Raffles Money Change (RMC) was implicated in the DoJ’s 136-page document filed in Los Angeles on July 20, though the name may have been erroneously written as “Raffles Cash Exchange”, Singapore’s The New Paper reported.
The Monetary Authority of Singapore (MAS) also found “weak oversight” on the part of RMC, the report added.
The DoJ had filed suits last Wednesday (June 20) saying that over US$3.5 billion was misappropriated from 1MDB.
In its suits, filed in Los Angeles, DoJ said it sought to seize assets “involved in and traceable to an international conspiracy to launder money misappropriated from 1MDB”.
The DoJ alleges that a Malaysian named Eric Tan owns a Singapore bank account from which US$12.8 million had been wire transferred using RMC’s services.
Tan was identified by the DoJ as being a friend of Malaysian financier Low Taek Jho, better known as Jho Low.
According to the daily, this money was believed to have been part of more than US$1 billion that was siphoned from 1MDB bond proceeds and was originally meant to go to energy investments in Abu Dhabi.
In its filing, the DoJ said: “Frequent use of currency exchange brokers… is a technique commonly used by individuals engaged in money laundering and other unlawful conduct to move money in a way that is less likely to be traced by law enforcement and regulatory officials.”
MAS responded to the findings of the DoJ, saying it found “weak management oversight, inadequate risk management practices and internal controls” at RMC, The New Paper reported.
It added that “RMC had failed to identify beneficial owners of the money, verify the authenticity of remittance instructions or assess if the customer’s remittance activities were consistent with the profile of the customer”.
A MAS statement released last week said it is finalising regulatory actions against RMC.
Following the revelations and the implications of the 1MDB saga on its operations, RMC released a statement last Friday saying that it had always cooperated with the authorities in suspected money-laundering transactions.
“The management of RMC believes in having in place strong internal controls and risk management policies, and is constantly working to improving its compliance procedures. It has always, and will continue to, work closely with the MAS to address any issues as required,” the company said.
When pressed for comments pertaining to the specific allegations by the DoJ on 1MDB funds, and its transactions linked to the individuals named, an RMC staff member told the Singapore tabloid that the company could not comment or clarify further about its alleged role in the 1MDB saga.
The DoJ also alleged offences were committed over a four-year period and involved multiple individuals, including Malaysian officials and their associates, who conspired to fraudulently divert billions of dollars from 1MDB.
It specifically named Riza Aziz, who is Prime Minister Najib Razak’s stepson, Low Taek Jho (better known as Jho Low), and Abu Dhabi government officials Khadem al-Qubaisi and Mohamed Ahmed Badawy Al-Husseiny.