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CNA Explains: What happens to scam proceeds and can victims get back their money?

Why is it so difficult to recover money from scams, and what are the chances of victims getting back what they lost?

CNA Explains: What happens to scam proceeds and can victims get back their money?

A photo of a scammer stealing a credit card through a laptop. (Photo:iStock)

SINGAPORE: Scams are on the rise, and have come under the spotlight in Singapore following several high-profile cases.

None more so than the Tradenation luxury goods scam, which saw victims lose tens of millions of dollars. 

The couple allegedly behind it, Singaporean Pi Jiapeng and his Thai wife Siriwipa Pansuk, were charged in court with cheating offences on Aug 12.

But the case also left people wondering just what would happen to the money they allegedly scammed. 

Latest statistics reveal the crime is showing no signs of abating. 

Last year, it drove up Singapore's overall crime levels yet again. 

Of the 46,196 reported crimes in 2021, more than half – or 23,931 cases – involved scams, increasing from the year before when scams made up about 40 per cent of all cases.

The figure also marked a 53 per cent surge from the reported 15,651 scam cases the year before. 

Overall, the total amount cheated for the top 10 scam types rose to S$504.4 million last year, from S$175.2 million the year before.

Just how difficult is it to claw back such scam proceeds, and what chance do victims have of getting their money back?

How much money is recovered from scams?

In June 2019, the Anti-Scam Centre (ASC) was set up to disrupt scammers’ operations and help mitigate victims’ losses. 

Since then, it has received scam reports with losses amounting to more than S$822 million. Of this, it has recovered more than S$200 million to date, or about 25 per cent of the amount lost, said Law and Home Affairs Minister K Shanmugam in a written reply to a parliamentary question last month.

Last year alone, the ASC received more than 23,800 scam reports with losses amounting close to S$520 million, according to the 2021 annual crime statistics. In the same period, it recovered more than S$102 million. 

What happens to proceeds from a scam?

Bank accounts suspected to be involved in scam operations will be frozen by the police, and the money will be seized as proceeds of crime.

In 2021, the ASC froze more than 12,600 bank accounts. 

The ASC also works with the Monetary Authority of Singapore and financial institutions to swiftly freeze bank accounts suspected to be involved in scams, to enhance the chances of recovery.

In 2020, the ASC started a collaboration between police and more than 60 institutions. Once the police are notified of a scam, most bank accounts suspected to be involved in scammers’ operations can be swiftly frozen within a day, as opposed to the 14 to 60 working days previously.

The time taken for money to be returned to the victims depends on the circumstances. Factors include whether there are multiple claimants and if the money is still relevant for the purposes of investigation or trial or other court proceedings.

Lawyer K Anparasan, managing director at Whitefern LLC, said: "In such a scenario where the amount recovered is less and there are multiple victims, the court will then decide how to allocate the recovered monies after hearing the victims who come forward."

Why is it so difficult to recover the money from scammers? 

In the annual crime statistics for 2021, the police said at least 90 per cent of scams in Singapore originate from overseas. These scammers were also described as “syndicated, well-resourced and technologically sophisticated”.

Such cases are difficult to investigate and prosecute, as efforts will be dependent on the level of cooperation from overseas law enforcement agencies, police added.

Mr Danny Ong, a partner in law firm Rajah & Tann's Fraud, Asset Recovery & Investigations and Dispute Resolution practices, said that most modern-day scams will involve the transfer of money overseas and the laundering of such money. And this adds to the complexity of the recovery efforts.

“This is because significant efforts will have to be made to trace the monies through multiple layers of transferees across multiple jurisdictions, and the ability to do so will depend in part on the effectiveness of the law enforcement authorities and the courts as well as the differing laws in each jurisdiction,” he said.

“Additionally, the process of identifying the individuals operating the scams is no easy task if the scams are perpetrated in the virtual world and across borders," he added.

If the scam involves cryptocurrencies, this adds significantly to the challenges in a successful recovery, said Mr Ong.

What are the chances of victims getting back their money?

After police investigations are completed, the freeze on bank accounts will be lifted, and the investigation officer will apply for a disposal order from the courts to return the money to people entitled to them, said Mr Shanmugam in his written reply in parliament.

Mr Ong said that the prospects of recovery would vary depending on the facts of each case.

Important considerations would be the speed at which the victim acts, the speed at which the funds are transferred to other jurisdictions, and the ability to trace and freeze these funds wherever they may be traced to.

“Apart from lodging criminal complaints with the authorities, the victims may also have the ability to seek disclosure orders and freezing orders from courts in Singapore and elsewhere, to facilitate their investigation and recovery efforts,” he added.

Mr Anparasan said that cooperation between different jurisdictions is vital.

“However, differences in legal traditions, law and procedures, and sometimes language, often hinder the process of obtaining legal assistance,” he added.

"There is a high likelihood that the monies would have been dissipated and Claimants might not be able to trace the monies."

Will convicted scammers get lighter sentences if they pay back their victims? 

If money is recovered due to the scammers providing restitution to the victims, then that may be considered as a mitigating factor by the courts in considering the sentence, said Mr Ong.

“If the recovery is not due to any positive and cooperative action on the part of the scammers, then the fact that (the) victims have achieved some recovery will unlikely be relevant,” he added.

Besides restitution to victims, the amount of money that the scammers cheated will also be a mitigating factor when the court metes out sentences to the culprits, added Mr Anparasan. 

What should you do if you suspect you are a scam victim?

Immediately notify your bank and lodge a police report online via this website, or at any neighbourhood police centre. You can also call the anti-scam centre hotline at 1800-722-6688.

If you notice unauthorised bank transactions, call your bank immediately to report the matter. If there are signs of compromise, immediately suspend your bank account and ibanking facility with the bank.

Once a police report is made by a scam victim, officers will ask for more details to better identify the type of scam encountered and lodge the report accordingly.

An investigation officer will be assigned to the case and the ASC will be notified immediately. 

If needed, the centre will work with stakeholders like banks to trace and attempt to recover funds for victims.

The police may ask the bank to freeze the relevant accounts. The banks will also try to furnish other details to the police.  

Members of the public are also advised to keep themselves informed of the latest scam variant.

They can visit this website to learn more about the various types of scams and the steps to take to avoid falling prey to scams. 

Source: CNA/yb(gr)

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