The Offences And Legal Consequences Of Money Laundering
Oct 25, 2023
Money laundering is a process which often involves a deliberate and complex scheme employed by criminals to disguise the criminal origins of their funds. The scheme would normally involve the passing of criminal funds through various financial institutions and/or systems so as give the impression that the said funds originated from legitimate sources.
Singapore takes a tough stance against money laundering offences, which is a concern for criminal lawyers. This article seeks to provide a brief overview of the offence of money laundering.
The central legislation that criminalises money laundering is the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (“CDSA”). The first thing to understand is that the CDSA criminalises the laundering of proceeds related to drug dealing offences and serious offences (or what the CDSA term collectively as “criminal conduct”). Drug dealing offences are found in the First Schedule of the CDSA while serious offences are found in the Second Schedule of the CDSA.
There are four main types of money laundering offences covered by the CDSA:
1. Assisting another to retain benefits of drug dealing/criminal conduct. This is an offence under Sections 50(1) and 51(1) of the CDSA, both of which can be summarised as follows:
A person who enters into, or is otherwise concerned in an arrangement, knowing or having reasonable grounds to believe that by the arrangement —
- the retention or control by or on behalf of another (called in this section that other person) of that other person’s benefits of drug dealing or criminal conduct is facilitated (whether by concealment, removal from jurisdiction, transfer to nominees or otherwise); or
- that other person’s benefits of drug dealing —
- are used to secure funds that are placed at that other person’s disposal, directly or indirectly; or
- are used for that other person’s benefit to acquire property by way of investment or otherwise,
and knowing or having reasonable grounds to believe that that other person is a person who carries on or has carried on drug dealing or has benefited from drug dealing, shall be guilty of an offence.
Defence: It should be noted that an accused person can raise the defence (amongst other defences) that he did not know and had no reasonable ground to believe that the arrangement related to any person’s proceeds of drug dealing or criminal conduct.
Punishment: Any person who commits such an offence shall be liable on conviction to: (a) if the person is an individual, to a fine not exceeding $500,000 or to imprisonment for a term not exceeding 10 years or to both; or (b) if the person is not an individual, to a fine not exceeding $1 million or twice the value of the benefits from criminal conduct in respect of which the offence was committed, whichever is higher.
2. Concealing, disguising, converting or transferring benefits of drug dealing/criminal conduct. This is an offence under Sections 53(1) and 54(1) of the CDSA, both of which can be summarised as follows:
Any person who —
- conceals or disguises any property which is, or in whole or in part, directly or indirectly, represents, the person’s benefits of drug dealing or criminal conduct;
- converts or transfers that property or removes it from the jurisdiction; or
- acquires, possesses or uses that property,
shall be guilty of an offence.
Punishment: Any person who commits such an offence shall be liable on conviction to: (a) if the person is an individual, to a fine not exceeding $500,000 or to imprisonment for a term not exceeding 10 years or to both; or (b) if the person is not an individual, to a fine not exceeding $1 million or twice the value of the property in respect of which the offence was committed, whichever is higher.
3. Assisting another to conceal, disguise, convert or transfer benefits of drug dealing/criminal conduct. This is an offence under Sections 53(2) and 54(2) of the CDSA, both of which can be summarised as follows:
Any person who, knowing or having reasonable grounds to believe that any property is, or in whole or in part, directly or indirectly, represents, another person’s benefits of drug dealing —
- conceals or disguises that property; or
- converts or transfers that property or removes it from the jurisdiction,
shall be guilty of an offence.
Punishment: Any person who commits such an offence shall be liable on conviction to: (a) if the person is an individual, to a fine not exceeding $500,000 or to imprisonment for a term not exceeding 10 years or to both; or (b) if the person is not an individual, to a fine not exceeding $1 million or twice the value of the property in respect of which the offence was committed, whichever is higher.
4. Acquiring benefits of drug dealing/criminal conduct. This is an offence under Sections 53(3) and 54(3) of the CDSA, both of which can be summarised as follows:
Any person who, knowing or having reasonable grounds to believe that any property is, or in whole or in part, directly or indirectly, represents, another person’s benefits of drug dealing or criminal conduct, acquires that property or has possession of or uses such property, shall be guilty of an offence.
Punishment: Any person who commits such an offence shall be liable on conviction to: (a) if the person is an individual, to a fine not exceeding $500,000 or to imprisonment for a term not exceeding 10 years or to both; or (b) if the person is not an individual, to a fine not exceeding $1 million or twice the value of the property in respect of which the offence was committed, whichever is higher.
Upcoming changes
The Ministry of Home Affairs (“MHA”) have recently proposed amendments to the CDSA[1]. The amendments seek to disrupt the operations criminal syndicates and will empower the Police to act against money mules. The MHA define money mules as such:
“Money mules are typically individuals who hand over control of their payment accounts, e.g. bank accounts, to criminals, or who use their payment accounts to receive or transfer monies under the instruction of criminals.”
The MHA has noted the problem that the Prosecution currently faces in proving that a money mule had knowledge or reasonable grounds to believe that the monies transacted through his bank account are linked to criminal activity. As such, they are seeking to introduce the new offences of rash and negligent money laundering:
“Where the money is found to be proceeds of crime, it is proposed that it be an offence if a person acted rashly by proceeding to carry out transactions while he had some suspicion but he did not make further enquiries to address those suspicions. A person who acted negligently by continuing with a transaction despite the presence of red flags that are noticeable by an ordinary, reasonable person, can also be liable for an offence.”
Additionally, consideration must also be had to the offence of “assisting another to retain benefits from criminal conduct”:
“a person can also be deemed liable for a money laundering offence if:
- the value of the property he dealt with is disproportionate to his known sources of income;
- he allowed another person(s) to access, operate or control his payment account and failed to take reasonable steps to find out the purpose of this arrangement;
- he received or transferred money in his payment account and failed to take reasonable steps to find out the source or destination of the money; or
- he received money from or transferred money to another person(s), and failed to take reasonable steps to find out that person’s identity and physical location.”
The MHA has suggested the following punishments for the new offences:
“The offence of rash money laundering will carry a maximum fine of up to $250,000 or imprisonment of up to five years, or both. The offence of negligent money laundering will carry a fine of up to $150,000 or imprisonment of up to three years, or both. The offence of assisting another to retain benefits from criminal conduct will carry a maximum fine of up to $50,000 or imprisonment of up three years, or both.”
As can be seen from the forecited CDSA provisions, if a person assists in the money laundering process, the said person might be guilty of a money laundering offence. As such, it must be stressed that one ought to zealously guard against any unauthorised and/or suspicious use of one’s bank account. Indeed, it bears reminder that severe consequences will await an accused person convicted of a money laundering offence.
