Seized Assets in Money Laundering Investigations: What Happens To Them?
You may have heard that in one of Singapore’s largest anti-money laundering operations which saw the arrest of 10 foreign nationals, assets seized by the authorities have since swelled to over S$2.4 billion. These assets include bank accounts, properties, luxury items and electronic devices, among others.
This article will explore what happens to seized assets during money laundering investigations, along with the relevant laws and regulations in Singapore that would apply to such assets. It will cover:
What is Money Laundering?
According to the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA), money laundering is defined as concealing or disguising the benefits derived from criminal conduct.
Put simply, money laundering can be thought of as making “dirty” money appear “clean”. Money laundering can come in many different forms ranging from simple to complex, but one of the most common methods is to use a legitimate business as a “front”. For instance, the criminal organisation may own a legitimate business such as a restaurant. The organisation can then inject illegal cash earned from criminal activity (such as human trafficking) into the restaurant’s bank account, which would “clean” the money and make it seem like it came from a legitimate source (being part of the restaurant’s business profits).
In money laundering cases, large amounts of assets are usually involved. Assets could come in the form of cash gained from the proceeds of illegal activity, or items purchased with such proceeds — these assets are then seized by the authorities in money laundering investigations.
What Does It Mean for Assets to be Seized?
When assets are seized, this means that they are kept in police custody while investigations are ongoing and will be used as evidence in criminal proceedings.
Assets might be seized at any point during the investigations whenever a link to suspected criminal activity has been established. Hence, it is not necessary to wait until the alleged suspects are convicted in court before their assets can be seized.
What are the Types of Assets That Can be Seized?
There is a wide range of assets that can be seized. In the 2023 money laundering case that took Singapore by storm, the assets seized included bank accounts, cash (including foreign currencies) and properties, along with other physical assets such as vehicles, gold bars, luxury bags and watches, jewellery, electronic devices like computers and mobile phones, and even bottles of liquor and wine. Notably, a number of Bearbrick figurines were part of the physical assets seized in the operation, labelled as “ornaments” by the police.
Intangible assets such as cryptocurrencies can also be seized. This is done by freezing them (explained below).
If the assets are linked to the criminal activity in question but are located overseas, the Attorney-General may make a request under Part 2 of the Mutual Assistance in Criminal Matters Act for foreign authorities to assist in the seizure of assets. More specifically, the Attorney-General may request the assistance of foreign authorities to obtain assets overseas and have them sent over to Singapore if he is satisfied that the assets are relevant to a criminal matter in Singapore.
What Laws Govern the Seizure of Assets?
In Singapore, the seizure of assets is primarily governed by the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA), which empowers the authorities to immediately seize or freeze assets during investigations, or block further transactions. Here are some examples of what it means to seize assets, freeze assets and block transactions:
- Seizure of assets: During money laundering investigations, authorities may seize a range of assets (as described above) to assist in investigations — this means taking physical possession and control of such assets.
- Freezing: Freezing assets prevents the holder of the assets from accessing, using or disposing of them, thereby preserving the value of the assets during money laundering investigations. Hence, bank accounts suspected to be involved in money laundering are likely to be frozen during criminal proceedings.
- Blocking transactions: If a certain transaction is suspected to be related to criminal activity like money laundering, it may be blocked by financial institutions such as banks to prevent that specific transaction from taking place.
Assets can also be seized from third parties or close relatives, if such assets are found to be linked to the suspect in question. In addition, the Criminal Procedure Code (CPC) makes provisions for the powers of the police with regard to the seizure of assets (see below).
For a general overview of money laundering laws in Singapore, do refer to our article on anti-money laundering laws.
What Happens to Assets That are Seized?
Who takes control of the assets?
Under the CPC, the police are empowered to take custody of physical assets and items such as electronic devices (e.g. mobile phones, laptops), cash or any other personal belongings of suspects such as vehicles and luxury items.
In the case of money in bank accounts or shares, the police will usually issue an order that prevents the financial institution or account holder from dealing with the money or shares. This applies to property as well — an order will be issued to prevent the property holder from dealing with it. The police will also lodge a caveat against the seized property, which means that they will be informed of any attempts made to deal with the property, such as attempts to purchase, sell, lease or mortgage the property. As for cryptocurrency assets, they are frozen by the authorities.
The CPC mandates that police officers must prepare and sign a list of all items that have been seized during their search, and record the location where each item was found. The full list of the police’s powers in relation to the seizure of assets may be found in Part 4 Division 2 of the CPC.
How long can the assets be held for?
The police can hold onto the assets until the case comes to a conclusion. Hence, the assets can be frozen until an outcome has been decided upon (i.e. a conviction or acquittal of the accused).
How are Seized Assets Disposed of?
Once the case draws to a close and the seized assets are no longer required for the purposes of court proceedings or investigations, they will be forfeited to the state, returned to victims (if they can be located) or returned to the individuals from whom they were seized.
However, if it is proven that the accused person held assets that are disproportionate to their known sources of income, and is convicted of money laundering, then the assets will be confiscated upon their conviction. For example, if the accused person owns $10 million in cash, as well as multiple private properties including a Good Class Bungalow, but is found to have a monthly income of $5,000, this would likely be considered disproportionate.
Confiscation of assets differs from seizure in that while seizure is temporary and lasts for the duration of criminal proceedings (with the possibility of suspects getting back those assets if they have been acquitted by the courts), confiscation is a permanent measure that prevents those convicted of money laundering from accessing their assets.
The court will then hold a disposal inquiry, which is a hearing that occurs at the end of criminal proceedings for the court to decide how the seized assets should be disposed of. The parties involved in a disposal inquiry include the accused, law enforcement agencies, the alleged victims of the criminal activity or true owners of the assets, and perhaps a receiver who may be appointed by the court to handle the assets throughout the inquiry.
Following the disposal inquiry, the assets may be dealt with by the state in the following ways:
If the court orders the assets to be sold via public auction, a sheriff’s sale could take place. The court may order a public auction in situations where there is a need for the assets to be converted quickly into cash, such as when there are monetary claims that need to be satisfied against the convicted person. Seized property may be auctioned and the proceeds may be forfeited to the state.
Returned to rightful owners
If the true owners of the assets can be successfully identified, the court may return the seized assets to them. Assets may also be returned to overseas authorities where there have been formal requests for Singapore authorities to help them confiscate the proceeds of cross-border criminal activity.
To conclude, assets seized are kept in police custody during money laundering investigations and are used as evidence in criminal proceedings. If the accused is convicted, the assets are confiscated and a disposal inquiry will be held to determine how they should be disposed of.
If you or any of your loved ones are currently under investigation for money laundering, you might want to get in touch with a criminal lawyer who can help assess your situation and advise you on the best course of action to take. If the matter goes to trial, a criminal lawyer can help represent and defend you in court.
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