Singapore banks probe rich clients, train staff to spot money laundering tricks

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CITIGROUP, DBS Group Holdings and other banks caught up in Singapore’s biggest money-laundering scandal are ramping up scrutiny of their wealthy customers and potential clients to avoid exposure to illicit flows, according to sources familiar with the matter.

Private bankers at several institutions are also receiving additional training to help them spot tricks used by criminals to mask their backgrounds and sources of funds, said the sources, who asked not to be identified discussing private matters.

The moves, which are voluntary, show how lenders are trying to close loopholes that enabled a group of criminals from China to launder more than S$3 billion in proceeds from online gambling through at least 16 financial institutions in the island nation. The scandal has tarnished Singapore’s image and exposed weaknesses in how local and foreign banks and brokerages screen their clients.

The Monetary Authority of Singapore (MAS) recently completed on-site inspections of some banks that were involved in the case. Lenders that had the most dealings with the criminals – through deposit accounts, loans and other financial services – are expected to face fines and other punitive measures from the financial regulator after its review concludes, some of the sources said.

Note: Chart does not reflect banks’ full exposures and may change. Exact amounts may differ from final seizure tally due to changes in account amounts from time of seizure and exchange rate variations. OCBC tally includes assets held by Bank of Singapore, its private bank arm. Source: Court documents seen by Bloomberg

The MAS will assess if the financial institutions have implemented adequate and appropriate controls against money laundering and terrorism financing and will take action if they have fallen short of requirements, as it has done in past cases, a M...

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