Man jailed for illegal transactions with North Korea, cheating
SINGAPORE — A director of a wholesale company which sold luxury items to North Korea was sentenced to two years and 10 months’ jail on Friday (22 November).
Ng Kheng Wah’s firm, T Specialist International was fined $880,000 for selling the items, including wines, spirits, jewellery, luxury watches, perfumes and cosmetics to the Hermit Kingdom.
To mask the products’ ultimate destination, Ng, a 56-year-old Singaporean, shipped the goods through China and failed to declare the final port of delivery to Singapore Customs.
Under the United Nations (Sanctions — Democratic People’s Republic of Korea) Regulations 2010, a person in Singapore or a citizen outside of Singapore is banned from supplying designated luxury items to the Democratic People’s Republic of Korea (DPRK).
But from November 2010 to January 2017, T Specialist supplied such goods under the direction of Ng. The firm’s shipping manager Sherly Muliawan, oversaw the administrative aspects of the business, including issuing invoices and ensuring that the firm received payment.
Li Ik, a North Korean national, owned a department chain in his country called Korean Bugsae Shop which received goods from T Specialist. His son, North Korean National Li Hyon, assisted with the business. Li Hyon, 31, had studied in Singapore prior to assisting his father.
The total value of luxury goods supplied to the North Korea amounted to US$49,781.30 (S$67,836.98) and S$6,018,546.89.
False invoices
Ng pleaded guilty to 10 charges under the United Nations Act for illegally supplying luxury goods to North Korea, and 10 charges of cheating. Another 140 charges of the same nature were considered for sentencing.
T Specialist also admitted to 12 out of 87 charges of breaching the United Nations Act.
The cheating charges involved a fraudulent scheme to cheat banks into issuing a company financing loans. Ng had devised the scheme as Li Ik owed T Specialist US$20 million in payment for goods towards the end of 2013, and he was facing cash flow problems.
The scheme involved submitting false invoices to obtain financing loans for non-existent goods sold by a foreign-incorporated company, Pinnacle Offshore Trading, to T Specialist, from January 2014 to August 2016.
Pinnacle Offshore was owned by Wang Zhiguo, Ng’s longtime friend and business associate. Wang would provide soft copy templates of Pinnacle Offshore’s commercial invoices with his signature to T Specialist. Muliawan would then fill in the templates and submit the invoices to five banks in Singapore in support of invoice financing loan applications.
In reality, there were no transactions of goods between Pinnacle Offshore and T Specialist. However, the fake invoices stated that the bulk of goods purportedly sold were Watari-brand instant noodles.
Ng also provided the banks with a contract between T Specialist and Pinnacle Offshore to make the non-existent transactions appear genuine. T Specialist also shipped a few hundred cartons of instant noodles abroad in 2014 as part of the ruse.
The five banks, DBS Bank, CIMB Bank Berhad, Malayan Banking Berhad, RHB Bank Berhad, and Overseas-Chinese Banking Corporation Limited, believing the 81 invoices to be genuine, paid out US$ 94,218,908 and S$1,711,800 in total to Pinnacle Offshore.
On Wang’s instructions, the money disbursed by the banks was eventually transferred to T Specialist.
To avoid detection, Wang also used Mars-Rock Offshore Trading, a company belonging to his wife, to further mask the round-tripping of money given to T Specialist.
For his role in the offences, Wang was jailed a year on Friday after pleading guilty to 10 out of 81 charges of cheating on Friday.
Ng has also repaid the amount loaned from the five banks.
The cases against Muliawan, Li Ik and Li Hyon are still pending before the courts.
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