SINGAPORE: A construction worker who ran an illegal cross-border remittance service involving almost S$1.3 million (US$969,000) over a year was sentenced to jail on Tuesday (Jan 23).
Du Changshun, a 34-year-old Chinese national, was jailed for three months and fined S$6,160, which is the amount he earned from the illicit service.
If he cannot pay the fine, he will have to serve another four weeks’ jail in default.
The court heard that Du started helping his colleagues remit money from Singapore to China in November 2021.
His remittance service spread through word of mouth and Du began helping people who were not his colleagues, receiving requests from customers on messaging platform WeChat.
He offered two payment schemes. For amounts less than S$1,000, he charged a transfer fee of S$5.
For amounts between S$1,000 and S$10,000, he charged a transfer fee of S$10. This was the market rate at the time, the court heard.
If customers did not want to pay a transfer fee, Du offered an exchange rate that was 0.03 yuan less than the market exchange rate.
He accepted the money in cash, or via bank transfer.
The customers’ money would then be transferred through a WeChat ID linked to their Chinese bank accounts.
Between November 2021 and December 2022, Du received a sum of nearly S$1.3 million from customers to be transmitted to China.
He earned a total of S$6,160 through the fees he charged.
Du did not have a valid licence from the Monetary Authority of Singapore to provide cross-border money transfer services at the time. He was also not an exempt payment service provider for cross-border money transfer services.
The illegal service was uncovered when Du was investigated in May 2023 for a different offence. He admitted to providing a remittance service.
The prosecutor sought three to four months’ jail and a fine of S$6,000.
Deputy Public Prosecutor Melissa Heng said unlicensed providers of payment services that operate in the “shadow financial system” are unregulated and increase the risks of money laundering and terrorism financing.
The payment services may also be used to facilitate money mule offences, she said, adding that Du earned “a tidy sum” for his services.
Du pleaded guilty to one count of running an unlicensed remittance business.
He could have been jailed for up to three years, fined up to S$125,000, or both.
He can be fined up to S$12,500 per day if he continues to offend after being convicted.