By SAURABH CHATURVEDI and JAKE MAXWELL WATTS
Wall Street Journal
Oct. 10, 2016
Charges include forgery and failing to report a suspicious transaction
SINGAPORE—Prosecutors charged two former private bankers Monday with forgery and other criminal charges in the latest legal salvo related to the alleged misappropriation of billions of dollars from Malaysian state development fund 1MDB.
Yak Yew Chee, 57 years old, and Yvonne Seah, 45, were charged in Singapore’s state courts with three counts each of forgery and four counts each of failing to report suspicious transactions between 2012 and 2014, during their employment by the Singapore branch of Swiss private bank BSI SA.
Mr. Yak was the relationship manager for accounts held at BSI by subsidiaries of 1MDB, according to investigators and people familiar with the bank’s operations. Ms. Seah, whose full Chinese name is Seah Yew Foong, was a senior private banker at the firm.
No pleas were entered. Both defendants were released on bail after the hearing and couldn’t immediately be reached for comment.
Lawyers for the two declined to comment on the charges outside the courthouse, saying they needed to review them first.
The forgery charge, upon conviction, carries a maximum jail term of up to four years. Failing to report a suspicious transaction is punishable upon conviction by a fine of not more than 20,000 Singapore dollars (about $14,500).
Authorities in Singapore, Switzerland and at least four other countries are investigating 1Malaysia Development Bhd., or 1MDB, which was founded in 2009 by Prime Minister Najib Razak.
Swiss investigators say they believe as much as $6 billion has gone missing from 1MDB. The Wall Street Journal has reported that investigators believe a large chunk of it passed through BSI in Singapore, starting around 2011.
The Journal also has reported global investigators believe that more than $1 billion originating from 1MDB landed Mr. Najib’s private bank accounts.
The prime minister has denied wrongdoing or taking money for personal gain. Mr. Najib and Malaysia’s attorney general have said the money in his bank accounts was a gift from the Saudi royal family. The attorney general cleared Mr. Najib of wrongdoing and said most of the money was returned. Saudi Arabia’s foreign ministry acknowledged a donation to Malaysia but declined to comment further. The fund has also denied any wrongdoing and said it would cooperate with any lawful investigation.
BSI acknowledged internal shortcomings in June and said it has taken appropriate action. It also said it had appealed actions taken against it by Switzerland’s financial market regulator.
Earlier this year authorities in Switzerland and Singapore said their investigations had found BSI had failed to prevent suspected money laundering and bribery related to its dealings with 1MDB. Switzerland has opened a criminal investigation into the bank and Singapore in May ordered BSI’s local arm to shut down, fining it S$9.7 million after finding it had breached money-laundering regulations.
Singapore is at the center of legal proceedings against individuals allegedly connected to 1MDB funds.
Yeo Jiawei, a former wealth manager at BSI in Singapore, faces 11 charges ranging from cheating to attempting to pervert the course of justice. His lawyer says Mr. Yeo is contesting the charges.
Another individual was charged in April with bribing a research analyst to prepare a favorable valuation report for an asset. The person couldn’t be reached and a lawyer couldn’t be identified.
Prosecutors in Singapore have said the investigation into alleged money-laundering is the largest and most complex of its kind they have ever undertaken.
Mr. Yak’s formal role at BSI was to find new clients for the bank and act as liaison between them and the bank’s wealth management staff, which implemented instructions on a client’s behalf.
He earned as much as S$27 million in salary and bonuses between 2011 and 2014 in that role, according to court documents relating to a request by Mr. Yak for Singapore police to unfreeze some of his assets.
Mr. Yak became something of a celebrity at BSI for his ability to bring in large amounts of new money for it to manage, according to several former employees of the bank. He was known for his discretion, they said.
By far the largest customer of BSI Singapore—and Mr. Yak—was 1MDB, according to several people familiar with the bank’s operations.
In July, the U.S. Justice Department filed civil lawsuits to seize assets, including property in Los Angeles and New York, that it said was purchased with some of the allegedly misappropriated 1MDB funds.
