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Banks Probed In Massive Malaysian Money-Laundering Fraud

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Banks Probed In Massive Malaysian Money-Laundering Fraud

By Pathay Singh on 07/25/16

Singapore vowed to take action against four banks for failures in anti-money laundering controls and seized S$240 million (HK$1.37 billion) in assets linked to alleged fraud at the Malaysian state investment company known as 1MDB.

Preliminary findings uncovered instances of control failings at UBS Groups Singapore branch, Standard Chartereds local unit and DBS Group Holdings, as well as substantial breaches of anti-money laundering regulations at Falcon Private Bank in the city-state, the Monetary Authority of Singapore said yesterday. The regulators probe, which started in March 2015, is part of global investigations into 1Malaysia Development Bhd that stretch across Abu Dhabi, Switzerland, the Caribbean, Hong Kong and the US.

More than US$3.5 billion (HK$27 billion) was misappropriated from the Malaysian firm, and about US$1 billion laundered through the US banking system, the US Justice Department said on Wednesday as it launched what could potentially be its biggest ever seizure for such ill-gotten gains.

Supervisory examinations of financial institutions with 1MDB- related fund flows have revealed a complex international web of transactions involving multiple entities and individuals operating in several jurisdictions, the Singapore central bank said. Certain financial institutions in Singapore were among those used as conduits for these transactions and MAS will be taking action against them.

Singapore authorities have been investigating various 1MDB-related fund flows through the island nation for possible money laundering, securities fraud, cheating and other offenses committed in the city. Bank accounts belonging to various people with Malaysian Prime Minister Najib Razak among them were seized and dealings in properties belonging to them curtailed, it said. About S$120 million in the accounts and properties belonged to Malaysian financier Low Taek Jho and his immediate family, it said.

Low has said he provided consulting to the fund that did not break any laws. Efforts to reach him for comment on Thursday via his Hong Kong-based company Jynwel Capital were unsuccessful, and the firm did not immediately reply to an e-mailed query on the asset seizure.

DBS and Standard Chartered spokesmen said in separate statements that the banks were cooperating with authorities, noting that both lenders had reported the suspicious transactions to the relevant agencies. Standard Chartered had strengthened its anti- money laundering controls, a spokesperson said. Representatives for UBS and Falcon did not immediately respond to requests for comment.

Source: The Standard