How suspects spent billion in Singapore's biggest money laundering case

By Chanyaporn Chanjaroen and Dexter Low

Wang Dehai was already on the run when he made Singapore his home five years ago. Police in China were offering a bounty for information about him for his alleged role in an illegal gambling ring.

Once in Singapore, Wang and his wife set up a family office and he got an employment pass, giving him the right to stay in the city-state. They banked with Credit Suisse, and the couple got passports from the tax haven of Cyprus. Wang, 34, splurged on a S$23 million ($17.2 million) condominium in the prime Orchard area and held about $2.8 million in cryptocurrency.

Wang’s idyllic world came crashing down in August when he was among 10 people of Chinese origin arrested and charged in the biggest money-laundering case the nation has ever seen. Authorities have seized more than S$2.8 billion in assets including gold bars, jewelry, 62 cars and 152 properties. The tally may rise, with many suspects still on the loose.

The seizures have sent shockwaves through the orderly nation, prompting a review of the policies that were exploited to allow so much money to allegedly be laundered for so long at some of the world’s biggest banks. The police raids across the toniest neighborhoods also highlight how Singapore is paying the price for its open borders just as some wealthy Chinese with suspected tainted funds are looking for places to park their money.

“There was enough risks or obvious questions to require much more rigorous and significant due diligence to be done on the provenance of these people and their money,” said Christopher Leahy, the Singapore-based managing director of Blackpeak (Holdings) Ltd., a research and risk advisory firm.

For decades, Singapore has taken steps to attract the uber rich, spawning a finance industry that’s made it one of the wealthiest countries on earth. Generous tax incentives and programs that offer pathways to long-term residency have paid off handsomely, prompting billionaires from James Dyson to Ray Dalio to set up family offices. Assets overseen by the money management sector have almost doubled in seven years to $3.65 trillion, with about three-quarters of that from abroad.