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Ex-BSI banker Yeo Jiawei jailed 54 months in 1MDB-linked case

SINGAPORE — A former wealth planner, who was among the first to be charged in connection with a global probe into 1MDB, was on Wednesday (July 12) jailed for 54 months by a Singapore court for money laundering and cheating.

The Malaysian Insider file photo

The Malaysian Insider file photo

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SINGAPORE — A former wealth planner, who was among the first to be charged in connection with a global probe into 1MDB, was on Wednesday (July 12) jailed for 54 months by a Singapore court for money laundering and cheating. 

The sentence meted out to Yeo Jiawei, 34, was the heaviest among the five individuals convicted in the Republic so far in connection to the investigation.

Yeo is currently about halfway into a 30-month jail term, which he has to serve after he was earlier found guilty of a separate charge of tampering with witnesses central to the probe into the Malaysian state fund.

He will serve the remaining portion of the previous sentence concurrently with the new jail term.

On Wednesday, Yeo was sentenced for a charge of cheating his former employer, BSI Singapore, and another charge of laundering a part of his cheating proceeds into Singapore. Eight other charges were taken into consideration.

Yeo, a close associate of Malaysian tycoon Low Taek Jho, had voluntarily undertaken to surrender all the illicit gains accounted for in charges made against him, and give up the money in all bank accounts owned by him here to the authorities.

Mr Low has been identified by the authorities in Singapore as a “key person of interest” in ongoing investigations into 1MDB.

Yeo, who last held a directorial position in BSI before leaving to work for Mr Low in 2014, has also undertaken to liquidate assets he owned in Australia, and transfer proceeds to the authorities here.

In sentencing, Principal District Judge Ong Hian Sun agreed with prosecutors that Yeo’s offences warrant a deterrent sentence as he had abused the “high level of trust” placed in him by the bank.

The judge added that Yeo was aware that the laundered funds were “benefits of criminal conduct”, and he had gone to great lengths to conceal the laundering.

The courts must take an “uncompromising stance” in meting out sentences for offences in this category to “safeguard the integrity and reputation of our financial system”, the judge said.

The court heard that Yeo, who was charged in April last year, had plotted with BSI’s then-head of wealth management services Kevin Michael Swampillai to secretly profit from the bank’s transactions involving fiduciary funds, as they knew the business was “extremely lucrative” because of the large annual fees paid by clients.

Through the use of corporate intermediaries, referral fee arrangements, as well as a bank account owned by Yeo’s parents, the duo devised a scheme to get a cut of management fees paid by a 1MDB subsidiary, Brazen Sky.

Their scheme involved two sets of transactions that resulted in Yeo pocketing more than US$3.5 million (S$4.8 million) in illicit profits, part of which were laundered into Singapore, the court heard.

The first, named Project Retail, took place in 2012 and involved an agreement for BSI to assist 1MDB in restructuring its interest in a subsidiary owned by PetroSaudi, with which 1MDB had entered into a joint venture.

Yeo had “significant involvement” in this project, including preparing initial proposals for Mr Low and recommending a fund manager.

To facilitate the illicit scheme, Yeo instructed an associate, Mr Samuel Goh, to negotiate with the fund managers for fees to be capped at US$500,000 per year, with the balance paid as “referral fees to connected persons” — most of which were eventually pocketed by Yeo and Mr Swampillai.

To conceal this clandestine arrangement, fees flowed through a series of intermediaries beneficially owned by Yeo, Mr Swampillai and Mr Goh.

The court heard that in November 2012, Yeo transferred US$500,000 to bank account “Yishun Aquarium” — a Singapore partnership owned by his parents.

The second set of transactions took place in mid-2013 under Project Mexican, where Yeo again played a significant role in the further restructuring of Brazen Sky’s “investment”, with Yeo and Mr Swampillai also pocketing a portion of referral fees as kickbacks.

The Monetary Authority of Singapore (MAS) announced in May the completion of an intensive two-yearlong review of banks connected to 1MDB-related transactions known to date.

The MAS had issued prohibition orders (POs) against four individuals and served notices of intent to issue POs against three others for various regulatory breaches.

In addition, the authority had closed two merchant banks — Falcon Bank and BSI Singapore — and fined eight banks a total of almost S$30 million.

Speaking last month at the release of the MAS’ annual report, the central bank’s managing director Ravi Menon stressed that upholding high standards of integrity in the financial industry is “an absolute priority for MAS”.

This was why it has taken a serious view of the lapses in anti-money laundering controls among some financial institutions here in connection with suspicious 1MDB-related transactions, and had undertaken a rigorous investigation of these transactions, he said.

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