HSBC and Morgan Stanley among major banks tied to Singapore’s recent S$1.8 billion money-laundering probe

Major banks, including HSBC and Morgan Stanley, have emerged as potential creditors of companies connected to individuals under investigation in a recent money-laundering crackdown.

More connections are surfacing as the authorities expand investigations into the associates of the 10 charged in an anti-money-laundering crackdown that has grown in value to S$1.8 billion.

Business filings of Singapore-incorporated companies linked to 24 persons, identified by the authorities as associates of the charged, show at least six banks as creditors to eight entities.

The banks are Credit Suisse, HSBC, Morgan Stanley, DBS, UOB, and OCBC’s Bank of Singapore (BOS).

The 24 associates were previously identified by the Ministry of Law.

Singapore’s Monetary Authority (MAS) has issued a directive to financial institutions in the city-state, instructing them to review their relationships with individuals connected to a money laundering scandal involving over S$ 1.8 billion in assets. The directive, dated 30 August, was sent to the compliance heads of all financial firms in Singapore.

The MAS has called for a thorough examination of suspicious or unusual transactions involving these individuals, beginning from the start of 2020.

Among the 34 individuals that financial institutions are required to scrutinise, ten were arrested last month as part of a 15 August islandwide anti-money laundering probe mounted by the police, an operation described as unprecedented in size and scope.

A billion dollars worth of assets were seized – including luxury cars, houses and cash.

The ten have since been charged with various offences, with nine of them receiving fresh charges.

The MAS note states that these individuals “could be involved in illicit activities,” emphasising the need for a comprehensive review of their transactions.

In response to queries from Bloomberg News, an MAS spokesperson stated, “As a matter of policy, MAS does not comment on our dealings with financial institutions.”

This move by the regulator highlights the ongoing efforts to address the vulnerabilities exposed by the crackdown, which resulted in the seizure of assets, including gold, luxury cars, cash, and cryptocurrency.

Several banks, including DBS, Citigroup’s local unit, and Credit Suisse, have become embroiled in the scandal as the investigation continues.

Financial firms have been instructed by the MAS to take appropriate actions, including filing suspicious transaction reports as necessary, as they review the transactions.

Some of the ten suspects involved in the scandal had established ties to Singapore before 2020, according to local business filings.

The investigation has revealed that these individuals were connected to various businesses and had significant sums of money seized from their bank accounts.

The suspects are currently in remand and have not entered pleas.

MAS had previously highlighted the role of suspicious transaction reports filed by financial institutions in alerting authorities to illicit activities, citing red flags such as suspicious fund flows and questionable source-of-wealth filings.