Shell heist: Mastermind admits siphoning $128m of gas oil

One of the masterminds of a massive conspiracy to misappropriate gas oil from Shell Eastern Petroleum's Pulau Bukom site was convicted on Tuesday (Feb 8) of siphoning nearly $128 million worth of the marine fuel.

Prosecutors are seeking a jail term of 359 months - a month shy of 30 years - for Juandi Pungot, 45, who admitted that he began embezzling gas oil from his former employer in 2007.

The Singaporean is the first of three key players to be dealt with for his role in the conspiracy.

He pleaded guilty to 20 charges of criminal breach of trust for misappropriating gas oil valued at about $128 million in total between 2014 and 2018.

Juandi also pleaded guilty to six corruption charges for bribing independent surveyors to turn a blind eye to the misappropriation and 10 charges for laundering his ill-gotten gains.

Another 49 similar charges will be taken into consideration when he is sentenced at a later date.

For his part in the conspiracy, Juandi obtained at least $5.6 million in criminal proceeds, which he spent on designer watches, two cars including a Mercedes Benz GLC 250, a condominium unit at Regentville in Hougang, and properties in Bangkok and Batam.

He also went gambling with his ill-gotten gains, converting more than $550,000 into casino chips at the Marina Bay Sands on 175 occasions between 2012 and 2016.

He and his co-conspirators also invested in a halal Japanese restaurant called The 3 Amigoes in Singapore and a restaurant in Johor Baru.

Juandi, who joined Shell in June 2004 as a process technician, last drew a salary of $6,000 with overtime pay as a shore loading officer.

His job scope was primarily to facilitate the transfer of Shell's petroleum products at Pulau Bukom to client vessels.

The Pulau Bukom site is Shell's largest petrochemical production and export centre in the Asia Pacific region.

Juandi admitted that he first became involved in the misappropriation of gas oil in 2007, along with his colleague, Abdul Latif Ibrahim.

They sold the fuel to vessels at a price below market value.

Between 2008 and mid-2013, the pair expanded their "illegal loading" operation to more bunker ships and recruited more colleagues into their criminal enterprise.

One key player, Muzaffar Ali Khan, was recruited sometime between end 2007 and early 2008.

Juandi received between $10,000 to $15,000 per illegal loading.

In 2013, there was a falling out after the group discovered that Latif had kept approximately half the criminal proceeds prior to splitting the remainder with the others.

After Latif left the group, they took a hiatus but resumed their illicit activities in 2014.

According to Juandi, they decided to target vessels with Vietnamese and Greek captains because it was "well known" in the industry that such individuals would readily conduct illegal oil trading.

The syndicate used various methods to evade detection for years, leveraging their combined knowledge of Shell's internal systems.

They configured the flow of misappropriated gas oil through carefully planned routes in the piping system and also ensured multiple pumps and tanks were moving at the same time to mask the misappropriation.

The bunker meter and the orientation of surveillance cameras were tampered, and they coordinated their activities in group chats that were subsequently deleted.

They also paid off surveyors to cover up the unauthorised transfers.

In early 2015, Shell began observing significant unidentified oil loss at Pulau Bukom.

It first engaged a group of experts from its other offices to conduct a technical and process review, which failed to detect the misappropriation.

In 2017, Shell engaged a global management consultancy to conduct a five-week review. This investigation, too, did not provide a conclusive explanation for the losses.

Shell then engaged a global multidisciplinary team of Shell analysts to monitor tank movements. It was this team which detected the unauthorised transfer of gas oil to vessels.

Shell made a police report on Aug 1, 2017.

Juandi tendered his resignation on Dec 5, 2017, after he heard rumours of a police investigation.

However, he continued to be involved in the collection and distribution of proceeds from the misappropriation of gas oil.

Juandi was arrested on Jan 7, 2018, before he collected the proceeds from an illegal loading.

Deputy Public Prosecutor Christopher Ong urged the court to jail him for 359 months, given the unprecedented scale and complexity of the misappropriation.

Juandi's lawyer, Mr Noor Marican, sought 15 years' jail, arguing that he was not the sole mastermind and that he has been cooperative with investigations.

Two other process technicians have been convicted for the roles.

Muhammad Ashraf Hamzah, 39, was sentenced to 91/2 years' jail for misappropriating gas oil worth nearly US$25 million (S$33.6 million) between 2014 and 2016.

Sadagopan Premnath, 40, was sentenced to six years and eight months' jail for his role in misappropriating gas oil worth about US$36.1 million between 2017 and 2018.

His appeal is pending.

Shell has since taken numerous measures, estimated to cost $6 million, to improve its systems and processes.