A 37-YEAR-OLD Singaporean man who was the director of 980 companies in Singapore was sentenced to four weeks’ jail and fined S$57,000 on Monday (Dec 18).

This came after a number of companies he watched over were found to be used for money laundering.

The man, Xie Yong, got involved with these companies as he offered accounting and corporate services to foreign clients who wanted to incorporate companies in Singapore.

Most of his clients were from China, the court heard. He started providing the services to the Chinese market in 2020 after advertising his company, DD Corporate Services, on a Chinese online forum and getting contacted by multiple Chinese agents thereafter.

The agents would refer Chinese clients to him, and Xie started offering a S$700 package which entailed providing “nominee director” services, corporate secretarial services and a registered company address. 

From 2020 to 2021, he registered himself as a director of these companies to fulfil Singapore’s statutory requirement for a local resident director.

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The court heard that the money laundering activities happened despite him getting his clients to sign an indemnity agreement stating that they would not engage in illegal activities.

And while Xie knew it was important to make sure that the companies he incorporated for his clients were not engaging in illegal activity beyond a simple online search, he did not do anything to check if that was the case, Deputy Public Prosecutor Janice See said.

Xie admitted that he only intended to get information about these companies’ business and activities at the end of the financial year, when he was to file their annual returns.

He would then apply to strike off the companies if he found out that they were engaging in illegal activities, See added.

As at January 2021, Xie was a director of 980 companies, of which 831 were active and current appointments, the court heard.

The matter came to light after police reports were lodged in Singapore, in respect of a case of cheating involving two transfers totalling more than US$1.5 million.

The transfers were made from Armor Survival, an American company which fell victim to a business impersonation scam in October 2020.

The Singapore company tied to this case is Wei Hui, a purported bags, luggage and travel accessories trading company which Xie had helped to incorporate on Feb 25, 2020.

Behind Wei Hui is a certain Xiao Weian, who told Xie that he wanted to incorporate a company to get a bank account so he could circumvent foreign currency restrictions in China.

Xie helped Xiao without querying him on why he needed a bank account in Singapore, or whether Wei Hui had any business activity in the Republic, See pointed out.

By the time the discovery was made, several large sums of money had already been transferred in and out of the bank account – a DBS multi-currency account.

Separately, larger sums of money were laundered through an OCBC account under a company called Joy Trader, which Xie took over as director of in June 2020, the court heard.

The money – some US$3.1 million – belonged to the Jewish Federation of Greater Washington. It was part of the US$7.5 million that the American company was deceived into transferring to accounts in Hong Kong.

Xie in total faced 49 charges, including failure to exercise reasonable diligence in the discharge of his duties as a director of Wei Hui and Joy Trader.

In seeking a sentence of four to six weeks’ jail for Xie, See noted that his culpability was compounded as he had roped in another individual to stand as director for the companies, after discovering that he had been blacklisted by local banks.

That person was Lan Fang, a 51-year-old Chinese national and Singapore permanent resident who moved to Singapore in 2017 and stayed a housewife till 2021. Xie met her through her daughter Lan Yun Li, who had worked for him in DD, and paid her S$50 per “nominee directorship” she assumed.