SINGAPORE - Two men appeared in a district court on Wednesday over their alleged links to a fraud case relating to goods and services tax (GST) involving around $55 million in fictitious sales.
Kelvin Yeo Soon Teck, 41, and Francis Tan Nuan Seng, 46, were each charged with multiple offences including forgery.
A third man, Sia Hock Chuan, 56, who is the chief executive of a company called M_Solution Trading, is allegedly linked to the case. He was charged in court in August.
Sia’s case is pending. He is accused of failing to exercise reasonable diligence in the discharge of his duties as a director at the firm.
In a joint statement on Wednesday, the police and the Inland Revenue Authority of Singapore (Iras) referred to the case as one involving “GST missing trader fraud”.
The two agencies said that in a typical arrangement under the ruse, a group of businesses would form a supply chain through which goods are sold.
At each stop along the supply chain, the seller charges GST on the goods sold.
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The two agencies added: “The original upstream seller then disappears without paying the collected GST to Iras, hence the term ‘missing trader’.”
Meanwhile, the goods sold down the chain are purportedly exported by the last seller in the chain.
Since exports are zero-rated, this last seller does not collect GST on the exports. Instead, it claims a refund from Iras on the GST paid on its purchases of the goods.
The State will suffer a loss if Iras refunds this last seller, as the “missing trader” had not paid the GST it had collected for its sale of the goods at the start of the chain.
The two agencies said that in some variations of the ruse, the goods can even be fictitious. There were also instances where the same goods were re-imported and re-exported multiple times.
For the current case, the police and Iras said M_Solution Trading was purportedly a shell company with no real business operations.
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They also said the firm was allegedly used to generate purchase orders and sales invoices to support GST refund claims by exporters.
Between September and December 2015, it allegedly sold high-value electronic goods and software amounting to around $55 million to various businesses, including one called Crescendo Hardware Trading.
The police and Iras added that GST was charged on these sales even though M_Solution Trading was GST-registered only from Dec 1, 2015.
According to the agencies’ statement, Tan and Yeo allegedly ran M_Solution Trading’s fraudulent operations, and conspired to forge the company’s sales invoices as well as delivery orders.
Separately, Tan is also accused of transferring around $5 million from the firm’s bank account to another account in Hong Kong in December 2015.
He allegedly did so despite knowing that the monies were purportedly proceeds from criminal conduct.
Meanwhile, Yeo was allegedly in charge of Crescendo Hardware Trading’s fraudulent operations between October 2015 and April 2016.
He is accused of forging its sales invoices to facilitate the alleged fraud.
The case involving Tan and Yeo has been adjourned to Sept 25.
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2 men charged over alleged GST-related fraud linked to around $55m in fictitious sales
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