The Singapore Law Gazette

Ignorance is Now a Sin

The Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) (Amendment) Bill (CDSA Bill)

Introduction

You befriend “Joey” (a sweet young thing) on social media. One day, Joey asks for your urgent help to receive funds into your bank account and transfer the funds to another bank account. Joey says this is because the creditor had insisted on being paid via a Singapore bank account. Joey promises to make it worth your while. You agree to aid the damsel in distress.

The above scenario is a common scam which turns unsuspecting victims into money mules.¹See https://www.scamalert.sg/scam-details/money-mule-scam for a collection of scammers’ modus operandi based on real accounts by money mule scam victims. Under our present laws, the authorities would have difficulty prosecuting you for acting as a money mule, so long as you insist that you thought you were merely saving the sweet young thing from her predicament.²MHA 18 April 2023 Press Release at paragraph 4: https://www.mha.gov.sg/mediaroom/press-releases/amendments-to-the-corruption-drug-trafficking-and-other-serious-crimes-confiscation-of-benefits-act-and-the-computer-misuse-act/ This is because our existing money laundering offences (sections 50, 51, 53 and 54 of the CDSA³https://sso.agc.gov.sg/Act/CDTOSCCBA1992?WholeDoc) require proof of knowledge or reasonable grounds to believe that the money being transacted is linked to criminal activity.

Due to the difficulty of satisfying this mens rea requirement, out of the 19,000 money mules investigated by the Police from 2020 to 2022, fewer than 250 money mules were actually prosecuted.⁴Second Reading of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) (Amendment) Bill and Computer Misuse (Amendment) Bill – Speech by Mrs Josephine Teo, Minister, MCI & Second Minister, MHA: https://www.mha.gov.sg/mediaroom/parliamentary/second-reading-of-the-corruption-drug-trafficking-and-other-serious-crimes-bill-and-computer-misuse-bill/ Thus, “act blur live longer” appears to be a viable defence under our existing money laundering legislation.

However, the days of the blur money mules are numbered. The CDSA Bill⁵See the CDSA Bill:

https://www.parliament.gov.sg/docs/default-source/default-document-library/corruption-drug-trafficking-and-other-serious-crimes-(confiscation-of-benefits)-(amendment)-bill-12-2023.pdf

plugs this lacuna by introducing new offences of negligent and rash money laundering, as well as new provisions which place the burden on the accused to prove lack of mens rea once certain factual circumstances are proven by the Prosecution. This article summarises the amendments made by the CDSA Bill and reflects on their potential effects on future accused persons.

Amendments to Sections 50, 51, 53 and 54 – New Offences of Negligent and Rash Money Laundering

The newly inserted section 50(1A) of the CDSA states:⁶Supra note 5, clause 3.

(1A) Subject to subsection (3), a person (A) –

(a) who enters into, or is otherwise concerned in, an arrangement under which

(i) the retention or control by or on behalf of another person (B) of B’s, or any other person’s, benefits of drug dealing is facilitated (whether by concealment, removal from jurisdiction, transfer to nominees or otherwise);

(ii) funds that are placed at another person’s (B) disposal are secured, directly or indirectly, by B’s, or any other person’s, benefits of drug dealing; or

(iii) property is acquired for another person’s (B) benefit, by way of investment or otherwise, using B’s, or any other person’s, benefits of drug dealing; and

(b) who –

(i) does so rashly in respect of the circumstance that the arrangement relates to benefits of drug dealing; or

(ii) does so negligently,

shall be guilty of an offence.

The newly inserted section 51(1A) of the CDSA mirrors section 50(1A) save that references to “drug dealing” are replaced with “criminal conduct”.⁷Supra note 5, clause 4.

The newly inserted section 53(3A) will state:⁸Supra note 5, clause 5.

(3A) Any person –

(a) who –

(i) conceals or disguises any property which is, or in whole or in part, directly or indirectly, represents, another person’s benefits of drug dealing;

(ii) converts or transfers that property or removes it from the jurisdiction; or

(iii) acquires, possesses or uses that property; and

(b) who –

(i) does so rashly in respect of the circumstance that the property represents another person’s benefits of drug dealing; or

(ii) does so negligently,

shall be guilty of an offence.

Similarly, the newly inserted section 54(3A) of the CDSA mirrors section 53(3A) save that references to “drug dealing” are replaced with “criminal conduct”.⁹Supra note 5, clause 6.

“Rashly” and “negligently” are defined in sections 26E(1) and 26F(1) of the Penal Code:¹⁰https://sso.agc.gov.sg/Act/PC1871?WholeDoc=1

“Rashly”

26E.—(1) Whoever does any act knowing that there is a real risk that a particular circumstance exists or will exist is said to do that act rashly in respect of that particular circumstance, if it would have been unreasonable to have taken that risk.

“Negligently”

26F.—(1) Whoever omits to do an act which a reasonable person would do, or does any act which a reasonable person would not do, is said to do so negligently.”

Pursuant to section 6A of the Penal Code, these definitions are applicable to “any offence … in any written law”, which includes these new provisions of the CDSA.

As explained by the Penal Code Review Committee, section 26F of the Penal Code codifies the holding in Public Prosecutor v Hue An Li [2014] 4 SLR 661 at [71] that the standard of care applicable to criminal negligence is the same as that of civil negligence.¹¹Report of the Penal Code Review Committee at paragraph 51:

https://www.reach.gov.sg/-/media/reach/old-reach/2018/public-consult/mha/annex–pcrc-report.ashx

Thus, the courts in determining the scope of the new provisions would need to address the following questions:

1. When does one cross the threshold of knowing that there is a real risk that the sweet young thing is trying to pull a money mule scam?
2. How would a reasonable person act when encountering a money mule scam?

Pending the interpretation of the new provisions via case law, we may get some guidance from the “5 Scam Signs” identified by Scam Alert (a project maintained by the National Crime Prevention Council):¹²https://www.scamalert.sg/scam-signs

(a) Tempting offers – offers that are inconceivable or way below market rates.

(b) Unexpected friend requests – online friend request from an unknown person.

(c) Pay by gift cards or credits – you are asked to pay for a service with gift cards or shopping credits.

(d) Urgent money transfers – request to make urgent funds transfers.

(e) OTP requests – you are asked to reveal your OTPs (One-Time Passwords).

New Section 55A – Placing the Burden of Proving Lack of Mens Rea on the Accused Once Certain Facts are Proven

The new section 55A of the CDSA largely mirrors the aforementioned sections 50(1A), 51(1A), 53(3A) and 54(3A), save for two material differences.

The first difference is that instead of imposing a mens rea requirement of rashness or negligence, section 55A of the CDSA imposes an additional actus reus requirement that the accused’s actions must fall into one of these four circumstances:¹³Supra note 5, clause 7. See also supra note 4 at paragraph 37.

1. The value of the property he dealt with is disproportionate to his known sources of income;
2. He allowed another person, or persons, to access, operate or control his payment account and failed to take reasonable steps to find out the purpose of this arrangement;
3. He received or transferred money using his payment account and failed to take reasonable steps to find out the source or destination of the money; or
4. He received money from or transferred money to another person, or persons, and failed to take reasonable steps to find out that person’s identity and physical location.

The second difference is that the new section 55A(3) of the CDSA provides that it is a statutory defence for the accused to prove that he did not know and had no reason to believe the transactions to be related to benefits of drug dealing or criminal conduct.

The upshot is this: Upon the Prosecution proving one of the four additional actus reus requirements under section 55A of the CDSA, the offence is made out unless the accused is able to prove lack of mens rea.

An accused who relies on a statutory defence must prove it on a balance of probabilities.¹⁴See Roshdi bin Abdullah Altway v Public Prosecutor and another matter (2021) SGCA 103 at (73). It is difficult to imagine what evidence can be adduced to prove lack of mens rea, unless the accused had the foresight to document his reasoning process for concluding that the transaction was not related to benefits of drug dealing or criminal conduct.

Conclusion

The Victorian poet Robert Browning (who wrote the Pied Piper of Hamelin) once said that “ignorance is not innocence but sin”. Rightly or wrongly, the CDSA Bill reflects this worldview:

1. The amended sections 50, 51, 53 and 54 of the CDSA would allow those who did not intend to act as money mules to still be prosecuted, if he had acted rashly or negligently; and
2. Under the new section 55A of the CDSA, once the additional actus reus requirement is made out, the accused is required to prove his lack of knowledge and that he had no reason to believe the transactions to be related to crime proceeds (i.e. mere ignorance is not enough if he had failed to recognise “red flags”).

The government’s justification for this tough stance is that money mules inflict great harm by moving proceeds of criminal conduct beyond the reach of the authorities. This destroys the prospects of financial recovery for victims of crime.¹⁵Supra note 4 at paragraph 18(d).

However, mens rea in criminal law plays the crucial role of preventing the conviction of the morally innocent – those who do not understand or intend the consequences of their acts.¹⁶R v Theroux (1993) 2 SCR 5 at 17 per McLachlin J; see also Kumaralingam Amirthalingam, Ignorance of Law, Criminal Culpability and Moral Innocence : Striking a Balance between Blame and Excuse (2002) 1 SJLS 302. Thus, the side effect of watering down mens rea requirements is that the morally innocent lose their refuge in the letter of the law. The ease of securing a conviction means that their fate now largely hangs on the judicious exercise of prosecutorial discretion.

It is timely to consider Prof Michael Hor’s clarion call in 2006 to stem the ongoing erosion of mens rea requirements in Singapore law:¹⁷Michael Hor, Managing Mens Rea in Singapore (2006) 18 SAcLJ 314 at paragraph 100.

“The state of mens rea in Singapore is not a particularly happy one… The single most striking feature has been the advent of negligence as the mens rea of choice. In striking fashion, the drugs and immigration cases demonstrate how negligence has muscled in, even where the Legislature has been explicit that only knowledge should be the mens rea. A parallel development has been the equating of criminal with civil negligence, both in terms of the standard of care and the rather extreme objectivist view of it, resulting in a significant lowering in the threshold of what has to be shown for criminal negligence … . Instrumental arguments about the unworkability of the principle of full mens rea have been very far from convincing … . The ethical and symbolic cost of punishing the innocent must not be forgotten. The plea here is for the appropriate scrutiny, both judicial and legislative, of claims that the requirement of full mens rea would adversely and intolerably affect the criminal justice system. The bureaucracy will almost invariably try to make their job of enforcement easier. Our judges and lawmakers must play their part in being a restraining influence.” (emphasis added)