Former Director Sentenced to 102 Months’ Jail and Ordered to Pay Close to $9.3 million in Fines and Penalties for Tax Evasion, Money Laundering Offences
Thomas Lee Zhixiong (“Lee”), 41, former director of six companies, has been convicted and sentenced by the Court to a jail term of 102 months and ordered to pay $9,271,912 in fines and penalties for evading Goods and Services Tax (“GST”), fraudulently claiming a Productivity and Innovation Credit (“PIC”) cash payout, money laundering and other offences.
The Court imposed the following sentences on Lee for the offences committed between 2014 and 2017:
- For 31 counts of making false entries in the GST returns of three companies - Everasia T&W, Hup Heng and Sante - resulting in $2.97 million of taxes undercharged, Lee was sentenced to between 16 and 20 months' imprisonment for each offence and a total penalty of $8.91 million which is three times the amount of tax undercharged in these 31 charges;
- For one count of abetting Nourriture in making incorrect GST returns without reasonable excuse resulting in $58,456 of taxes undercharged, Lee was ordered to pay a fine of $5,000 and a penalty of $116,912 which is twice the amount of tax undercharged;
- For one count of submitting a false PIC claim to obtain a payout of $60,000, Lee was sentenced to 8 weeks’ imprisonment
- For four counts of money laundering activities involving using illegally obtained GST refunds and PIC cash payouts for various business purposes, including legal expenses and supplier payments totalling $1,652,030, Lee was sentenced to between 10 months’ imprisonment and 27 months’ imprisonment for each offence;
- For three counts of money laundering activities involving transferring illegally obtained GST refunds to multiple persons and entities for various business purposes, including employees’ salary and rental payments totalling $2,091,482, Lee was sentenced to between 9 months’ imprisonment and 43 months’ imprisonment for each offence; and
- For one count of directly taking part in the management of Hup Heng, whilst an undischarged bankrupt and without the leave of the Court or the written permission of the Official Assignee, Lee was sentenced to 3 months’ imprisonment.
Lee, who was adjudged a bankrupt in April 2016 and could no longer be registered as director of his companies without the leave of the Court or the written permission of the Official Assignee, had requested 42-year-old Andy Siew Hui Hock (“Siew”) to be a director of the companies in name. After being appointed as director, Siew was entirely uninvolved in the business and operations of the companies and did not take any steps to find out about their ongoing business activities.
Siew was convicted on 27 January 2022 of two counts of an offence punishable under Section 157(3)(b) of the Companies Act for failing to exercise reasonable diligence in the discharge of his duties as a director of Hup Heng and Sante. Another three counts of the same offence were taken into consideration for the purpose of sentencing. Siew was sentenced to a fine of $5,000 (in default 10 days’ imprisonment) for each offence and disqualified from acting as a director or taking part, whether directly or indirectly, in the management of a company for a period of three years.
Penalties for Non-Compliance
Fraudulent GST Claims
It is a serious offence to wilfully evade tax by submitting false GST returns such as by understating any output tax, overstating any input tax, excluding taxable supplies or including fictitious transactions. Upon conviction, offenders are liable to pay a penalty of three times the amount of tax undercharged and are liable to be punished with a fine not exceeding $10,000, and/or to imprisonment of up to seven years.
With the enhanced sentencing framework for GST evasion, offenders will face a stiffer imprisonment sentence which takes into account the harm caused by the offender and his or her culpability, such as the quantum of tax evaded, the degree of planning and premeditation and sustained period of offending. The imprisonment term imposed for GST evasion under Section 62 of the GST Act may span the full range of up to seven years.
It is an offence under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act for any person to acquire, possess, use, conceal or transfer benefits derived from criminal conduct. Upon conviction, offenders are liable to be punished with a fine not exceeding $500,000, or an imprisonment term not exceeding 10 years, or both.
Singapore takes a serious view on fraudulent GST refund claims and related money laundering activities and will not hesitate to take stern enforcement actions against any individuals who commit these offences and persons who facilitate them.
Managing a Company whilst an Undischarged Bankrupt
It is an offence under Section 148(1) of the Companies Act for any person, being an undischarged bankrupt (whether he was adjudged bankrupt by a Singapore Court or a foreign court having jurisdiction in bankruptcy), to directly or indirectly take part in or be concerned in the management of a company without the leave of the Court or the written permission of the Official Assignee. Upon conviction, offenders are liable to be punished with a fine not exceeding $10,000, or an imprisonment term not exceeding two years, or both.
Failing to Exercise Reasonable Diligence in the Discharge of their Duties as a Director
Any person who commits a breach of Section 157(1) of the Companies Act shall be guilty of an offence punishable under Section 157(3)(b) of the same Act and shall be liable on conviction to a fine not exceeding SGD 5,000 or to imprisonment for a term not exceeding 12 months.
The Police takes a serious view of the offence and will not relent in taking offenders to task. Individuals should not be a director of a company when they have limited or no oversight or control, as the company may be used for illegal purposes such as the laundering of criminal proceeds. Company directors who fail to exercise reasonable diligence in the discharge of their duties run the risk of allowing their companies to facilitate the retention of benefits derived from criminal conduct.
Reporting of Malpractices
Businesses or individuals are encouraged to immediately disclose any past tax mistakes. IRAS will treat such disclosures as mitigating factors when considering action to be taken. Those who wish to disclose past mistakes or report malpractices can write to:
Inland Revenue Authority of Singapore
Investigation & Forensics Division
55 Newton Road, Revenue House
Email: [email protected]
Cash Rewards for Informants
A reward based on 15% of the tax recovered, capped at $100,000, would be given to informants if the information and/or documents provided lead to a recovery of tax that would have otherwise been lost. All payments are at the discretion of the Comptroller. IRAS will ensure that the identities of informants are kept strictly confidential.
Inland Revenue Authority of Singapore
Singapore Police Force
 The companies are Everasia Transportation and Warehousing Pte Ltd (“Everasia T&W”), Everasia Logistics Pte Ltd (“Everasia”), Hup Heng Construction & Trading Pte Ltd (“Hup Heng”), Sante De Beaute Pte Ltd (“Sante”), S.D.B (Group) Pte Ltd (“S.D.B”) and Nourriture Pte Ltd (“Nourriture”).