SINGAPORE – A man was working as a pawnshop managing director when he misappropriated more than $5.4 million from it on multiple occasions between 2013 and 2018.
Li Yong De, who worked for Sin Lian Pawnshop, also duped United Overseas Bank (UOB) into handing the firm more than $1 million in 2018.
The 35-year-old Singaporean was sentenced on Monday (May 31) to 14 years’ jail and a fine of $60,000. He will have to spend a further 20 weeks behind bars if he is unable to pay the amount.
Li, who is no longer working for the pawnshop, had earlier pleaded guilty to eight charges including criminal breach of trust, cheating and dealing with the benefits of his ill-gotten gains. Fifteen other charges were considered during sentencing.
Li had joined the pawnshop as a valuer before becoming a director in 2010. He later became its managing director.
Deputy Public Prosecutors Eric Hu and Shamini Joseph stated in court documents that his responsibilities included valuing luxury watches and jewellery as well as conducting daily checks on the pawnshop’s cash float.
He was also entrusted with items including funds in the shop’s bank account and its cash float.
In 2011, its shareholders set up a peripheral business called Sin Lian Watch & Jewellery on the pawnshop’s premises in Bedok. The new company was to buy unredeemed pledges from the pawnshop.
Li wanted to buy over Sin Lian Watch & Jewellery two years later. To fund this purchase, he made unauthorised cash cheque withdrawals totalling $350,000 from the pawnshop’s UOB account in 2013.
He then changed the firm’s name to Prestige Watches & Jewellery.
To cover his tracks for the offence involving the $350,000, Li misappropriated 30 watches from Prestige worth $200,000 and pawned them to Sin Lian Pawnshop under a single ticket with another person’s name.
This gave the appearance that the pawnshop had given a $200,000 loan with the 30 watches pledged as collateral. Li used monies from the pawnshop’s cash float to account for the remaining $150,000.
He continued misappropriating money and over the years, the total amount swelled to more than $5.4million.
The DPPs said that to cover his misappropriation, he created fake pawn tickets under different identities to “create the illusion” that the pawnshop “had given out loans in exchange for pledges when there were no such pledges in reality”.
Among other things, Li used the cash to gamble at local casinos and settle his personal expenses.
The DPPs said: “The accused’s actions went unnoticed as he was given full discretion and had oversight over the running of (Sin Lian Pawnshop). He was only required to report to the shareholders at the end of each year.”
They said he was solely responsible for conducting the daily checks on the pawnshop’s cash float, which ranged in the hundreds of thousands of dollars, and pledges. “Just before each annual audit, the accused would top up the shortfall in the cash float to avoid detection.”
With the fake pawn tickets created, the monthly returns showed an inflated total stock value of pledges at Sin Lian Pawnshop.
Between February 2014 and April 2018, Li submitted the monthly returns to UOB showing this false information.
As a result, the bank extended a line of credit that was higher than what it would have permitted and was duped into disbursing more than $1 million.
He then pocketed most of the funds disbursed after making unauthorised withdrawals from the pawnshop’s bank account.
Li also used $77,000 of his ill-gotten gains to settle the down-payment for a Mercedes Benz car.
Between 2014 and 2017, audits conducted on Sin Lian Pawnshop’s accounts did not manage to uncover any irregularities. But they were uncovered in 2018, following further checks.
The DPPs said: “The audit team asked the accused to provide the supporting documents and he delayed providing (them).
“Some time in August 2018, the accused was discovered to have created false pawn tickets. When confronted during a shareholders’ meeting on Aug 11, 2018, the accused admitted to the… offences.”
A shareholder alerted the police later that day. Li has made no restitution to Sin Lian Pawnshop.
For criminal breach of trust, an offender can be jailed for up to 15 years and fined.
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