Singaporean siblings Lee Ay Ling, 33, and Lee Chia Yen, 30, were each sentenced to 10 months in jail on Wednesday, December 17, for their roles in a scheme that facilitated an international business email impersonation scam. The pair ran Interconnect, a business that provided nominee directors for companies incorporated in Singapore.
Exploiting Pandemic-Era Loopholes
Interconnect capitalized on changes in banking practices during the COVID-19 pandemic. In April 2020, Lee Ay Ling learned that some banks were accepting video conferencing for identity verification, a shift from prior in-person requirements. The siblings incorporated 109 companies in 2020, utilizing two Singaporeans as nominee directors.
The scheme involved sourcing clients through a Chinese agent, Chen Guang, who claimed to represent businesses seeking to incorporate in Singapore. Interconnect relied on documents provided by Chen Guang – passports, identification cards, business licenses – with minimal independent verification beyond basic online searches.
Nominee Directors and Criminal Proceeds
Lee Ay Ling and Lee Chia Yen recruited Chng Kok Leng Bernard and Tay Chee Seng to serve as nominee directors, offering them S$250 per company, twice a year, for a role requiring minimal involvement. Both men raised concerns about potential liability and the possibility of the companies being used for illicit purposes, but were assured by the Lees that Interconnect would conduct due diligence and ensure compliance with Singaporean law.
Chng served as a nominee director for 52 companies, earning S$13,000, while Tay served as a nominee director for 57 companies, earning S$14,250. Accounts at United Overseas Bank (UOB) linked to these companies received approximately US$14.6 million (S$18.9 million) traced back to victims of business email impersonation scams.
One instance involved Hang Yi, a company incorporated in June 2020 with Chng as a nominee director. In September 2020, the company received US$10 million from a Belgian firm, Grib Diamond NV, following fraudulent email instructions. The funds were subsequently transferred to accounts in Hong Kong, mainland China, and Singapore and have not been recovered.
Stricter Enforcement and Future Implications
This case marks the first conviction of a corporate service provider following a recent High Court decision establishing a stricter sentencing framework for offenses involving “silent” directors. Chng and Tay, the nominee directors, were previously convicted and sentenced to six and four weeks in jail, respectively, and were also banned from acting as directors for five years. The Lee siblings were also banned from acting as company directors for five years.
It is possible that this conviction will lead to increased scrutiny of corporate service providers in Singapore and a greater emphasis on Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance. Authorities may also pursue further investigations into similar schemes and the individuals involved. A possible next step could be a review of existing regulations governing nominee director arrangements.
Frequently Asked Questions
What was Interconnect’s role in the scam?
Interconnect provided nominee directors for companies incorporated in Singapore, facilitating the creation of shell companies used to receive funds from victims of an international business email impersonation scam.
What happened to the money stolen from the Belgian company?
The US$10 million received by Hang Yi, a company incorporated through Interconnect, was remitted to accounts in Hong Kong, mainland China, and Singapore and has not been recovered.
What is a “silent” director?
A “silent” director is someone who is appointed as a director of a company but does not exercise oversight or actively participate in its management.
How might this case impact the future of corporate service providers in Singapore?
