What happens to criminals' ill-gotten gains?
An islandwide blitz by the Singapore Police Force (SPF) on Aug 15 led to the arrest of 10 foreigners, including five who were subsequently charged with an anti-money laundering law.
The Corruption, Drug Trafficking and other Serious Crimes (Confiscation of Benefits) Act (CDSA) seeks to combat corruption, drug dealing and other serious crimes, including money laundering.
The law allows the authorities to immediately seize or freeze assets, or block any further transactions.
In the current case, the police took control of around $1 billion worth of assets in Singapore, including 105 properties, 50 vehicles, more than 250 luxury bags and watches, and more than 270 pieces of jewellery.
The items include Patek Philippe watches, Hermes bags and Rolls Royce cars.
The Straits Times spoke to lawyers and luxury goods dealers to understand the legal procedures, and the care needed for the items confiscated, which include expensive bottles of wine.
Q: What is the CDSA?
A: The law, which came into effect in November 1992, allows the authorities to immediately seize or freeze assets, or block any further transactions. The first time it was enforced was in 1994, when more than $1 million in cash and valuables belonging to drug suspects were seized by the courts.
Lawyer Cory Wong, director at Invictus Law Corporation, said the law can be enforced as long as some link is established to show criminal activity.
“There is no need to even wait until the person is formally convicted by the court, which could take months or even years for the legal proceedings to conclude,” he added.
It also possible to confiscate assets acquired by a third party or close relative.
The law was amended in May 2023 to deal with money mules, allowing prosecution of those who sell their payment and Singpass accounts.
Q: What happens to the assets which are seized, frozen and blocked from being sold?
A: Once the law is enforced, the State can immediately take control of the assets, including properties, which belonged to the accused person or persons.
Said Mr Wong: “The assets might well just sit in storage to collect dust, but at the same time, the law recognises that an accused person might well be acquitted at the end of the day.”
Under the Criminal Procedure Code, the police will take custody of physical things such as electronic devices, cash or personal belongings, said lawyer Eugene Thuraisingam, of Eugene Thuraisingam LLP, in a paper published online.
As for money in bank accounts or shares, the police will usually issue an order that prevents the financial institution or account holder from dealing with the money. An order will be issued for any property as well, to prevent the holder from dealing with it.
Mr Wong said that there are legal safeguards put in place to prevent authorities from selling off the frozen assets while the case is ongoing.
Q: How long can confiscated assets be held by the police?
A: The assets can be held until the conclusion of the case.
Mr Wong said: “Simply put, the assets can be frozen by the authorities for as long as the case requires, or in other words, for as long as it takes for the conviction or acquittal.”
Q: How will the luxury handbags, watches and wine need to be maintained in storage?
A: The items seized from the 10 suspects in the billion-dollar money laundering case include luxury handbags by fashion houses like Hermes, Chanel, Dior, Louis Vuitton and Prada. Some of the bags cost upwards of $100,000 on the market.
Ms Florence Long, founder of LuxLexicon, a luxury handbag reselling business, said the bags have to be handled with care to maintain their value.
“They are to be stored in a temperature-regulated room with special care to avoid harsh lighting, dust and humidity,” said Ms Long.
She added that the bags, which are predominantly made of leather, have to be handled with gloves to avoid any contact with perspiration.
Mr William Tan, manager of luxury watch dealer Watch Exchange, said watches must be kept dry under room temperature.
“They should be kept away from sunlight, moisture and dust. The watches should be laid flat and with the dial facing up.
“The watches should also be wound at least once a month,” he said.
He added that the certificates that come with the watches should be stored properly as well. “Without it, the value of a watch will drop by around 20 to 30 per cent,” said Mr Tan.
Mr Richard Lee, director of Estate Wines, said the bottles of wine confiscated should be stored in a place where the temperature is between 18 and 20 degrees. He added that not all wines can be aged for prolonged periods.
“No other special treatment is needed. Besides temperature, the bottles should be well managed with no vibration and little direct lighting. The bottles should also be well insulated to avoid moisture gathering,” he said.
Q: How are confiscated assets disposed of?
A: In court, the prosecutor has to prove that the accused person held assets that are disproportionate to their known sources of income.
When this is proven, the law provides for the assets to be confiscated at the conclusion of the case.
“If linked to serious crimes like money laundering, the State will have power to confiscate the money or assets, upon conviction of the accused person,” said Mr SS Dhillon, senior partner at Dhillon and Panoo LLC.
The court will then hold a disposal inquiry.
But there is no telling what will happen to the luxury cars, bags or watches after they are confiscated.
“There are currently no provisions under the law that dictates what the State will do with the seized assets,” he added.
Mr Wong said a sheriff’s sale could be performed if the Court orders the assets to be sold by public auction.
“This is done to liquidate the non-cash asset into cash so whatever proceeds from the auction can be used to satisfy the monetary claims ordered against the respondent,” he added.
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