SINGAPORE: Conveyancing lawyer Kang Bee Leng was fined S$10,000 on Tuesday (Apr 17) for failing to flag to the authorities a suspicious transaction involving more than S$5 million by a Chinese tycoon to buy property in Sentosa Cove.
This was despite her suspicion that the money was linked to a multi-billion dollar Ponzi scheme in China after reading reports of her client’s arrest.
Kang, the 56-year-old managing director of Sterling Law Corporation, pleaded guilty to the charge on Tuesday morning. She could have been fined up to S$20,000.
A property agent, Tan Yen Hsi, referred Zhang Min to Kang in October 2015. Tan described Zhang, the president and CEO of Yucheng International Holdings Group, as a “high-net-worth client”.
Kang was to represent Zhang in transactions to purchase a property in Sentosa – 38 Lakeshore View – for S$23.8 million.
Kang never met her client in person. They corresponded by email, through which Zhang provided her identification documents, payslips and income tax records needed for the purchase of the property.
Between October and November 2015, Zhang paid more than S$5.4 million towards the purchase of the property, including S$1,190,000 for the Option to Purchase, S$12,581 in conveyance fees to Kang’s law firm and S$4,278,600 in stamp duties to the Inland Revenue Authority of Singapore.
When Kang tried to contact her client on Jan 12, 2016, a day before the scheduled completion of the property purchase, but she received no response. She called Tan, the property agent, who told Kang that according to reports, Zhang had been detained by Chinese authorities.
Kang discovered Zhang’s Yucheng Group was under investigation for fraud in relation to its peer-to-peer lending platform Ezubao, and that Zhang had been detained since Dec 8, 2015.
Kang called Zhang’s husband to tell him that payment for the Sentosa property was due, but he said that he had no idea where his wife was after she had been arrested.
A few months later, Kang read that Ezubao was a Ponzi scheme worth S$10.8 billion. Reports also said that Zhang, was also the girlfriend of Ding Ning, the chairman of Yucheng Group, and he had bought Zhang lavish gifts, including a property worth US$20 million in Singapore.
Although Kang became suspicious that the money Zhang used towards the purchase of the Sentosa Cove property represented criminal proceeds from the alleged Ponzi scheme, she did not flag the transactions or file a Suspicious Transaction Report.
The Commercial Affairs Department received information in February 2016 of Zhang’s intention to buy the Sentosa Cove property, and of Zhang’s legal troubles in China. An investigation led the CAD to Kang.
The CAD has seized S$4.2 million paid to IRAS for stamp duties.
Tan, the property agent, has been charged and will appear in court later this month.
Read more at https://www.channelnewsasia.com/news/singapore/sentosa-cove-chinese-tycoon-lawyer-fined-suspicious-transaction-10146278