Singaporean triggered FBI probe with fake boat repair firm that was used to launder US$580,000

SINGAPORE: A Singaporean man who owed a loan shark S$2,500 set up a fictitious boat repair company with two corporate bank accounts to repay his debt, and ended up sparking a Federal Bureau of Investigation (FBI) probe.

The court heard that the accounts were used to launder US$580,000 (S$794,000).

Muhammad Ibrahim was on Wednesday (Jan 8) sentenced to 27 months’ jail after he pleaded guilty to one charge of facilitating the control of the benefits of criminal conduct.

Another charge of failing to exercise reasonable diligence in the discharge of his duties as a company director was taken into consideration during his sentencing.

The 38-year-old found the unlicensed moneylender through a Facebook advertisement sometime around November 2021.

Deputy Public Prosecutor David Koh said Muhammad borrowed $2,500 after agreeing to a 10 per cent deferment fee for each week the loan was not repaid.

When he could not repay the loan, the moneylender said they would write off his loan if he opened a corporate bank account for their use.

Muhammad agreed, and approached a corporate services provider to set up PNS Trading Services on Dec 2, 2021.

The unlicensed moneylender paid the $500 incorporation fee.

Muhammad was the sole director and shareholder of the firm, whose business was purportedly for the “building and repair of pleasure crafts, lighters and boats” and “chartering of ships and boats with crew (passenger)”.

Muhammad registered the company under his home address.

Said DPP Koh: “In reality, the company had no business activities, as the accused intended to use it only to open corporate bank accounts which he could hand over to the unlicensed moneylender.”

Muhammad opened two corporate bank accounts in the name of PNS Trading Services and handed their online banking details and one-time passwords to the unlicensed moneylender.

DPP Koh said he did not exercise any supervision over the accounts.

He added that Muhammad was aware that money was being funnelled in and out of one of them, as he was receiving hard copies of its bank statement via mail.

The prosecutor said Muhammad knew the unlicensed moneylender would use the bank accounts to receive and store illegal funds, and he was aware that it was wrong for him to hand over a bank account for another person to control.

However, he did not want to probe further, as he was afraid his debt would not be written off.

On Feb 10, 2022, the Commercial Affairs Department (CAD) received a complaint from the FBI. It was regarding a wire transfer of US$200,000 to one of PNS Trading Services’ bank accounts.

The FBI was following up on a report lodged in the US by an Astra Bergson Kook, whose corporate e-mail account was compromised with scammers sending instructions to Astra’s bank to transfer money to PNS Trading Service’s bank account.

The CAD seized the bank account the same day it received the complaint from the FBI, but by then the funds had already been dissipated to entities in China.

On March 10, 2022, the CAD seized the company’s other bank account. It turned out this other account was also used to receive funds.

A few months later, on June 15, 2022, the law enforcement agency in Singapore was alerted by the FBI that US-based company Milojo Downtown had transferred US$380,000 to the second account on March 4 that year.

It happened after hackers hijacked the e-mail account of an employee of Milojo and used it to issue wire transfer instructions to Milojo’s bank.

The stolen funds were already dissipated to entities in China by the time the second account was closed, but US$239,400 was recalled on March 22, 2022.

A total of US$240,243.60 from this account was eventually returned to Milojo via a court order.

Muhammad was arrested on Aug 26, 2024.

In court, DPP Koh argued for Muhammad to be sentenced to between 28 and 34 months’ jail, noting the substantial amount involved.

He said the offence involved a transnational element, adding that apart from the victims in the US, Muhammad believed the unlicensed moneylender was from Malaysia.

The prosecutor accepted that Muhammad’s role in the offence was only in the establishment of corporate entities and the opening of the bank accounts, and that he did not deal directly with the tainted funds after that.

For the offence, Muhammad could have been jailed for up to 10 years, fined up to $500,000 or both. – The Straits Times/ANN