Samlit Moneychanger in Singapore sued after China police freeze cash (UAT 3)

Three Chinese nationals working in Singapore sued a remittance firm after police in China froze money they had transferred home, as Beijing ramps up efforts to root out alleged money laundering and other illicit activities.

The three are seeking 347,501 yuan (S$65,600) from Samlit Moneychanger, as part of other claims, alleging breach of agreements, according to a suit filed to the Singapore courts in October and obtained by Bloomberg News. Samlit denied the allegations. It said it fulfilled its obligations and cannot be responsible for what happens after money reaches designated accounts in China, according to court documents.

The seizures come as China cracks down on what it considers massive crime rings that have extended beyond its shores as more of its citizens leave home. Across Asia, nations from Singapore to Myanmar are grappling with scams and money-laundering cases that have spilled out from the world’s second-largest economy. Singapore in particular is seeing its biggest money laundering case play out, with more than $3 billion of assets confiscated from ethnic Chinese in the city-state so far.

Police in China has blocked hundreds of remittances from Singapore, many of them sent by Samlit, a licensed money changer based in Chinatown, according to complaints made to authorities in Singapore.

In the lawsuit, Mr Tan Mingshi said Chinese police allegedly froze 250,000 yuan that was transferred into his wife’s bank account in 2022 because of “suspicion of money laundering”. It was only after he followed police instructions to return to China and transfer 142,226 yuan to “scam victims” were the remaining funds released, according to court documents.

Ms Peng Fang Fang, another claimant, said she gave $40,000 to Samlit to send the equivalent of about 195,600 yuan to her account in China, only to have most of it frozen by police. Mr Qi Chao, the third claimant, said most of the $10,576 moved to his Chinese bank account was frozen as the police investigated his “illegal activities” related to the transfer, according to the court filing.

Like Mr Tan, Ms Peng said she returned to China to answer questions from police. Mr Qi also said he had to comply with instructions from police. Their frozen funds were transferred out of their bank accounts, with Ms Peng notified that this was done by the Chinese police bureau, the lawsuit states. All three said they followed police orders “for fear of criminal consequences”, the suit alleges.

None of the claimants has been accused of any wrongdoing related to the fund transfers, according to their lawyer Pang Khin Wee of Hoh Law. Mr Pang said they are all blue-collar workers who have resided in the city-state for years.

In its defence filed to the court, Samlit said none of the claimants provided “satisfactory” evidence backing their frozen money claims. Samlit and its lawyer did not reply to e-mailed requests seeking further comment.

As of Dec 15, there have been more than 670 complaints to Singapore police about frozen remittances to China worth a combined $13 million, according to authorities. Almost two-thirds of the reports were linked to Samlit, they added.

In response to the slew of seizures, the Monetary Authority of Singapore ordered remittance firms to use only banks or operators of a card network such as Union Pay International when transmitting funds to China. The remittance firms had often used overseas agents to save costs, rather than making direct bank transfers, MAS said in a statement in December. The restrictions are in place for three months starting Jan 1, with a possible extension.

The directive was not related to any specific money laundering concern, the MAS said on its website in December.

MAS and the Singapore police said at the time they have not received any information indicating that remittance companies have been involved in money laundering or scams, or that the funds were frozen because these firms had transferred proceeds from any criminal activity.

Singapore is seeking clarity from China’s government on how remitters can unlock their money, Minister of State for Trade and Industry Alvin Tan said earlier in January. China is the world’s third-largest remittance recipient, netting US$50 billion (S$67 billion) in 2023, according to a December report by the World Bank.

Used with permission of Bloomberg L.P. Copyright © 2024. All rights reserved.

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