Singapore banks investigating wealthy clients after money laundering allegations: people familiar with the matter

According to a report from Bloomberg citing informed sources, Citigroup, DBS Group Holdings Ltd, and several other banks are increasing their scrutiny of wealthy and potential clients to avoid contact with illegal fund flows after being implicated in Singapore's largest money laundering scandal.

Insiders say that private bankers from several institutions are also receiving additional training to help them identify the means used by criminals to conceal their backgrounds and sources of funds. These insiders requested anonymity because they were discussing private affairs.

These voluntary measures indicate that lending institutions are working to plug loopholes that have allowed a group of criminals to launder more than SGD 3 billion (approximately USD 2.23 billion) in online gambling proceeds through at least 16 financial institutions in Singapore. This scandal has damaged Singapore's reputation and exposed weaknesses in local and foreign banks and brokerage firms in screening clients.

The Monetary Authority of Singapore recently completed on-site inspections of some of the implicated banks. Insiders say that banks with the most transactions (including deposit accounts, loans, and other financial services) with these criminals are expected to face fines and other penalties after financial regulators complete their reviews.