Earlier Police News Releases dated 24 January 2019 and 30 August 2021 detailed a case involving the submission of fraudulent claims totalling over $11.8 million to the Inland Revenue Authority of Singapore (IRAS) under the PIC scheme[1] . A total of 40 individuals have been charged in court for their involvement in the fraud.
One of the co-conspirators behind the fraud, Lim Chit Foo (“Lim”), pleaded guilty to 20 cheating charges, and was convicted on 12 January 2022. He faced 411 other charges for offences of Cheating, Money Laundering and Possession of Forged ACRA records, which were taken into consideration for sentencing. 212 of Lim’s Cheating charges were for engaging in a conspiracy with two other individuals, Wang Jiao and Li Dan, to cause companies to submit fraudulent PIC claims to IRAS. The court proceedings against Wang Jiao and Li Dan are ongoing.
On 7 March 2022, Lim was sentenced to 112 months’ imprisonment. This sentence was ordered to commence at the expiry of the 40 months’ imprisonment sentence that he received on 16 January 2019 for instigating witnesses to give false information to the Police.
Between April 2015 and September 2016, 230 companies (“applicant companies”), which comprised mostly dormant and shell companies, were used to submit 400 fraudulent PIC claims to IRAS. These claims involved fictitious purchasesof software made by the applicant companies from a pool of six shell vendor companies.
[1] Under the PIC scheme, businesses can apply for tax deductions/allowances for expenditure on 6 qualifying activities that encourages productivity and innovation (e.g Training, Research and Development, etc).
To evade detection of his involvement in the fraud, Lim did not register himself as a director or shareholder in any of the companies, and his name was absent from the PIC claims. Instead, he recruited multiple individuals to be nominee directors for the companies. The nominee directors’ Singpass credentials were used for the submission of fraudulent PIC claims on behalf of the companies. Pursuant to Lim’s instructions, some nominee directors also opened corporate bank accounts, or used existing bank accounts to receive the PIC payouts disbursed by IRAS on the approved PIC claims. Lim would further instruct the nominee directors on how to dispose of the monies, including depositing monies into his own personal bank accounts. In so doing, Lim acquired criminal proceeds of around $1.14 million, which were the subject of his money laundering charges.
Lim’s conspiracy to defraud the PIC scheme came to light when IRAS detected forged documents submitted by one of the nominee directors as part of the PIC application process.
Further to this, 37 nominee directors were also charged for failing to exercise any supervision over the affairs of the companies that they were directors of, thereby facilitating the PIC fraud. Of the nominee directors charged, 30 nominee directors have since been convicted and sentenced to fines between $4,000 and $9,000, as well as disqualified from being a director of companies for a period between three and three and a half years. Court proceedings for the seven remaining nominee directors are ongoing.
The Police treat abuse of government grants seriously and will not hesitate to take action against such offenders. Offenders will be dealt with severely in accordance with the law.
SINGAPORE POLICE FORCE
07 March 2022 @ 6:15 PM