SINGAPORE: A 70-year-old man was sentenced to five weeks’ jail for attempting to cheat the Inland Revenue Authority of Singapore (IRAS) of a total sum of S$66,678.40 under the Wage Credit Scheme (WCS). Chou Li Chen was sentenced to five weeks’ jail each for two charges, both of which will run concurrently. Two other charges were taken into consideration for sentencing. He is the first person to be charged and convicted for attempting to cheat on wage credit payouts. The scheme aims to incentivise employers to give wage increments to their employees by subsidising a portion of the increment. Under the current scheme, the Singapore government subsidises 20 per cent of wage increases given to Singaporean employees. At the time of the fraud, it was 40 per cent. Chou tried to deceive IRAS into believing that he had a wage increase of S$41,674 each from four companies – Assobuild, Cap Investment, Interfam, and Virtuality Art and Entertainment in the calendar year of 2013. He therefore attempted to dishonestly induce IRAS into delivering a sum of S$16,669.60 to each of the four companies under the Wage Credit Scheme. At the time of the offences, Chou was the company secretary of Interfam and Virtuality. Court documents showed that apart from Chou, both Interfam and Virtuality had no other employees. Both companies also had no genuine business activity and revenues in 2012 and 2013.
Chou had tried to inflate his average monthly earnings to qualify for the scheme, which was introduced in 2013. For example, between January 2012 and November 2013, Chou’s monthly wages under Interfam were S$491, with a monthly employer CPF contribution of S$19 per month. In December 2013, Interfam then made an additional employer CPF contribution of S$4,830 to Chou, on top of the S$19 contribution. With the additional contribution, this implied that Interfam paid or declared additional wages of S$41,674 to the accused in December 2013 on top of the S$491. Calculations by the CPF Board then found that Chou’s average gross monthly wage was S$3,963.83 in 2013. This was an increase of S$3,472.83 compared to his average monthly wage of S$491 in 2012. CPF also calculated that Interfam was eligible for S$16,669.60 in subsidy under WCS. But due to the sudden spike in wages, IRAS was suspicious and did not disburse the payouts. To allay suspicion, Chou even issued cheques from his personal bank account and deposited it into the companies’ bank accounts. He will then issue a cheque to himself as supposed payment for outstanding wages. In his sentencing submissions, Deputy Public Prosecutor Nicholas Lim said the cheating of government funds cannot be condoned, and that there needs to be deterrence. The prosecutor had asked for a jail term of between five and six weeks, and said Chou’s age was a consideration. Chou will surrender himself on Nov 9 to commence his sentencing.