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Reports by
Wong Wei Kong (Business Times 16 Feb 2004)
HOW HE DID IT
Boey Wei Weng was a long-serving employee at Eurocopter South East Asia Pte Ltd (ESEA) and was even promoted on the job. But for an entire year, he was siphoning company funds of more than $1 million. Quite easily, he created and submitted false invoices without leaving any trace of suspicion and then resigned from the company. Three months after he quit, the company realised something was amiss, and the CAD was called in. Boey was convicted and sentenced to a total of seven years and two weeks' imprisonment.
HE WAS neither a compulsive gambler nor a lavish spender. On the contrary, Boey Wei Weng seemed a decent and simple man, a good husband and father of two young children who wanted to provide the best for his family. But appearances sometimes flatter to deceive.
On Dec 28 2001, a police report against Boey was made by the vice-president of finance of Eurocopter South East Asia Pte Ltd (ESEA), a company where Boey had worked for over eight years before resigning. ESEA was in the business of providing a full range of helicopter products and support services, such as spare parts, component repair and overhaul, and helicopter maintenance.
It had employed Boey as a technical planner in September 1993 and later promoted him to customer service executive in January 1999. He resigned on Sept 24, 2001 and left the company a month later.
The allegations against him were serious: Boey did not handle cash - his responsibility was to issue work orders to the company's appointed vendors to carry out repair jobs and he was in charge of supporting a group of local customers like the Republic of Singapore Air Force and STA Systems.
Still, ESEA alleged that between June 2000 and October 2001, Boey had systematically generated a series of false work orders and other documents to cheat the company of about $1 million. He was accused of making unauthorised and fictitious purchases for his own use as well as conspiring with his wife to register four businesses to issue invoices to ESEA for unauthorised and fictitious repair work on helicopter components.
The Commercial Affairs Department (CAD) was called in, and immediately set up an investigation team under Station Inspector (SI) Lim Kok Seong and a separate team with the task of recovering the money. The teams swung into action and raided Boey's home, where 12 notebooks and three desktop computers, some hard disk drives, documents relating to his wife's four businesses, fixed deposit advice slips, ATM cards, and bank passbooks were seized.
What was discovered at Boey's Serangoon Central flat was enough to incriminate him. About $588,000 was seized from the fixed deposit accounts as well, including about $535,000 suspected to be related to fraudulent activity. Investigators found that Boey had also made a deposit of $200,664 for a unit at Sunglade Condominium.
The case highlights how someone like Boey could easily take advantage of his position and years of experience to outsmart the processes and systems in place and abuse the trust placed in him. According to CAD, random audit checks should be conducted by companies to prevent and deter experienced employees from exploring loopholes and outsmarting the processes and systems in place.
'He saw an opportunity to take advantage of the lack of audit checks in his company and he took it,' said SI Lim, who led a team comprising Mohd Shahri, Sek Chee Wah, Henry Tan, Chew Keng Liew, Lee Kah Mun and Emmanuel Goh Kuang Keng to crack the case.
In fact, ESEA had discovered the fraud by accident. On Dec 13 2001, after Boey had left the company, the accounts department of ESEA sent a request to the logistics/operations manager for approval to pay a vendor's invoice. The manager was surprised, as the department did not normally make purchases.
Checks found that Boey had acknowledged the receipt of the goods. Documents from the vendor could not be found, but another invoice for a second vendor was discovered for the same purchase. While records showed that the purchased item was issued to the hangar for in-house repair by ESEA's workshop, the work order was missing. The part number of the item was also not found in the master catalogue and the second vendor was not listed as ESEA's appointed vendor. The discrepancies alerted ESEA that something was amiss, and as it subsequently discovered, that was just the tip of the iceberg.
Sometime in May 2000, Boey had successfully cheated the company for the first time, starting on a modest scale. He placed an order for two Compaq notebooks with Zircom Technology for his own use but devised a scheme to get ESEA to pay for it. Boey generated two fictitious work orders and signed it without the knowledge of the operations manager or assistant manager who were authorised to approve the order. In June, the items were delivered to ESEA and Boey acknowledged receipt of the goods. He also generated the price receiver report to show the receiving entry and submitted it to the accounts department for payment to the vendor. The two notebooks were later recovered from his home.
Emboldened, Boey used the same modus operandi to generate 16 other work orders with Zircom, two with Compaq Asia Computer Pte Ltd and nine with Toshiba Data Dynamics Pte Ltd for unauthorised purchases between August 2000 and October 2001. Most of these items were later found in Boey's home. In addition to unauthorised purchases, Boey also generated 11 work orders for fictitious purchases from Zircom. The unauthorised and fictitious work orders involved a total $157,196.
Boey then grew more ambitious. In early April 2001, he told his wife to set up four sole proprietorships with the intention of subcontracting repair jobs from ESEA. Between April 2001 and October 2001, Boey generated 102 work orders and subcontracted fictitious repair jobs to the four businesses that were registered under his wife's name. All that was done without the knowledge and approval of the operations manager or the assistant manager.
The total amount involved was $885,900, although ESEA managed to stop one payment of $29,964. It still found itself cheated of $855,936.
For the CAD investigators, those 102 work orders, in 81 invoices, posed a particular challenge. How could they establish that those were not genuine work orders? After all, Boey vehemently claimed that genuine repair jobs were done for ESEA by his wife's four businesses.
That called for some meticulous investigative work. The CAD officers narrowed their focus and painstakingly scrutinized six of the 81 invoices.
Boey had used two of his wife's four businesses to issue the invoices to ESEA. He had also used six hard disk drives bought from Zircom at $480 per piece and re-sold them to ESEA at a price of more than $9,000 each. The serial numbers of the items in the invoices issued by his wife's two companies were found to be a duplicate of those supplied by Zircom. The six hard disk drives were later found at ESEA and seized as case exhibits.
While the six invoices were shown to be fake, a question still remained over the remaining 75 invoices. Were they genuine repair jobs done by the four businesses for ESEA? If there were indeed repairs done, as Boey claimed, would he then be guilty of having committed any criminal offence? The CAD officers found themselves with an uphill task to disprove Boey as ESEA's computer system did record an acknowledgement of the items repaired.
They found the vital link: the parts numbers contained in the 75 invoices. It was discovered that the parts numbers quoted were not listed as helicopter components or sub-components in the illustrated parts master catalogue.
That enabled the officers to establish that the repair jobs were fictitious as no such helicopter parts existed in the first place.
CAD managed to complete the investigation within four weeks and had Boey prosecuted in court within six weeks. Boey was charged with 69 counts of cheating and seven counts of transferring or converting benefits from criminal conduct under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA). Prosecutors proceeded on 15 cheating and two CDSA charges. Boey, 38 then, was eventually convicted and sentenced to a total of seven years and two weeks' imprisonment.
'Never judge a book by its cover - these words struck me when my team was on the case,' said SI Lim. 'Boey was a decent man whose job did not require him to have direct access to company funds.'
'Greed, however, got the better of him.'
How companies can deter fraud by employees
- Conduct random audit checks
- Be aware that long-serving or experienced employees may be tempted to explore loopholes and outsmart processes and systems in place, or even abuse their positions of trust
'Companies should perform frequent audit checks to prevent similar occurrences. Do not present such opportunities to perpetrators of crime.' - CAD Station Inspector Lim Kok Seong |
Click here (2.48MB) to view article.
This is a part of a weekly series produced in collaboration with the Commercial Affairs Department (CAD).
Singapore's white-collar crime busters, the CAD is opening the files of some of its cases to The Business Times.
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| Last updated on 17 May 2007 |
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