SINGAPORE: A mastermind behind a scheme to forge audit documents, in order to cover up how his company had overcharged the Singapore Prison Service for goods and services, was given 15 months' jail on Thursday (Apr 8).
Loo Yew Tek, 50, pleaded guilty to 30 charges, mostly of conspiring to use a forged document as genuine, with another 88 charges taken into consideration. He was already serving a 14-month jail term for other charges related to this case when he received the fresh sentence.
The court heard that there was no way for the Auditor-General's Office (AGO) to determine the total amount of loss caused to the prisons, as Loo had directed for the documents to be discarded.
Loo was the senior project manager of Thong Huat Brothers – one of the oldest civil engineering and building contractors in Singapore – and a director at Innova Development at the time of the offences.
He had several accomplices in the scheme, including Chew Tee Seng, the manager of the prisons' infrastructure development branch at the time, who was jailed for 10 months in 2016.
In July 2011, the AGO began conducting an audit on the Singapore Prison Service and asked them for supporting documents on certain works performed by Thong Huat in the financial year of 2010. The firm had performed the works under a contract it had with the Ministry of Home Affairs.
The works were managed by CPG Facilities Management on behalf of the prisons, and the business-to-business firm received a fee of 4.5 per cent on the value of the works.
Thong Huat, the main contractor, was supposed to call for quotations from potential subcontractors and submit claims for the procurement of certain goods and services, and submit three quotations to CPG for the prison works.
Typically, CPG would recommend the lowest quotation to the prison service, and Thong Huat would also need to prepare an itemised list with details of the work before commencing.
However, when the AGO asked for supporting documents for audit purposes, CPG officers realised they did not have a complete set of required documents from Thong Huat.
These documents included subcontractors' quotations as well as forms and invoices, and they were missing because of supervision lapses by CPG and the prison service as they failed to ensure that Thong Huat had duly submitted the documents, said the prosecution.
The conspirators then held a meeting in August 2011, where Loo admitted that some previously submitted quotations and invoices were false documents prepared by Thong Huat's quantity surveyor.
He said they could not submit these documents to AGO, and had them discarded. Loo also told the conspirators that the rates indicated on the lowest quotations and subcontractor invoices submitted to the prison service had been marked up by Thong Huat.
Thong Huat had in fact overcharged the prison service, as it paid a lower amount to the subcontractor than what was declared in the forms and quotations. Loo said he knew about this overcharging and that Thong Huat did so to make up for a 57.2 per cent discount it was giving.
Loo shared about his previous encounters with the AGO on some Police Coast Guard projects, and said he expected their auditors to persist in their requests for the documents that his company would not be able to furnish.
He then suggested preparing "backdated" lowest quotations to circumvent the issue. Chew, the manager of the prisons' infrastructure development branch at the time, agreed.
Chew compiled multiple forged documents and they were submitted to the AGO as genuine documents.
AGO FLAGS LAPSES
However, AGO reviewed the documents and highlighted several lapses to the prison service management on the procurement process. Chew, acting on behalf of the prisons, lodged a police report in May 2012 over the forged documents, and the Commercial Affairs Department uncovered the scheme.
Prosecutors called for 15 months' jail for Loo, calling him the prime mover and "mastermind" of the scheme. Loo had perpetuated fraud against a public institution, with a "large" amount involved in the case that caused tangible harm to the prison service, they said.
Over eight months, 126 forged documents were submitted to defraud the AGO and disrupt its audit of the prison service.
"In the present case, the accused's actions threatened the belief and expectation by Singaporeans that government contractors who are awarded contracts from public funds do not overcharge public institutions and thereafter cover up their overcharging through forged documents," said the prosecutors.
"Compared to all the sentencing precedents, the accused and the co-conspirators forged and used a much larger number of documents," they added.
"Unlike the precedents, the public institution which the accused persons were defrauding is not any ordinary government department, but the AGO. Unlike other government departments which spend public funds for the public good, the AGO is the very public institution tasked with the responsibility of checking and auditing all the other government departments."