SINGAPORE: A mastermind behind a scheme to falsify audit documents to cover up how his company overcharged the Singapore Prison Service for goods and services was sentenced to 15 months in prison on Thursday (April 8th).
Loo Yew Tek, 50, pleaded guilty to 30 counts, mostly conspiring to use a false document as genuine, with 88 other charges considered. He was already serving a 14-month jail sentence on other charges related to this case when he received the new sentence.
The court heard that there was no way for the Office of the Auditor General (AGO) to determine the total amount of losses caused to the prisons, as Loo had ordered the documents to be discarded.
Loo was the senior project manager of Thong Huat Brothers – one of Singapore’s oldest civil engineering and construction contractors – and director of Innova Development at the time of the offenses.
He had several accomplices in the project, including Chew Tee Seng, the director of the Prison Infrastructure Development Directorate at the time, who was jailed for 10 months in 2016.
In July 2011, the AGO began to audit the Singapore Prison Service and requested supporting documentation from them on some work performed by Thong Huat during fiscal year 2010. The company had performed the work in under a contract with the Ministry of Internal Affairs.
The work was managed by CPG Facilities Management on behalf of the prisons, and the business-to-business company received a fee of 4.5 percent on the value of the work.
Thong Huat, the main contractor, was supposed to request quotes from potential subcontractors and submit claims for the acquisition of certain goods and services, and submit three quotes to CPG for the prison works.
Typically, CPG would recommend the lowest quote to the prison service, and Thong Huat would also need to prepare a detailed list with job details before starting.
However, when the AGO requested supporting documents for audit purposes, CPG agents realized that they did not have a full set of required documents from Thong Huat.
These documents included quotes from subcontractors as well as forms and invoices, and they were missing due to oversight failures of CPG and the Prison Service as they did not ensure that Thong Huat had duly submitted the documents, said the prosecution.
The conspirators then held a meeting in August 2011, where Loo admitted that some previously submitted quotes and invoices were forged documents prepared by Thong Huat’s quantity surveyor.
He said they could not submit these documents to the AGO and had them rejected. Loo also told the conspirators that the rates shown on the lowest quotes and invoices from contractors subject to the prison service were marked up by Thong Huat.
Thong Huat had actually overcharged the prison service because he was paying the subcontractor less than what was stated in the forms and quotes. Loo said he was aware of this surcharge and that Thong Huat had done it to make up for a 57.2% discount he was giving.
Loo shared his previous meetings with the AGO on some Coast Police projects and said he expected their listeners to persist in their requests for documents his company would not be able to provide.
He then suggested preparing the lowest “backdated” quotes to get around the problem. Chew, the director of the prison infrastructure development directorate at the time, agreed.
Chew compiled several forged documents and they were submitted to the AGO as genuine documents.
THERE ARE TURNED FLAGS
However, the AGO reviewed the documents and identified several shortcomings of the prison service leadership in the procurement process. Chew, acting on behalf of the prisons, filed a police report in May 2012 on the forged documents, and the business affairs department uncovered the scheme.
Prosecutors called for 15 months in jail for Loo, calling him the main driver and “mastermind” of the scheme. Loo had perpetuated the fraud against a public institution, with a “significant” amount involved in the case which caused tangible harm to the prison service, they said.
In eight months, 126 forged documents were submitted to defraud the AGO and disrupt its audit of the prison service.
“In the present case, the actions of the accused threatened the belief and expectation of Singaporeans that government contractors who obtain contracts with public funds do not overcharge public institutions and subsequently cover their overbilling with false documents, “prosecutors said.
“Compared to all the previous convictions, the defendants and the co-conspirators falsified and used a greater number of documents,” they added.
“Unlike the previous ones, the public institution that the defendants were defrauding is not an ordinary government service, but the AGO. Unlike other government departments which spend public funds for the public good, the AGO is the very public institution charged with the responsibility of auditing and auditing all other government departments. “