling Law Corporation — and Tan Yen Hsi, who used to be a senior marketing director at CBRE Realty Associates, were each fined S$10,000 earlier this year.

To date, the Beijing First Intermediate People’s Court in China has found 26 people, including Zhang, guilty of fraud and other offences. They were sentenced to between three years’ and lifetime imprisonment.

Following their sentencing, the CAD and ECID arranged for the seized money to be returned to China in order to facilitate restitution to the respective investors, in accordance with the Chinese legal framework.

The CAD added it found that no local entities were involved in money laundering activities in Singapore.

CAD director David Chew said: “This case is a testament to our commitment to work with our foreign counterparts to detect and deter transnational crime and preserve the integrity of our financial system. The strong ties between the police forces of China and Singapore are instrumental in ensuring that our financial system is not abused by criminals.”