SINGAPORE: A 32-year-old man was sentenced to 28 months’ jail and fined S$4,194,000 (US$3,281,000) for evading S$1,147,298 in taxes, and laundering proceeds of crime, the Singapore Police Force (SPF) and Singapore Customs said in a joint news release on Tuesday (Jul 8).

Eric Tan Zhi Hao pleaded guilty to nine counts of fraudulently evading excise duties and Goods and Services Tax (GST) over the under-reporting of the value of imported motor vehicles into Singapore, the release said.

He also facilitated the concealment of funds obtained from the criminal conduct and attempted to obstruct the course of justice during investigations.

Tan had conspired with three other co-accused persons to under-declare the value of cars imported by parallel importer Lightspeed Performance, to Singapore Customs.

Tan used his firm Eagle 9 Automotive as an intermediary to receive funds from car retailers that purchased vehicles imported by a firm called Lightspeed into Singapore, with Lightspeed billing Eagle 9 a partial amount of the actual value of the vehicles.

To make up for the shortfall that was not declared to Singapore Customs, Eagle 9 would make separate transfers labelled as “warranty payments” to two overseas companies, K3 Strategic and K3 Strategic Limited.

As a result of the under-declaration scheme, which took place between 2022 and 2023, Lightspeed evaded GST and excise duty totalling about S$3.53 million over the importing of 485 motor vehicles, authorities said.

Of the 485 vehicles, Eagle 9 was used in the under-declaration of 190 cars, resulting in excise duty and GST of S$723,141.32 and S$424,156.19 being evaded.

Investigations showed that Tan was aware that the “warranty payments” were false, and that they were created for Lightspeed to under-declare the true value of the imported vehicles to Singapore Customs.

In total, Tan received at least S$188,416 for his participation in the under-declaration scheme.

Besides tax evasion, Tan was also found to have been involved in the laundering of another’s criminal proceeds and the obstruction of justice.

After one of the co-accused was arrested by Singapore Customs around June 2023, Tan and the other two co-accused agreed to delete WhatsApp messages in their group chats about their scheme to avoid incrimination. He also disposed of his phone containing the messages.

Court proceedings against the three other co-accused persons are ongoing.

If Tan does not pay his S$4,194,000 fine, he will have to serve an additional 44 months of jail.

“Singapore takes a serious view on fraudulent evasion of duties and GST 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,” said SPF and Singapore Customs in the release.

Financial institutions and other relevant business entities such as traders or agents are required by law to report suspicious transactions, and failure to file a report may constitute a criminal offence, they said.