Man admits involvement in forged invoices scheme that cheated Iras of $772k
A 42-year-old former taxi driver who became a company director has pleaded guilty to his role in a forgery scheme that cheated the Inland Revenue Authority of Singapore (Iras) of around $772,200 in goods and services tax (GST) claims.
Lee Chong Hoong was recruited as the nominee director of shell company Nagore Trading in June 2015 for a monthly pay out of at least $10,000.
His job scope included signing all Nagore's invoices and paperwork, which included endorsing sales invoices.
The court heard that the Singaporean had been told that the company's operation involved a scheme with "grey areas" such as tax evasion and claiming tax refunds from the Iras.
He was also told that if he got caught, the worst outcome would be a jail term of less than a year, or a fine.
Between February 2015 and January 2016, Lee and others in the company forged at least 183 invoices involving sales of more than $56.5 million.
By the time Iras found out about the scheme, it had paid out $722,189 to exporters.
The court heard that he worked with nine other men on the ruse and made a personal profit of at least $80,000, which he has not made restitution for.
The others involved were Johnson Ang Chee Keong, 46; Alvin Chua Han Soon, 43; Ryan Wong Meng Fai, 44; Mark Tay Tiong Kiong, 44; Choon Chee Keong, 48; Koh Soo Lin, 62; Marcus Tan Boon Leong, 49; Luke Giam Zi Hin, 40; and Trinh Tien Dung, a Vietnamese man whose age was not mentioned.
Chua, Wong, Tay, Ang and Koh, who are Singaporeans, were charged in court in August. It is not clear whether Tan, Giam and Trinh have been arrested.
Lee was on Wednesday convicted of one count of carrying on the business of a company for a fraudulent purpose.
Two other charges of abetting forgery will be taken into account for his sentencing on Oct 6.
The scheme involved forging sales invoices to give the impression that Nagore had paid local suppliers for goods and sold the items to other companies.
These buffer companies Nagore "sold" goods to were in on the scheme. They forged invoices to other businesses involved, though there was no actual trade carried out.
At the end of the chain, the masterminds of the scheme - which included Trinh and Giam - allegedly convinced exporters to buy the non-existent goods and sell it abroad to a buyer they had arranged for.
To convince exporters that the sale was genuine, the masterminds arranged for physical goods to be delivered to them.
The exporters paid the buffer companies the selling price of the goods with GST included, which made up the source of the scheme's criminal proceeds.
Not knowing that the transactions were a sham, the exporters then claimed GST tax refund from Iras.
When Iras detected fraudulent activity and withheld paying out the claims, the exporters bore the loss of GST they had paid to the buffer companies.
For carrying on a business for a fraudulent purpose, Lee can be fined up to $15,000 and jailed for up to seven years.
The cases of Chua, Wong, Tay, Ang and Koh will be heard at a later date.