SINGAPORE: Swiss national Jens Fred Sturzenegger was sentenced to 28 weeks' jail and ordered to pay a fine of S$128,000 on Wednesday (Jan 11), becoming the fourth banker here sent to prison for failing to report suspicious transactions involving billions of dollars linked to embattled Malaysian state fund 1Malaysia Development Berhad (1MDB).
Sturzenegger, a former branch manager of Falcon Private Bank in Singapore, pleaded guilty to six of 16 charges.
These were for failing to report potentially criminal transactions involving “astronomical amounts”, and for lying to the authorities in order to protect the financial interests of prominent Malaysian businessman Low Taek Jho. Mr Low owned four accounts at Falcon Bank through which he allegedly received “substantial sums” from 1MDB under “questionable circumstances”, court documents state.
Sturzenegger, 42, met Mr Low in February 2012. They were introduced in January by Sturzenegger’s boss but at that time, Mr Low had communicated using the name and email address of his close associate Eric Tan Kim Loong for "security reasons". It was only when the men met in Kuala Lumpur in February that Mr Low revealed his true identity.
Mr Low opened four accounts with Falcon in October that year, although the accounts remained dormant until March 2013, when a sudden influx of US$1.265 billion roused Sturzenegger’s suspicions.
Court documents state that Sturzenegger was “extremely apprehensive” about the inflow of such an “astronomical” amount, and doubted the legitimacy of the source of the funds. He called his boss, Eduardo Leemann, who in turn called Falcon’s then-chairman Mohamed Ahmed Badawy Al-Husseiny and Mr Low to voice Falcon’s concerns.
Mr Al-Husseiny is the former CEO of Aabar Investment PJS, the sovereign wealth fund of the UAE which is based in Abu Dhabi. He has also been linked to four fake companies set up under the Aabar name. These fake companies banked with Amicorp Bank, and they were referred to Amicorp by former BSI banker Yeo Jiawei who will go on trial in April for his involvement in 1MDB-related transactions.
FAILURE TO REPORT SUSPICIOUS TRANSACTIONS
Although Sturzenegger suspected that the billions were related to money laundering, he did not report the suspicious transactions to the Monetary Authority of Singapore (MAS), in breach of anti-money laundering regulations.
Furthermore, on Mar 21, 2013, Sturzenegger received instructions from Mr Low to transfer US$378 million from one of his Falcon accounts to the bank account of Dragon Market Limited - later established to be one of Mr Low’s companies that banked with Coutts & Co.
Between March and November 2013, a total of US$518.5 million was transferred between Mr Low’s accounts at Falcon and Coutts. Another US$476.3 million was transferred from the Coutts account to another of Mr Low’s accounts at BSI Bank in Singapore.
Sturzenegger again neglected to report the suspicious transaction, allowing Falcon to facilitate the pass-through of billions between Mr Low’s accounts with several banks.
When Falcon came under scrutiny in 2016 for its handling of 1MDB-related fund flows, Sturzenegger, “the most senior executive” in the bank's branch, lied to the MAS about the four accounts controlled by Mr Low in an attempt to steer the authority away from further probing these accounts.
He told the MAS that the accounts were “beneficially owned” by Mr Eric Tan - who often acted as Mr Low's proxy - despite knowing that in this case, Mr Low had impersonated Mr Tan and used his details to set up the accounts.
As investigations progressed, Sturzenegger tried to hide his ties to Mr Low, telling investigators that he had never met the elusive businessman or spoken to him on the phone.
Sturzenegger later admitted to lying when he was presented with “irrefutable objective evidence” of the communication that took place.
Falcon Private Bank was shut down last October by the MAS for serious failures in anti-money laundering controls and improper conduct by senior management. It was the second bank to be closed by Singapore regulators after Swiss bank BSI in May, over the 1MDB scandal.
NO FINANCIAL GAIN FROM TRANSACTIONS: LAWYER
Prosecutor Jacky Leong Weng Tat sought a jail term of 30 to 32 weeks with a fine of about S$150,000.
He said Sturzenegger’s failure to “shed light” on Mr Low’s dealings with Falcon had “frustrated” investigations. Seeing as Sturzenegger was the only person in Singapore with “personal knowledge of the truth” - that it was Mr Low, not Mr Tan, who controlled the accounts - he was able to “lead (investigators) down the wrong path”, thereby obstructing investigations.
Sturzenegger’s lawyer Mr Tan Hee Joek, on the other hand, argued that a jail term of between 20 and 24 weeks and a fine of S$104,000 would suffice, seeing as Sturzenegger did not gain financially from the transactions, unlike three other bankers convicted last year for their involvement in the scandal. The trio were bankers at BSI’s Singapore branch.
Former top banker Yak Yew Chee and his subordinate Yvonne Seah Yew Foong - both benefited in the form of millions in bonuses - were sent to jail for failing to report suspicious transactions involving Mr Low’s BSI bank accounts. Former wealth planner Yeo Jiawei also allegedly earned millions from working with the businessman.
Sturzenegger’s lawyer added his client will continue to assist authorities in the ongoing investigation.