Public Prosecutor v Vijay Kumar

• Judge: Toh Han Li
• Judgment Date: 28 October 2022
• Neutral Citation: [2022] SGMC 62
• Citation: [2022] SGMC 62
• Court: Magistrates' Court (Singapore)
• Published date: 05 November 2022
• Docket Number: MCN-901981-2021 & Ors, Magistrate’s Appeal No 9194-2022-01
• Plaintiff Counsel: DPP Jordan Li (Attorney-General's Chambers)
• Defendant Counsel: Mr Kanthosamy Rajendran (RLC Law Corporation)
• Subject Matter: Criminal Law,Statutory Offences,Payment Services Act 2019,Criminal Procedure and Sentencing,Sentencing,Carrying on business of providing payment service without a licence
• Hearing Date: 30 September 2022,28 July 2022

Principal District Judge Toh Han Li: Introduction

The accused pleaded guilty to a charge under s 5(3) of the Payment Services Act 2019 (“PSA”) as follows:

You…are charged that you, between 03 February 2020 and 28 June 2020, at East Village Pte. Ltd., located at No. 111 North Bridge Road, #03-03 Peninsula Plaza, Singapore, did carry on a business of providing a payment service in Singapore without a licence, to wit, you provided cross-border money transfer services by receiving a sum of about S$10,123.20 and arranging for the money to be transmitted to persons in Myanmar, when you did not have in force a valid licence from the Monetary Authority of Singapore for the provision of such payment service, and when you were not an exempt payment service provider, and you have thereby committed an offence under Section 5(1) and punishable under Section 5(3)(a) of the Payment Services Act 2019.

Section 5(3)(a) PSA provides that the punishment for an offence under s 5(1) PSA in the case of an individual is a fine not exceeding $125,000 or to imprisonment for a term not exceeding three years or to both and, in the case of a continuing offence, to a further fine not exceeding $12,500 for every day or part of a day during which the offence continues after conviction.

The following charge under s 6(1) of the Money-Changing & Remittance Business Act, Cap 187 (“MCRBA”) was taken into consideration for the purposes of sentencing:

You…are charged that you, between 17 November 2019 and 21 January 2020, did carry on a remittance business at East Village Pte. Ltd., located at No. 111 North Bridge Road, #03-03 Peninsula Plaza, Singapore, when you were not in possession of a valid remittance licence from the Monetary Authority of Singapore, and you have thereby committed an offence under Section 6(1) of the Money-Changing & Remittance Businesses Act, Chapter 187 and punishable under Section 6(2) of the said Act.

Statement of Facts

The accused is a 49-year-old male Myanmar National and a Singapore Permanent Resident.

The accused was the owner and director of East Village Pte Ltd (“the Company”). The Company was involved in the business of importing medicinal products from India and selling international calling cards. The Company operated a shopfront at 111 North Bridge Road #0303, Peninsula Plaza. At the material time, the Company employed one Soe Soe Aye (“Soe”) at the shopfront.

On 28 June 2020, the Commercial Affairs Department (“CAD”) carried out an operation targeting unlicenced remittance activities. During the operation, CAD officers observed two customers at the Company’s shopfront attended to by Soe. Upon confronting them, it was established that the two customers were at the Company to remit monies to their families in Myanmar.

The accused started to provide remittance services to his customers as customers used to approach the Company to ask about such services. Initially, the accused would tell the customers that the Company did not provide remittance services. As some of the customers did not know how to fill up the necessary paperwork for remittance at the licenced remittance agents, the accused would help them to fill up the forms.

Subsequently, the accused decided to provide his own remittance service as customers continued to approach Company to ask about it. In carrying out the remittance service, the accused enlisted the aid of his nephew, Kyaw Min Tun (“Sona”), who was based in Myanmar.

The remittance service provided by the accused operated as follows: The accused would set the exchange rate by taking reference from the rates offered by the DBS iRemit and Singtel Dash services, as these were commonly used remittance services by Myanmar Nationals in Singapore. The accused would set the rate in between those offered by these services and inform Soe of the exchange rate. Soe would deal with the customers who came to the Company’s shopfront. She collected the money in Singapore Dollars from customers who intended to remit monies to Myanmar and issued receipts to them. She would then record the details in an Excel spreadsheet which she uploaded to the Google Drive file-sharing service. Sona would access the spreadsheet on Google Drive and made arrangements for the money (Myanmar Kyats) to be transferred to the bank accounts of the beneficiaries or to be delivered in cash to them if they did not have bank accounts. The accused would use the Singapore Dollars collected to buy goods in Singapore that Sona’s customers required and ship them to Sona in Myanmar.

The accused would usually provide remittance services on Sundays. The customers were primarily foreign workers from Myanmar working in Singapore. In providing the service, the accused charged a fee of $2 to $10 for each transaction. On top of this, the accused would also charge the customers a bank charge of between $1 to $3, dependent on the bank fees incurred in Myanmar for making bank transfers. Where the customers needed to call their families in Myanmar to obtain details of the beneficiaries, the accused would charge them for the international calling card.

The accused had thus provided a cross-border money transfer service as defined in s 2 read with the First Schedule to the PSA.

The accused started providing the remittance service sometime in 2018. Between 3 February 2020 to 28 June 2020, the accused collected a sum of about $10,123.20 which was remitted to Myanmar. Based on the Company’s records, the accused earned a service fee of $80 from those transactions.

Antecedent

The accused was traced for an unrelated offence for the possession of uncensored films under s 21(1)(a) Films Act (Chapter 107) for which he was fined $12,000 on 31 August 2004. A charge of carrying on a business of importing films without a licence under s 6(1)(a) Films Act (Chapter 107) was taken into consideration for the purposes of sentencing.

Prosecution’s submissions on sentence

The Prosecution sought a sentence of at least three weeks’ imprisonment. The Prosecution submitted the primary sentencing consideration for an offence under s 5 PSA was deterrence. The Prosecution referred to the speech of Minister Ong Ye Kung delivered on 14 January 2019 at the Second Reading of the Payment Services Bill, where he highlighted as follows:

The second risk is that payment services may be used for ML/TF [note: refers to money laundering and terrorism financing], such as through illicit cross border transfers, anonymous cash-based payment transactions, structuring of payments to avoid reporting thresholds or the raising or layering of assets or funds for ML/TF purposes. MAS studies the business model of each payment service to determine where regulatory measures should be imposed. The appropriate AML/CFT [note: refers to anti-money laundering and counter financing of terrorism] requirements will be imposed on relevant licensees through Notices issued under the MAS Act. MAS will also provide guidance to the industry.

The Prosecution submitted that abuse of payment services for nefarious purposes clearly affected the delivery of financial services and the integrity of the economic infrastructure. General deterrence must thus assume significance in the sentencing calculus: PP v Law Aik Meng [2007] 2 SLR(R) 814 at [24(e)].

The Prosecution submitted that the sentencing trend for cases under the MCRBA should not continue to be followed for an offence under s. 5(3)(a) of the PSA, for three reasons.

Firstly, the sentencing of offences under the MCRBA has not been considered by the High Court. The only known High Court decision, Chinpo Shipping Co (Pte) Ltd v PP [2017] 4 SLR 983 (“Chinpo Shipping”), offered no guidance as it involved a company and as such there was no issue of a custodial sentences being considered in that case.

Secondly, the usual sentences meted out under the MCRBA did not appear to have fully utilized the full spectrum of the sentencing range under s 6 MCRBA. Section 6 MCRBA prescribed a punishment of up to $100,000 fine and/or imprisonment up to two years, with a further fine of up to $10,000 for every day the offence continues after conviction. The Prosecution submitted that when the MCRBA was first enacted in 1985, the prescribed punishment was up to $5,000 fine and/or six months’ imprisonment, without provision for a continuing offence. In 1996, it was amended to up to $50,000 fine and/or two years’ imprisonment, with an additional fine of up to $1,000 for every day that the offence continued after conviction.

A survey of the cases under s 6 MCRBA (extracted from the Sentencing Information and Research Repository covering the period from 22 October 2001 to 7 December 2022) showed that: The majority of cases were punished with fines (24 out of 33 cases, or about 72.73%); The fines were clustered at the lower end of the range, with 18 of 24 cases (75%) involving fines of $30,000 or less; and There were no cases punished with fines only where the fine exceeded $50,000, in other words, the fines did not exceed half the prescribed range.

The Prosecution referred to Ong Chee Eng v PP [2012] 3 SLR 776 where the High Court opined at [24] as follows:

…where Parliament has enacted a range of possible sentences, it is the duty of the court to ensure that the full spectrum is carefully explored in determining the appropriate sentence. Where benchmarks harden into rigid formulae which suggest that only a segment of the possible sentencing range should be applied by the court, there is a risk that the court might inadvertently usurp the legislative function.

In the circumstances, the Prosecution submitted that given the clustering of sentences at the lower end of the sentencing spectrum (even for cases involving fines only), the sentences imposed under s 6 MCRBA did not appear to have utilized the full sentencing spectrum, and thus, should not continue to guide sentencing for s 5(3) ...