Public Prosecutor v Ho Chee Wai

• Jurisdiction: Singapore
• Judge: Wong Li Tein
• Judgment Date: 25 August 2021
• Neutral Citation: [2021] SGDC 174
• Court: District Court (Singapore)
• Docket Number: District Arrest Case No 913023 of 2021
• Year: 2021
• Published date: 07 September 2021
• Hearing Date: 28 July 2021
• Plaintiff Counsel: Nicholas Lim (Attorney-General's Chambers)
• Defendant Counsel: Judy Ang Pei Xia (JS Law Chambers LLP)
• Subject Matter: Customs and excise,Customs duties,Dutiable goods,Uncustomed goods,Goods and Services Tax (GST)
• Citation: [2021] SGDC 174

District Judge Wong Li Tein:

The Accused, Ho Chee Wai, 37 year-old male Singaporean, was charged for one count under s 128H of the Customs Act (Cap 70, 2004 Rev Ed) (“Customs Act”) and punishable under s 128L(2) of the same Act, by virtue of ss 26 and 77 of the Goods and Services Tax Act (Cap 117A, 2005 Rev Ed) (“GST Act”), amalgamated under s 124(4) of the Criminal Procedure Code (Cap 68, 2012 Rev Ed) (“CPC”) for the importation of 19,764 bottles of assorted brands of liquor and 50,400 cans of beer. Two similar charges and three charges under s 128H of the Customs Act punishable under s 128L(2) of the same Act amalgamated under s 124(4) of the CPC were taken into consideration for purposes of sentencing.

Twelve other persons were charged for similar offences related to this case, the Accused being the first of the group to plead guilty.

For the reasons which I set out below, I sentenced the Accused to a fine of $340,776.60, with eight months’ imprisonment in default.

No appeal has been lodged in this case.

Introduction

This is a case involving an elaborate syndicated scheme concerning the redirection of tax exempted liquor intended for consumption on seabound vessels inland for resale

The charge for which the Accused pleaded guilty to read as follows: You, HO CHEE WAI, are charged that you, on 39 occasions between 27 June 2019 and 18 September 2019, in Singapore, were concerned in delivering uncustomed goods, to wit, 19,764 bottles of assorted brands of liquor and 50,400 cans of beer totalling 39,917.40 litres valued at $973,647.04, which liquor and beer were falsely declared for export in 39 Cargo Clearance Permits which listed M/S EK Marine & Logistics (UEN: 53379374B) as the exporter, and which false declarations were in breach of Section 96 of the Customs Act (Cap. 70) (“the Act”), when the said liquor and beer were in fact diverted into customs territory without payment of Goods & Services Tax of $68,155.32, and these 39 occasions together amount to a course of conduct, and you have thereby, by virtue of Sections 26 and 77 of the Goods and Services Tax Act (Cap. 117A), paragraph 3 of the Goods and Services Tax (Application of Legislation Relating to Customs and Excise Duties) Order (Cap. 117A, Order 4), and paragraph 2 of the Goods and Services Tax (Application of Customs Act) (Provisions on Trials, Proceedings, Offences and Penalties) Order (Cap. 117A, Order 5), committed an offence under Section 128H of the Act punishable under Section 128L(2) of the Act, which charge is amalgamated under Section 124(4) of the Criminal Procedure Code (Cap 68).

The punishment prescribed under s 128(L)(2) of the Customs Act is as follows: Subject to subsection (3), any person who is guilty of a specified offence shall be liable on conviction to a fine of —(a) not less than 10 times the amount of the customs duty, excise duty or tax the payment of which would have been evaded by the commission of the offence or $5,000, whichever is the lesser amount, subject to a minimum of $1,000 where the specified offence involves goods consisting wholly or partly of relevant tobacco products; and (b) not more than 20 times the amount of the customs duty, excise duty or tax the payment of which would have been so evaded or $5,000, whichever is the greater amount, except that where the amount of customs duty or excise duty cannot be ascertained, the penalty may amount to a fine not exceeding $5,000, subject to a minimum of $1,000 where the specified offence involves goods consisting wholly or partly of relevant tobacco products.

The Accused agreed for five other charges concerning the same scheme to be taken into consideration for purposes of sentencing.

Facts

The detailed facts of this case are found in the Statement of Facts which the Accused had admitted to without qualifications. For purposes of explaining my decision vis-a-viz the Accused, I set out briefly the pertinent facts.

Cargo Clearance for Duty Unpaid Alcoholic Beverages

Vessels calling at Singapore’s ports purchase alcoholic beverages for the crew’s consumption free of GST as Singapore Customs regard these beverages as being exported. The sea stores which were permitted to supply these alcoholic beverages and other products to vessels were known as “ship chandling companies”, and they used two main ship terminals for such purposes – Marina South Wharves and Penjuru Terminal.

Upon receiving an order for duty unpaid alcoholic beverages, the ship chandling company would work with a licensed warehouse to make the necessary declarations on Singapore Custom’s online system to obtain a cargo clearance permit to cover the export of dutiable goods intended for consumption onboard these ships. Cargo clearance permits, which were also known as “OX Permits”, contained multiple conditions, including the fact that the declared goods must be collected and delivered directly to the place of receipt by the same commercial vehicle without detour, except to another warehouse for consolidation or whilst waiting for the vessel to arrive. Once the duty unpaid alcoholic beverages were conveyed to the Marina South Wharves or Penjuru Terminal, the OX permit had to be endorsed by both the Auxiliary Police Officer on duty, as well as the vessel master, in order to prove that the goods had been physically exported to and received at the vessel.

Modus Operandi

In 2017, two of the accused persons, one Teo Tian Soon @ Muhammad Ridwan Teo (“Teo”) and Lim Wei Luen (“Lim”), conjured an elaborate plan to fraudulently evade payment of excise duty and GST on alcoholic beverages by diverting tax exempted liquor and beer which had been custom cleared for sale inland. This scheme involved two legs. In the first leg, overseen by Teo, duty unpaid alcoholic beverages would be purchased from a sea store. Individuals would be recruited for purposes of lending their names to set up shell entities as company directors or sole proprietors, which would then be named as exporters on the OX permits. Stamps would be ordered to falsely endorse these permits by non-existent duty Auxiliary Police Officers and vessel masters.

In the second leg, the duty unpaid alcoholic beverages would be repacked for distribution and sale within Singapore. Lim was in charge of sourcing for local buyers, as well as recruiting drivers for the delivery of these goods from the licensed warehouse to the holding warehouse.

Facts Relating to Charge

The Accused got to know one of accused persons, one Cheong Kah Shen (“Cheong”), when he was employed at Odessea Inspection Services Pte Ltd from 2010 to 2016. In June 2018, he met Cheong again by chance, whereupon Cheong asked if he was keen on a job as an alcoholic beverages deliveryman earning $300 per day or $600 per week, depending on the number of days he worked. Cheong explained that these were duty unpaid alcoholic beverages meant for consumption onboard seafaring vessels, but the Accused would be diverting them inland. He also informed the Accused that he would be replacing one Tan Kim Kiong (“Tan”), who used to assist Cheong with such deliveries. Sometime in July 2018, the Accused accepted Cheong’s offer.

Investigations revealed that from June 2019, the Accused assisted Cheong in the delivery of duty unpaid alcoholic beverages from various licensed warehouses to holding warehouses for repacking. At the licensed warehouses, either the Accused or Cheong would sign on the delivery orders issued by the licensed warehouse and be given copies of it. They would then load the goods into their delivery vehicle for delivery to holding warehouses and assist with loading them into other delivery vehicles on occasion. Both Cheong and the Accused would either leave the copies of OX permits and delivery orders in the holding warehouses’ mailboxes or hand them to Teo, if he was present. After the work for each week was completed, Cheong would hand the Accused between $300 to $600 for the week, based on the number of days he worked that week. The money from Cheong came from Lim. This carried on until 7 November 2019.

Day of the Arrest

On 7 November 2019, a bonded truck (registration number YM9746P) carrying duty unpaid alcoholic beverages covered by two OX permits was observed by Singapore Customs officers to leave Warehouse Logistics Net Asia, a licensed warehouse. Instead of driving to Marina South Wharves, where the goods were to be off-loaded according to the OX permits, the truck was seen driving to Pioneer Point Warehouse. There, the goods were unloaded into unit #02-60. Thereafter, the goods were loaded into a white van (registration number GBA4182C), which then left the premises. The Accused and other persons were subsequently arrested when Singapore Customs officers moved in at the scene.

The Accused’s Involvement

According to the Statement of Facts, the Accused was involved in the delivery of duty unpaid alcoholic beverages on 39 occasions between 27 June and 18 September 2019. The deliveries concerned 19,764 bottles of liquor and 50,400 cans of beers totaling 39,917.40 litres and valued at $973,647.04, which were diverted into customs territory without GST payment amounting to $68,155.32. At all times, the Accused was aware that the alcoholic beverages were duty unpaid and intended for sea stores. When he delivered them to holding warehouses instead of ship terminals as stated on the OX permits, the goods essentially became uncustomed goods.

The Accused admitted that he had, by virtue of the foregoing, committed an offence under s 128H of the Customs Act punishable under s 128L(2) of the same Act as charged.

Issues to be determined

The offences committed by the Accused were part of the largest and longest-running syndicated operation involving duty unpaid alcoholic beverages uncovered in Singapore. The amount of duty unpaid liquor intended for export to sea-faring vessels which were diverted inland for over two...