Singapore Seen as Destination for ‘Scam Farm’ Proceeds

Singapore is facing renewed scrutiny over its defenses against dirty money after police seized hundreds of millions of dollars in assets linked to the Prince Group, a conglomerate labelled by U.S. and UK authorities as a “transnational criminal empire,” according to the Financial Times.

Singapore markets itself as a tightly run, corruption-free jurisdiction built on the rule of law, but recent cases have underlined the tension inherent in the fact that it’s a small, trade-driven economy built on the sort of cross-border capital flows that make it attractive to sophisticated money-laundering networks.

“The problem Singapore faces is that as a trading nation, it is built around inflows and outflows — its success makes it vulnerable to money laundering,” said Rory Doyle, head of financial crime policy at compliance firm Fenergo, in comments to the FT. “Criminals don’t want to lose their money and they see Singapore as the safe haven in southeast Asia.”

Chainalysis executive Chengyi Ong told the news outlet that Singapore’s geographic position and reputation make it a “jurisdiction of choice for regional criminals.”

Southeast Asia has in recent years emerged as a global center for large-scale online fraud, often run out of heavily guarded “scam compounds” that rely on trafficked labor, according to the report.

The Prince Group case broke open when the U.S. and UK imposed sanctions on 146 individuals and entities tied to the conglomerate, including alleged kingpin Chen Zhi, a 37-year-old Chinese-born Cambodian national, according to the FT. U.S. authorities seized $15-billion worth of bitcoin linked to the group and charged Chen with conspiring to commit wire fraud and money laundering.

Prosecutors allege that Chen and associates operated an international criminal enterprise that coerced victims into working in Cambodian scam farms, stole billions of dollars from targets worldwide, and then laundered the proceeds through companies across Asia and offshore centers. Chen’s whereabouts are currently unknown.

The Prince Group case comes just two years after Singapore was rocked by a separate scandal in which members of a Chinese gang used local banks and family offices to launder billions from illegal gambling sites operating in southeast Asia, prompting stricter compliance rules, the FT said.

In the Prince Group case, the weak point appears to be digital assets. Analysts told the FT that the network routed cryptocurrencies through unregulated or lightly supervised exchanges, exploiting gaps in oversight.