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T Specialist firm also fined $800,000 for its role in sanctions violations, while Wang Zhiguo jailed for a year
Chad O'Carroll November 22, 2019
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A Singaporean national at the center of a sanctions investigation by NK News’s sister site NK Pro in 2017 was on Friday jailed for almost three years for illicitly selling more than S$6 million worth of luxury goods to North Korea, Singaporean media have reported.
Investigation by NK Pro throughout July and August 2017 revealed that several companies directed by Ng ‘Leo’ Kheng Wah, now 57, played a role in exporting goods including high-end liquors, designer watches, perfumes, and musical instruments for sale at boutique luxury shops in Pyongyang.
At the time, Ng called the allegations “baseless” and “fake,” but on Friday was sentenced to 34 months in jail, having pleaded guilty to 10 charges under the United Nations (UN) Act, 10 cheating charges, and a further “140 charges taken into consideration,” Singapore’s Channel News Asia (CNA) said.
In addition, his firm T Specialist International was fined S$800,000, while his Chinese business partner Wang Zhiguo was given a sentence of a year after pleading guilty to 10 charges of cheating, with a further 71 taken into account.
CNA said the Commercial Affairs Department of the Singapore Police Force Read begun investigating the case in August 2017, which is when the second of NK Pro’s two-part investigation into Ng and OCN was published.
Montblanc items for sale at the Pothonggang Ryugyong Shop, with price tag reading: “Luxury watch | Montblanc (Automatic): 460,000 KPW (approx. $4,335 at July 2017 official rates) | Picture: NK Pro
LUXURY LIABILITY
Ng was the director of several Singaporean firms, including OCN (S) Pte Ltd and T Specialist International, two companies revealed by NK Pro in 2017 to have supplied a wide range of luxury goods to Pyongyang’s Bugsae Shop and Pothonggang Ryugyong Store.
Pictures exclusively revealed by NK Pro, in particular, showed the two stores stacked with brands including Gucci, Chanel, Prada, Burberry, and Montblanc.
Japanese brands for sale at the stores – forbidden by the country’s law – included Sony, Panasonic, Yamaha, Seiko, and Pokka, as well as flat-screen TVs, laptops, jewelry, and cameras on display.
Tellingly, stickers bearing the brand name ‘OCN’ could be seen on multiple products within the stores, even including on plastic bags, with the ‘T Specialist’ name also printed on several Singaporean-brand products offered for sale.
T Specialist and OCN previously told the UN’s Panel of Experts (PoE) they had ceased exporting products to North Korea in late 2012, in order to shift business towards the China market.
But the firms’ legal counsel changed its tune in advance of the PoE’s March 2019 report, admitting that exports marked for China had actually been intended for North Korea.
“When pressed on the business justification for shifting its sales to China of the same goods previously sold in the DPRK (including Singapore-distributed items made by Yamaha, Seiko, Montblanc and the like, which all have distributors in China), OCN admitted prior knowledge that the DPRK was the ultimate destination of their goods,” the Panel’s March 2019 report said.
And that evidence appears to have reflected on Friday in Singapore’s legal system, with CNA saying that the court heard that the items were all shipped to North Korea via Dalian, China, with Ng hiding their ultimate destination by failing to declare the final port of delivery to Singaporean Customs.
Watari-brand products on an OCN shop carrier bag | Picture: NK Pro
INVOICE FRAUD
In addition, Ng and his accomplice Wang committed invoice-financing fraud amounting to more than US$95 million (S$129 million), CNA said, because the DPRK partners at Bugsae Shop were failing to make payments for shipments being received.
In order to generate liquidity, Ng “used false invoices purportedly issued by a company owned by Wang to T Specialist, in order to deceive five banks into granting the millions in trade financing loans to T Specialist for goods that did not exist,” CNA reported.
The fake invoices were used to purchase Watari-brand instant noodles, with T Specialist shipping “a few hundred cartons of instant noodles in 2014 to create the perception that Ng was indeed transacting in instant noodles”, CNA continued.
Notably, NK Pro reported that Watari-brand milk powder was also being widely sold in Pyongyang around the time, linked directly to T Specialist, which was the named distributor on the cans.
“A total of 81 fictitious invoices for these [Watari] “noodles” were produced and submitted to the banks, which include DBS Bank, CIMB Bank Berhad, Malayan Banking Berhad, RHB Bank Berhad and Oversea-Chinese Banking Corporation,” the CNA report said.
As a result of the misleading invoices, banks financed cash into Wang’s company, with “the funds … cycled back to the bank accounts of T Specialist and its affiliated companies.”
Notably, no losses were ever incurred by the banks, CNA said, because Ng repaid them in full each time for all of the fictitious invoice financing loans, suggesting he was eventually able to recuperate cash from his partners in Pyongyang.
OCN was first identified by NK Pro reporting in 2017 | Photo: Street Directory.com
PRIOR DENIALS
Ng, speaking through company representatives or locally hired lawyers, repeatedly denied all charges to NK Pro journalists in 2017.
“Our client has complied with all applicable laws and regulations and unequivocally deny any allegations to the contrary,” Chern Yang See, the lawyer formerly representing OCN / T Specialist director Ng ‘Leo’ Kheng Wah, told NK Pro in August 2017.
Then the UN PoE in a report earlier this year recommended that the Security Council designate two associates of OCN/T Specialist as sanctions violators.
The PoE’s report not only confirmed the companies’ exports of sanctioned luxury goods to North Korea, but also shed light on OCN/T Specialist’s reported illegal financial relationships in the country, including one with a bank sanctioned by the U.S. Treasury Department.
“Our clients have no knowledge of the authenticity of the sale of goods in DPRK as included in your letter and no knowledge of how any such goods ended up in DPRK,” OCN representatives told the PoE.
Ng was initially charged with abetting the violation of Section 5(1) of the United Nations Act, along with Section 109 of the Penal Code “and others,” according to earlier legal filings.
The UN Act of 1992 is meant “to enable Singapore to fulfil its obligations respecting Article 41 of the Charter of the United Nations.” Article 41 allows the UN to impose sanctions.
Section 109 of Singapore law is abetment, and pertains to the “support and encouragement of others” in the commission of an offense: a crime for which individuals can be fined up to USD$500,000 and/or imprisoned for up to ten years.
Edited by Oliver Hotham
Featured image: NK News
Chad O'Carroll November 22, 2019
SHARE
A Singaporean national at the center of a sanctions investigation by NK News’s sister site NK Pro in 2017 was on Friday jailed for almost three years for illicitly selling more than S$6 million worth of luxury goods to North Korea, Singaporean media have reported.
Investigation by NK Pro throughout July and August 2017 revealed that several companies directed by Ng ‘Leo’ Kheng Wah, now 57, played a role in exporting goods including high-end liquors, designer watches, perfumes, and musical instruments for sale at boutique luxury shops in Pyongyang.
At the time, Ng called the allegations “baseless” and “fake,” but on Friday was sentenced to 34 months in jail, having pleaded guilty to 10 charges under the United Nations (UN) Act, 10 cheating charges, and a further “140 charges taken into consideration,” Singapore’s Channel News Asia (CNA) said.
In addition, his firm T Specialist International was fined S$800,000, while his Chinese business partner Wang Zhiguo was given a sentence of a year after pleading guilty to 10 charges of cheating, with a further 71 taken into account.
CNA said the Commercial Affairs Department of the Singapore Police Force Read begun investigating the case in August 2017, which is when the second of NK Pro’s two-part investigation into Ng and OCN was published.
Montblanc items for sale at the Pothonggang Ryugyong Shop, with price tag reading: “Luxury watch | Montblanc (Automatic): 460,000 KPW (approx. $4,335 at July 2017 official rates) | Picture: NK ProLUXURY LIABILITY
Ng was the director of several Singaporean firms, including OCN (S) Pte Ltd and T Specialist International, two companies revealed by NK Pro in 2017 to have supplied a wide range of luxury goods to Pyongyang’s Bugsae Shop and Pothonggang Ryugyong Store.
Pictures exclusively revealed by NK Pro, in particular, showed the two stores stacked with brands including Gucci, Chanel, Prada, Burberry, and Montblanc.
Japanese brands for sale at the stores – forbidden by the country’s law – included Sony, Panasonic, Yamaha, Seiko, and Pokka, as well as flat-screen TVs, laptops, jewelry, and cameras on display.
Tellingly, stickers bearing the brand name ‘OCN’ could be seen on multiple products within the stores, even including on plastic bags, with the ‘T Specialist’ name also printed on several Singaporean-brand products offered for sale.
T Specialist and OCN previously told the UN’s Panel of Experts (PoE) they had ceased exporting products to North Korea in late 2012, in order to shift business towards the China market.
But the firms’ legal counsel changed its tune in advance of the PoE’s March 2019 report, admitting that exports marked for China had actually been intended for North Korea.
“When pressed on the business justification for shifting its sales to China of the same goods previously sold in the DPRK (including Singapore-distributed items made by Yamaha, Seiko, Montblanc and the like, which all have distributors in China), OCN admitted prior knowledge that the DPRK was the ultimate destination of their goods,” the Panel’s March 2019 report said.
And that evidence appears to have reflected on Friday in Singapore’s legal system, with CNA saying that the court heard that the items were all shipped to North Korea via Dalian, China, with Ng hiding their ultimate destination by failing to declare the final port of delivery to Singaporean Customs.
Watari-brand products on an OCN shop carrier bag | Picture: NK ProINVOICE FRAUD
In addition, Ng and his accomplice Wang committed invoice-financing fraud amounting to more than US$95 million (S$129 million), CNA said, because the DPRK partners at Bugsae Shop were failing to make payments for shipments being received.
In order to generate liquidity, Ng “used false invoices purportedly issued by a company owned by Wang to T Specialist, in order to deceive five banks into granting the millions in trade financing loans to T Specialist for goods that did not exist,” CNA reported.
The fake invoices were used to purchase Watari-brand instant noodles, with T Specialist shipping “a few hundred cartons of instant noodles in 2014 to create the perception that Ng was indeed transacting in instant noodles”, CNA continued.
Notably, NK Pro reported that Watari-brand milk powder was also being widely sold in Pyongyang around the time, linked directly to T Specialist, which was the named distributor on the cans.
“A total of 81 fictitious invoices for these [Watari] “noodles” were produced and submitted to the banks, which include DBS Bank, CIMB Bank Berhad, Malayan Banking Berhad, RHB Bank Berhad and Oversea-Chinese Banking Corporation,” the CNA report said.
As a result of the misleading invoices, banks financed cash into Wang’s company, with “the funds … cycled back to the bank accounts of T Specialist and its affiliated companies.”
Notably, no losses were ever incurred by the banks, CNA said, because Ng repaid them in full each time for all of the fictitious invoice financing loans, suggesting he was eventually able to recuperate cash from his partners in Pyongyang.
PRIOR DENIALS
Ng, speaking through company representatives or locally hired lawyers, repeatedly denied all charges to NK Pro journalists in 2017.
“Our client has complied with all applicable laws and regulations and unequivocally deny any allegations to the contrary,” Chern Yang See, the lawyer formerly representing OCN / T Specialist director Ng ‘Leo’ Kheng Wah, told NK Pro in August 2017.
Then the UN PoE in a report earlier this year recommended that the Security Council designate two associates of OCN/T Specialist as sanctions violators.
The PoE’s report not only confirmed the companies’ exports of sanctioned luxury goods to North Korea, but also shed light on OCN/T Specialist’s reported illegal financial relationships in the country, including one with a bank sanctioned by the U.S. Treasury Department.
“Our clients have no knowledge of the authenticity of the sale of goods in DPRK as included in your letter and no knowledge of how any such goods ended up in DPRK,” OCN representatives told the PoE.
Ng was initially charged with abetting the violation of Section 5(1) of the United Nations Act, along with Section 109 of the Penal Code “and others,” according to earlier legal filings.
The UN Act of 1992 is meant “to enable Singapore to fulfil its obligations respecting Article 41 of the Charter of the United Nations.” Article 41 allows the UN to impose sanctions.
Section 109 of Singapore law is abetment, and pertains to the “support and encouragement of others” in the commission of an offense: a crime for which individuals can be fined up to USD$500,000 and/or imprisoned for up to ten years.
Edited by Oliver Hotham
Featured image: NK News
