SINGAPORE: A company director who cheated the Ministry of National Development (MND) was jailed for nine months and four weeks on Friday (Jan 23).
Choo Chiang Wei, 50, pleaded guilty to one charge of criminal conspiracy to cheat with co-accused Tan Kia Lim, 68, and 10 charges of abetting forgery.
His remaining charges were taken into consideration for sentencing. He faced 68 charges in total, almost all for forgery.
Tan's case is still pending before the courts.
MND reported the offences in May 2019, after the Auditor-General's Office found irregularities during an audit of the ministry's procurement and contractor management of works for its building facilities.
Choo was the sole director of Tree Trading & Engineering, which specialised in mechanical engineering and electrical works.
Tree Trading was a subcontractor for another firm, Kim Yew Electrical & Sanitary.
Kim Yew had a term contract to provide facilities maintenance to MND from January 2013 to March 2022.
This term contract specified fixed prices for some types of electrical and maintenance works.
If there were works that did not have fixed prices, and if Kim Yew was unable to perform such works on its own, there was a separate procedure for agreeing on the price.
Under the procedure for these so-called "star rate items", Kim Yew was supposed to get three quotations from three subcontractors. It had to prepare its quotation based on the lowest of the three quotations, with a 5 per cent mark-up. All four quotations should have been submitted to MND's management agent for evaluation.
The purpose of this was to establish the market rate for the works, so that MND would not be paying more than that.
MND would make a decision based on the management agent's recommended subcontractor that had provided the lowest quotation. The management agent would then inform Kim Yew to engage the selected subcontractor.
Kim Yew was also responsible for submitting to the management agent a summary of the amounts to be paid, with supporting documents, at the end of each month.
The court heard that sometime before 2015, Choo and Tan, who was a director of Kim Yew, agreed on a discount scheme.
Tree Trading would give Kim Yew a 15 per cent discount for star rate items under Kim Yew's term contracts with government agencies, including MND.
In exchange, Tree Trading would be the default subcontractor for star rate items that Kim Yew could not perform alone. It would also be paid ahead of the usual schedule.
This arrangement meant that Tree Trading was willing and able to perform the works at the discounted price.
As the discount was not passed on to MND, it became an inflated price borne by the ministry.
Choo and Tan concealed their arrangement from MND by submitting quotations from Tree Trading that did not reflect the discount.
Between 2015 and 2018, MND was deceived into paying Kim Yew S$287,386 for star rate items in 34 transactions.
Based on the three-quotation rule, Kim Yew was only allowed a maximum 5 per cent profit from the lowest quotation.
However, with the 15 per cent discount, Kim Yew only paid Tree Trading S$232,645.81. This meant Kim Yew dishonestly gained S$43,107.90.
To make sure that Tree Trading's quotation would always appear as the lowest of the three, Choo also taught and instructed an employee to forge quotations purporting to be from other subcontractors.
He used letterheads of other firms that he had from past business dealings.
The prosecutors said that Choo did not financially profit from the scheme and was "unusually cooperative" with authorities during investigations and court proceedings.
Choo's defence lawyer said the offences were committed due to his inexperience in the construction industry, and his perception that the arrangement with Kim Yew was a commission or referral fee common in the industry.
The lawyer added that Choo has pivoted Tree Trading's business to focus on bicycle repairs and selling bicycle accessories, to distance himself from the construction industry.
The offence of cheating carries a jail term of up to 10 years and a fine.
Forgery is punished with up to four years in jail, a fine or both.
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Choo Chiang Wei, 50, pleaded guilty to one charge of criminal conspiracy to cheat with co-accused Tan Kia Lim, 68, and 10 charges of abetting forgery.
His remaining charges were taken into consideration for sentencing. He faced 68 charges in total, almost all for forgery.
Tan's case is still pending before the courts.
MND reported the offences in May 2019, after the Auditor-General's Office found irregularities during an audit of the ministry's procurement and contractor management of works for its building facilities.
Choo was the sole director of Tree Trading & Engineering, which specialised in mechanical engineering and electrical works.
Tree Trading was a subcontractor for another firm, Kim Yew Electrical & Sanitary.
Kim Yew had a term contract to provide facilities maintenance to MND from January 2013 to March 2022.
This term contract specified fixed prices for some types of electrical and maintenance works.
If there were works that did not have fixed prices, and if Kim Yew was unable to perform such works on its own, there was a separate procedure for agreeing on the price.
Under the procedure for these so-called "star rate items", Kim Yew was supposed to get three quotations from three subcontractors. It had to prepare its quotation based on the lowest of the three quotations, with a 5 per cent mark-up. All four quotations should have been submitted to MND's management agent for evaluation.
The purpose of this was to establish the market rate for the works, so that MND would not be paying more than that.
MND would make a decision based on the management agent's recommended subcontractor that had provided the lowest quotation. The management agent would then inform Kim Yew to engage the selected subcontractor.
Kim Yew was also responsible for submitting to the management agent a summary of the amounts to be paid, with supporting documents, at the end of each month.
The court heard that sometime before 2015, Choo and Tan, who was a director of Kim Yew, agreed on a discount scheme.
Tree Trading would give Kim Yew a 15 per cent discount for star rate items under Kim Yew's term contracts with government agencies, including MND.
In exchange, Tree Trading would be the default subcontractor for star rate items that Kim Yew could not perform alone. It would also be paid ahead of the usual schedule.
This arrangement meant that Tree Trading was willing and able to perform the works at the discounted price.
As the discount was not passed on to MND, it became an inflated price borne by the ministry.
Choo and Tan concealed their arrangement from MND by submitting quotations from Tree Trading that did not reflect the discount.
Between 2015 and 2018, MND was deceived into paying Kim Yew S$287,386 for star rate items in 34 transactions.
Based on the three-quotation rule, Kim Yew was only allowed a maximum 5 per cent profit from the lowest quotation.
However, with the 15 per cent discount, Kim Yew only paid Tree Trading S$232,645.81. This meant Kim Yew dishonestly gained S$43,107.90.
To make sure that Tree Trading's quotation would always appear as the lowest of the three, Choo also taught and instructed an employee to forge quotations purporting to be from other subcontractors.
He used letterheads of other firms that he had from past business dealings.
The prosecutors said that Choo did not financially profit from the scheme and was "unusually cooperative" with authorities during investigations and court proceedings.
Choo's defence lawyer said the offences were committed due to his inexperience in the construction industry, and his perception that the arrangement with Kim Yew was a commission or referral fee common in the industry.
The lawyer added that Choo has pivoted Tree Trading's business to focus on bicycle repairs and selling bicycle accessories, to distance himself from the construction industry.
The offence of cheating carries a jail term of up to 10 years and a fine.
Forgery is punished with up to four years in jail, a fine or both.
Continue reading...