1MDB probe: Falcon Bank branch head is 5th person charged in Singapore

SINGAPORE — The dragnet of Singapore’s 1 Malaysia Development Berhad (1MDB) money-laundering probe widened on Thursday (Jan 5) with a fifth person charged for his role in shady transactions worth over a billion dollars.

Swiss national Jens Fred Sturzenegger, who was Singapore branch manager of Falcon Private Bank, faces 16 counts of failing to report suspicious transactions and for providing false information to the authorities, including lying that he had never met Malaysian financier Low Taek Jho, a central figure in 1MDB investigations worldwide. The alleged offences took place between 2013 and last year.

Sturzenegger, 42, who is bald and bearded, appeared in court with his lawyer Tan Hee Joek. He is expected to plead guilty and is out on bail of S$80,000. His case will be heard again next Wednesday.

He allegedly connived in Falcon’s failure to report to the Commercial Affairs Department (CAD) a suspicious infusion of US$1.265 billion into two bank accounts in March 2013. 

The source of funds was not mentioned in court papers. But according to previous media reports based on legal papers filed by the United States Department of Justice, the amount was part of US$3 billion that 1MDB raised through Goldman Sachs for the development of the Tun Razak Exchange in Kuala Lumpur, that was fraudulently diverted to Falcon bank accounts. Falcon’s Singapore branch was ordered to cease operations by the Monetary Authority of Singapore last year.

According to court papers, one of the two bank accounts belonged to an entity called Granton Property Holding Limited, and US$378 million flowed out of that account to Dragon Market Limited on March 25, 2013. The money was used in connection with a potentially criminal act, stated court documents. 

The bank was also instructed around March 2013 to transfer another US$62 million from Granton’s account to three entities – Silver Coast Construction and Boring LLC, Densmore Investment Limited and River Dee International SA – for potentially criminal uses. Court documents did not mention who had given the instructions. Sturzenegger allegedly had reason for suspicion, but failed to report the information to the authorities.

He also allegedly failed to report a suspicious transaction of US$9.2 million, on March 25, 2013, from the account of a company called Midhurst Trading Limited to Helly Nahmad Gallery.
The beneficial owner of these three bank accounts, and a fourth, was Eric Tan but the transactions were orchestrated by Mr Low, a court document stated. Mr Tan is reportedly an associate of Mr Low.

Mr Low allegedly used the email account erickimloong.tan [at] gmail.com to communicate with Falcon bank, and Sturzenegger supposedly knew this, but lied to MAS and CAD officers so they would not probe connections between him and Mr Low. Sturzenegger allegedly told the CAD last September that he had never met Mr Low, when in fact he did so at least twice, including on Feb 2, 2012.

Sturzenegger is also accused of instigating Ms Cindy Widjaja, head of compliance of Falcon’s Singapore branch, in July 2015 to provide the MAS with false information that the bank was dealing with Mr Tan when it was instead dealing with Mr Low.

Before Sturzenegger, the bankers hauled to court by prosecutors have been from BSI, which has also been ordered to shut here. Last year, Yak Yew Chee and Yvonne Seah Yew Foong were convicted of helping to forge documents and failing to report suspicious transactions. Yak was sentenced to 18 weeks’ jail and fined S$24,000, while Seah was handed two weeks’ jail and a S$10,000 fine.

Last month, Yeo Jiawei was sentenced to 30 months’ jail on four charges of witness tampering. He faces seven other charges involving cheating, money laundering and forgery. Yeo had a close relationship with Mr Low, who is considered by Singapore police to be a “key person of interest” in the money laundering probe.

A fourth person, former remisier Kelvin Ang Wee Keng, was charged on April 20 last year with corruptly giving gratification of S$3,000 to a research analyst, allegedly to expedite the preparation of a favourable valuation report on a 1MDB asset held in Cayman Islands. He was released from remand in May on bail of S$100,000.

Meanwhile, 1MDB, a state investment fund founded in 2009 by Malaysian Prime Minister Najib Razak, has denied wrongdoing.