Sentenced to 18 Months' Imprisonment for Corruption, GST Tourist Refund Fraud and Money Laundering
On 18 June 2020, Muthuvel Sankar (“Sankar”), a 41-year-old Indian National was sentenced to 18 months’ imprisonment and a penalty of S$66,891 for fraudulently claiming Goods and Services Tax (GST) tourist refund, corruption and money laundering. Sankar had been charged in Court on 4 June 2020 with 5 counts of corruption involving about S$2,800, 6 counts of GST tax evasion amounting to S$29,800, and one amalgamated charge of removing the criminal benefits from Singapore amounting to S$27,895.
2. Through the tenacity of its officers, the Corrupt Practices Investigation Bureau (CPIB) was able to elicit critical information and identify Sankar as a subject of interest through extensive interviews done with other subjects investigated in an earlier case in 2014. Sankar was not in Singapore then, but was swiftly apprehended by CPIB when he attempted to re-enter Singapore in October 2019. Subsequent investigations by the CPIB, the Inland Revenue Authority of Singapore (IRAS) and the Commercial Affairs Department (CAD) of the Singapore Police Force uncovered the various offences committed by Sankar, and he was decisively brought to justice.
3. Investigations carried out by IRAS revealed that Sankar had made at least 6 fraudulent tourist refund claims under Electronic Tourist Refund Scheme (eTRS). Sankar was not entitled to the tourist refunds as the jewellery purchases were not made by him, but by other persons during the time when Sankar was not in Singapore. However, Sankar proceeded to make tourist refund claims for himself by using the eTRS tickets which he obtained, and by making false statements in his claim that he was eligible for such refunds. As a result, Sankar fraudulently obtained tourist refunds of at least S$29,800. These are offences under Section 62(1)(b) of the Goods and Services Tax Act (Chapter 117A, 2005 Rev Ed).
4. Investigations by CPIB revealed that Sankar had presented the eTRS tickets to Mohamed Yusof Bin Abdul Rahman1 (“Yusof”), a customs officer with Singapore Customs at the material time of the offences. Yusof’s duty was to approve GST tourist refund applications (upon the necessary verifications) and issue eTRS notification slips to the tourists for the purpose of making GST tourist refund claims at the airport. Yusof would endorse these tickets without proper verification of the goods. Sankar corruptly gave or conspired to give approximately S$2,800 on five separate occasions between 2013 and 2014 to Yusof as reward for endorsing the eTRS tickets so as to facilitate the fraudulent GST tourist refund claims. On two of these occasions, the act was made through a third-party on behalf of an acquaintance. These constituted offences under Section 6(b) as well as Section 6(b) read with Section 29(a) of the Prevention of Corruption Act (Chapter 241, 1993 Rev Ed).
5. Investigations conducted by the CAD also revealed that Sankar removed a total of at least S$27,895 out of Singapore (during the same period) when he departed Singapore for India shortly after applying for and receiving the GST refunds. Accordingly, Sankar was charged with one amalgamated charge for an offence under Section 47(1)(b) of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (Chapter 65A, 2000 Rev Ed) for removing cash arising from fraudulent GST tourist refund claims out of jurisdiction.
6. Singapore adopts a zero tolerance approach towards corruption, tax fraud and other criminal activities. The authorities will not hesitate to take action against any individuals and parties who commit these offences. They can expect to face the full brunt of the law.
[1] Yusof is no longer employed by Singapore Customs.
Eligibility for a Refund under the Tourist Refund Scheme (TRS)</br> The TRS is available only to bona fide tourists for the claiming of GST refunds on goods they have purchased and brought out of Singapore. Permanent Residents, or foreigners who have been employed in Singapore in the past six months before the date of purchase, are not eligible for GST refunds under the TRS. For the full list of TRS qualifying criteria and conditions, please refer to the IRAS website.
Anyone who commits the offence of wilful intent to make a false GST refund claim or, assist any other person to make false claim faces a penalty of up to 3 times the amount of refund wrongfully claimed and a fine not exceeding $10,000, and/or imprisonment of up to 7 years.