SINGAPORE (The Straits Times/Asia News Network): A director of multiple companies was sentenced to 20 months’ jail and ordered to pay a penalty of S$1,520,800 on Tuesday (Aug 29) for offences committed in relation to a scheme that is meant to encourage businesses to invest in productivity and innovation.
Sofian Osman, 43, pleaded guilty to nine charges of committing fraud in representing that several companies had incurred qualifying expenditure, so the firms could obtain cash payouts under the Productivity and Innovation Credit (PIC) Scheme. The offences were committed between 2014 and 2017.
For these charges, cash payouts and bonuses totalling $430,600 were given by the Inland Revenue Authority of Singapore (Iras) to the various claimants as a result of the fraudulent claims.
Sofian, who had another 16 similar charges taken into consideration for sentencing, had committed the offences with an accomplice, Muhammad Iskandar Abd Hakim, who was sentenced in July 2022.
Sofian was jailed for eight months and two weeks and ordered to pay $261,600 in penalties in April for a separate charge related to the same scheme.
Under the PIC Scheme, businesses can convert qualifying expenditure of up to $100,000 into a non-taxable cash payout of a percentage of the expenditure across different qualifying activities per year. The activities include investment in design projects and the acquisition and leasing of certain IT and automation equipment.
An additional cash bonus was also introduced, which allows businesses that invested a minimum of $5,000 per year in qualifying activities to receive a dollar-for-dollar matching cash bonus of up to $15,000.
Sofian, the director or de facto director of four companies – Supreme App, Elegance Systems, Ideal Secretarial & Consultancy Services and 3SI Technologies – was in charge of invoicing and all other finance-related aspects of the companies.
Iskandar was in charge of providing IT services to clients.
Iras senior tax prosecutor Andre Ong said Sofian and Iskandar had jointly conceived the idea to assist claimants to make fraudulent claims with the statutory board.
The duo conspired with the claimants to make these fraudulent claims, even though they knew that none of them had incurred any of the qualifying expenditure stated on their respective forms.
They told the representatives of the claimants that they could obtain IT products for their companies without paying a single cent, and even obtain cash from the Government under the scheme.
If the claimants accepted their offer, either Sofian or Iskandar would deposit cash into the claimants’ bank accounts based on the qualifying expenditure they intended to state on the PIC Scheme form.
They then would instruct the claimants to issue a cheque for the same or similar amount, or arrange for similar payment, payable to them or their companies.
After they did so, Sofian or Iskandar would then encash the cheque into one of their companys’ accounts or withdraw the money to create a false payment trail to show that the qualifying expenditure had been incurred.
The claimants did not actually pay for the PIC Scheme items that they presented as the qualifying expenditure on their forms.
The claimants would then submit the fraudulent forms to Iras to claim the cash payouts or bonuses, or Sofian or Iskandar would do this on their behalf.
When the claimants obtained the successful payouts or bonuses from Iras, they paid a percentage to the two men or their companies.
“This scheme granted the claimants with IT products provided by the companies at essentially zero or near-zero costs,” said Ong, who added that Sofian has not made any restitution.
