Kim Heng Jewellers and Goldsmiths, a long-standing jewellery business based at People’s Park Complex in Singapore, has been fined S$35,000 under the Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act.
The fine follows the retailer’s failure to perform mandated customer due diligence (CDD) in transactions involving over S$313,000, of which more than S$140,000 originated from malware scam victims.
This is the first prosecution under the 2019 legislation addressing money laundering and terrorism financing risks in the precious stones and metals sector.
Background of the Case
The Precious Stones and Precious Metals Act was enacted to strengthen Singapore’s anti-money laundering framework. It requires regulated dealers to verify customer identities, confirm cash ownership, and maintain proper records for transactions above certain thresholds or in cases of suspected illicit activity.
Kim Heng Jewellers processed several transactions in 2023 without the required checks. Two related charges were considered in court, with the company pleading guilty to one charge involving S$173,000.
According to court documents, two employees of Kim Heng handled these transactions without verifying the customers’ identities, even when there were apparent red flags. This included payments made via a compromised corporate account and purchases by a customer acting on behalf of another party.
Details of Transactions
In one instance, a masked woman, identified as AS1, purchased a gold chain worth S$28,000 using funds transferred via PayNow from a compromised corporate account. A subsequent transaction saw AS1 and a partner, AS2, purchasing multiple gold items worth over S$173,000. Neither transaction included CDD checks.
In October 2023, AS2 arranged another purchase of gold items worth S$112,000. The store processed the payment without verifying the identities of AS1 or AS2, despite growing concerns about the transactions.
The offences came to light after two victims of the malware scams reported their losses to authorities.
Implications for the Jewellery Sector
This case highlights the jewellery industry’s obligations to comply with anti-money laundering measures, as regulators tighten oversight of high-value transactions. Retailers should provide training and establish clear procedures to address money laundering risks.
