SINGAPORE: A director of a Singapore wholesale trading company illicitly supplied more than S$6 million worth of luxury goods to North Korea over more than six years, breaching international sanctions imposed by the United Nations.
For his acts, 57-year-old Singaporean Ng Kheng Wah was sentenced to two years and 10 months' jail on Friday (Nov 22).
He pleaded guilty to 10 charges under the United Nations Act and 10 cheating charges, with another 140 charges taken into consideration.
His firm, T Specialist International, was fined S$880,000, which the judge allowed to be paid in instalments by October next year.
Ng's accomplice, China national Wang Zhiguo, 57, was given a year's jail after pleading guilty to 10 charges of cheating, with another 71 charges taken into consideration.
The court heard that Ng had supplied prohibited luxury goods through T Specialist to Korean Bugsae Shop, a department store chain in the Democratic People's Republic of Korea, between November 2010 and January 2017.
The goods included wines, perfumes, cosmetics, jewellery, musical instruments, leather bags and expensive watches.
They were supplied to North Korea via Dalian, China, with Ng deliberately concealing their intended destination by failing to declare the final port of delivery to Singapore Customs.
Under the UN (Sanctions - DPRK) Regulations 2010, it is illegal for any Singaporean or person in Singapore to sell any luxury item to anyone in North Korea.
Ng’s conviction is the first of its kind in Singapore under the United Nations (Sanctions - DPRK) Regulations 2010, and his company is the first to be convicted under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation and Benefits) Act.
HE ALSO CHEATED BANKS INTO ISSUING LOANS FOR NON-EXISTENT GOODS
On top of the luxury good trades, Ng also committed invoice-financing fraud amounting to more than US$95 million (S$129 million), as the North Korean owner of Korean Bugsae Shop was failing to make payments for the shipments he received.
To generate liquidity, Ng used false invoices purportedly issued by a company owned by Wang to T Specialist, in order to deceive five banks into granting the millions in trade financing loans to T Specialist for goods that did not exist.
These goods were Watari-brand instant noodles. To further give the banks the impression that the transactions were genuine, T Specialist shipped a few hundred cartons of instant noodles in 2014 to create the perception that Ng was indeed transacting in instant noodles.
A total of 81 fictitious invoices for these "noodles" were produced and submitted to the banks, which include DBS Bank, CIMB Bank Berhad, Malayan Banking Berhad, RHB Bank Berhad and Oversea-Chinese Banking Corporation.
Believing the invoices to be genuine, the banks made payment of the invoice amounts to Wang's company, and the funds were cycled back to the bank accounts of T Specialist and its affiliated companies.
Wang, a long-time friend and close business associate of Ng's, abetted the cheating of the banks by allowing his company to be used in the fictitious invoices.
He provided templates of his company's commercial invoices to Ng, knowing that they would be used to deceive the banks into believing that his company had sold goods to T Specialist, even though there were no such sales.
There was ultimately no loss to the banks, as Ng repaid them in full for the fictitious invoice financing loans, said Deputy Public Prosecutors Alan Loh and Thiam Jia Min.
Those involved were nabbed when the Commercial Affairs Department of the Singapore Police Force received information that Ng and his businesses may be involved in money laundering. It lodged a police report in August 2017.
The prosecutors urged the court to impose sentences of at least three years and four months' jail on Ng, a S$1.07 million fine on T Specialist, and 18 months' jail on Wang.
They pointed out the harm caused to Singapore's reputation and international standing, as well as an increased risk for the broader Singapore financial and economic sectors as a result of the offences.
NG MET WANG, NORTH KOREAN BUYER WHEN IT WAS NOT ILLEGAL TO SELL TO HIM: DEFENCE
Defence lawyers Edmond Pereira and Amardeep Singh, who represented Ng and T Specialist, asked for 26 to 30 months' jail for Ng, and a fine of S$400,000 for the company.
They said Ng, who is married with four children, became acquainted in the 1990s with Wang and the North Korean man he later sold goods to.
This was when there were no international of Singapore-based legal restrictions against commercial trade with North Korea. Singapore imposed a complete prohibition on commercial trade with the country in November 2017.
The lawyers argued that the goods traded were "not of high quality" and were intended to be sold to the ordinary citizens of North Korea, "who have been severely deprived of items of everyday use due to the imposition of international sanctions" against the country.
Wang's lawyers Derek Kang and Lucas Lim asked for 10 to 12 months' jail for their client, saying the offences were not committed for his personal gain and that he did not profit from them.
Wang, who became a Permanent Resident of Singapore in 2003, has been law-abiding since he first came here in 1995, said the lawyers.
They added that Wang was "deeply regretful" of his actions after discovering how Ng had used the transactions "in a manner that he would not have approved of".
SUCH ILLICIT TRADE RAISES QUESTIONS ABOUT SINGAPORE'S COMMITMENT TO THE SANCTIONS: JUDGE
Senior District Judge Bala Reddy said the sanctions regime put in place by the UN will only be effective if every member state including Singapore adheres to them.
"Such illicit international trade affects the ... country's national commitment and raises questions about its commitment," he said.
He added that money laundering is detrimental to society and said the sentences imposed must carry a deterrent effect and "reinforce out determination to stamp out any international criminal activity that is carried out within our shores".
For each of the charges under the UN Act, Ng could have been jailed for up to five years, fined a maximum S$100,000, or both.
For each cheating charge and or abetment of cheating, both men could have been jailed for up to 10 years and fined.