$28m fine for mastermind behind S'pore's largest syndicate involving duty unpaid alcohol
Two men masterminded a scheme that became the largest and longest-running syndicated operation involving duty unpaid alcohol uncovered in Singapore. The total amount of taxes evaded was about $25 million.
The syndicate diverted, for local sale, duty unpaid alcohol meant for consumption on board vessels calling at Singapore, fraudulently evading the excise duty as well as goods and services tax (GST) payable on the beverages.
One of the masterminds, Lim Wei Luen, now 41, has pleaded guilty to two charges under the Customs Act involving the fraudulent evasion of excise duty and GST totalling more than $3,114,858.16. Sixteen other charges were considered during sentencing.
On Thursday (July 14), he was fined a whopping $28,033,723.44, which is nine times the amount evaded.
Lim will spend six years and eight months behind bars if he is unable to pay the fine.
The other mastermind, Teo Tian Soon, also known as Muhammad Ridwan Teo, 56, was earlier sentenced to a year's jail and a fine of nearly $48 million.
Several other offenders linked to the case, including Teo's nephew Sheir Azman Mohamed Khalid, 33 and Vernon Quek Beng Yong, 47, were also dealt with in court earlier.
The court heard that the Singapore Customs allows alcohol to be supplied to vessels calling here for crew members to consume. The suppliers of such alcohol and other items - collectively known as "sea stores" - are known as ship chandlers.
The two main terminals in Singapore used for ship chandling purposes are Marina South Wharves (MSW) and Penjuru Terminal.
Ship chandlers buy the alcohol from suppliers whose stocks are held at licensed warehouses.
The warehouse will then make a declaration via the Singapore Customs' online system for a cargo clearance permit with the prefix "OX" to be issued.
This allows the alcohol to be removed from the warehouse.
When the duty unpaid alcohol is sent to Penjuru Terminal or MSW, the OX permits must be endorsed by an auxiliary police officer (APO) on duty at the entrance gates.
He will mark the documents with his APO stamp and the duty unpaid alcohol can then be transported to the receiving vessel.
Teo and Lim hatched their scheme after they met in 2017. At the time, Teo was a ship chandler.
The scheme involved the purchase of duty unpaid alcohol from a supplier, setting up of shell entities to be declared as exporters, and forgery of the OX permits.
Nine shell entities were formed, and Azman, who was then working as a shipping agent at MSW, headed two of them.
Azman also shared with Teo, his uncle, the names of APOs on duty and the vessels which would be calling at the wharves. Teo forged OX permits and made a copy of an APO stamp in Malaysia to avoid detection.
The OX permits would then be falsely endorsed, such as by using the fake APO stamp.
The men's offences came to light on Nov 7, 2019, after the Singapore Customs conducted an operation to arrest suspects involved in the syndicate, the court heard.
Lim was represented by lawyers Josephus Tan and Cory Wong from Invictus Law Corporation.
They said in their mitigation plea that their client had cooperated with the authorities and his guilty plea would have to be given due credit.