Jail for director of a S’pore firm that shipped more than S$6 million in luxury goods to North Korea [2019]

It was reported in 2019 that a Singaporean company director had been jailed for illegally supplying luxury goods to North Korea and for cheating five banks in the process.

For over six years, Ng Kheng Wah violated United Nations (UN) sanctions by supplying more than S$6 million worth of luxury goods — including wines, spirits, jewellery and cosmetics — to the reclusive state.

During this period, Ng also worked with his long-time friend and business associate, Wang Zhiguo, to cheat more than US$95 million (S$129 million) from five banks.

Both men, as well as Ng’s general wholesale trade firm — T Specialist International — were dealt with in a district court on Friday (Nov 22) for their criminal actions.

The court heard that the duo used fake invoices, purportedly issued by Wang’s company to T Specialist, to deceive the banks into granting fraudulent loans to generate liquidity for Ng’s firm.

The loans were for non-existent goods that Wang’s company “sold” to T-Specialist, including Watari-brand instant noodles, Pokka drinks and White Rabbit candies.

After pleading guilty to various charges under the United Nations Act and the Penal Code, Ng, 57, was sentenced to two years and ten months in jail.

T Specialist was fined S$880,000, and Wang — a 57-year-old Chinese national and Singapore permanent national — was jailed for one year for his role in the scheme.

SHIPPING OF LUXURY GOODS

The court heard that under Ng’s instructions, T Specialist supplied luxury goods to a department store chain in North Korea — the Korean Bugsae shop — from November 2010 to January 2017.

Under UN sanctions, it has been illegal to directly or indirectly supply luxury goods to North Korea since 2006. Singapore also suspended all commercial trade with Pyongyang in November 2017.

The company supplied the goods over 79 occasions, shipping them through Dalian, China. Ng deliberately hid that they were destined for North Korea by failing to declare the final delivery port to Singapore Customs.

On one occasion in March 2013, T Specialist shipped about S$381,000 worth of perfumes, cosmetics, musical instruments and precious jewellery there.

The shipping manager and purchaser of T Specialist, Ms Sherly Muliawan, oversaw the administrative details, such as ensuring payments were made to the firm. She has not been charged.

The Bugsae Shop owner, Mr Li Ik, and his son Li Hyon — who studied in Singapore before 2014 — paid T Specialist through front companies in China and Hong Kong.

CHEATING OF BANKS

Towards the end of 2013, Mr Li Ik owed T Specialist about US$20 million for their ordered goods.

Ng then developed a fraudulent invoice financing scheme to overcome his firm’s cash flow problem.

From January 2014 to August 2016, T Specialist submitted fake commercial invoices on 81 occasions to five banks in Singapore.

It could then fraudulently obtain invoice financing loans for non-existent goods purportedly sold by Pinnacle Offshore Trading to T Specialist. The bulk of these goods were Watari-brand instant noodles.

Wang was the sole director of Pinnacle, a company incorporated in the British Virgin Islands.

Under the scheme, Wang gave Ng and Ms Sherly blank soft-copy templates of Pinnacle’s commercial invoices with his digital signature.

On Ng’s instructions, Ms Sherly filled in the templates and submitted the completed invoices to DBS Bank, CIMB Bank, Maybank, RHB Bank and OCBC.

To further give the banks the impression that the transactions were genuine, T Specialist shipped a few hundred cartons of instant noodles abroad sometime in 2014, so the banks believed Ng was transacting with them as part of his business.

The most significant sum that any of the banks delivered to T Specialist was US$2.8 million, which was disbursed by Maybank to Pinnacle’s bank account in March 2015 after it received a fake invoice for a trade financing loan.

NG REPAID BANKS IN FULL

In their sentencing submissions, the prosecution and both men’s lawyers agreed that the banks had ultimately not suffered any losses. Ng had repaid the banks in full for the fictitious loans.

In mitigation, Ng’s lawyers, Edmond Pereira and Amardeep Singh, argued that Ng and T Specialist did not profit from their offences and that the luxury goods traded actually “fell mainly within the class of items intended for everyday use”.

“As far as our clients were aware, these goods were intended to be sold to ordinary citizens of North Korea… who have been severely deprived of items of everyday use due to the imposition of international sanctions,” the lawyers added.

They also pleaded for a lighter sentence due to Ng’s failing health, as he had suffered two strokes in the past few months.

Meanwhile, Wang’s lawyers, Derek Kang and Lucas Lim, argued that Wang was unaware of the full extent of Ng’s actions and fully cooperated with the Commercial Affairs Department in investigations.

Source

Published November 22, 2019

Updated November 22, 2019

https://www.todayonline.com/singapore/jail-director-spore-firm-shipped-more-s6-million-luxury-goods-north-korea