Sweetlands Childcare ex-director fined for making $133k of unauthorised deductions
Despite being told repeatedly that her scheme to loan money to parents who owed school fees was not allowed, the former director of childcare centre chain continued to abuse the system, making more than $133,000 in unauthorised withdrawals from Child Development Accounts (CDA).
Over close to four years, former Sweetlands Childcare director Chan Chew Shia, 58, worked with the parents of 34 children to deposit money from the childcare centres into their CDAs. This caused the Ministry of Social and Family Development (MSF) to disburse matching contributions under the Baby Bonus Scheme.
Chan was fined $90,000 on Tuesday (Jan 25) after she was convicted of 30 counts of breaching the Child Development Co-Savings Regulations. Another 124 similar charges were taken into consideration.
She paid half of the fine on Tuesday and will have to pay the remaining amount by July 25.
As part of the Baby Bonus Scheme, parents can open a special savings bank account, a CDA, and be the trustees of the account.
To help build savings in the accounts, the Government would match any savings deposited into the account on a dollar-to-dollar basis up to a certain amount, depending on when the child was born.
The court heard that sometime in 2011, Chan came up with a "matching scheme" where she would give loans to parents who owed outstanding school fees or other childcare expenses to Sweetlands Childcare.
The scheme involved withdrawing funds from the childcare centres' bank accounts and depositing them into each child's account to get the MSF to make its contribution.
Since Chan was an "approved person" under the Sweetlands Childcare brand, she could make withdrawals from CDAs for authorised purposes.
But she used contributions from MSF to pay the outstanding school fees owed to the childcare centres, which was not allowed.
Deputy Public Prosecutor Cheng Yuxi told the court that on Sept 7, 2010, Chan was wrongly advised over the phone by a MSF customer service staff member that her scheme was allowed.
But before she committed her first offence, MSF officers told her she should not make the deductions from the CDAs for loan repayment. She was advised again in May 2011 and April 2014.
But Chan made the unauthorised transactions till March 2015.
In total, $133,674 was deducted for loan repayments and Chan has refunded $5,880.
DPP Cheng told the court that Chan's acts "compromised the structure of the CDA and its purposes" and questions were raised in Parliament on what the MSF intended to do to tighten control over the CDA.
Since the offences, among other measures, MSF has closely monitored Sweetlands Childcare centres and amended the terms and conditions of the approved persons or institutions to clearly state that withdrawing money from a CDA to recover money that the person has deposited into it is not allowed.
Chan's lawyers Julian Tay and Theodora Kee from Lee and Lee told the court that their client was forced to step down from her role at Sweetlands Childcare.
They argued that she did not gain from the scheme, and said: "Her desire all along was for all children to have access to pre-school education."
For each charge of making unauthorised withdrawals from a Child Development Account, Chan could have been fined up to $20,000.
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