Singapore Jails Nine for Bunker Fraud Costing Over $300K
A court in Singapore has convicted and sentenced to jail nine individuals involved in a bunker fraud scheme. According to the authorities, the charges stemmed from a scheme discovered in 2019 that cheated shipowners out of $336,930.63 worth of marine fuel oil while bunkering in the port.
The Maritime and Port Authority of Singapore and the Police Coast Guard discovered the scheme in April 2019 during a routine inspection of a bunker vessel operated by Southernpec. The company, which was ranked as a mid-sized fuel supplier in the world’s largest bunker market, was operating a fleet of bunker vessels.
One of the cargo officers aboard the bunker vessel was discovered to be tampering with the mass flow meter (MFM) during a spot check. The authorities found an industrial strength magnet attached to the meter and in an attempt to conceal it the cargo officer had covered it with duct tape that was the same color as the meter.
The subsequent investigation identified a total of five additional cargo officers working aboard the bunker vessels Southernpec 6 and Southernpec 7 participating in the scheme. Three additional individuals were identified as the masterminds of the scheme having developed the idea of using the magnets. They were charged with organizing and managing the scheme and recruiting the five cargo officers, and one of the cargo officers recruited the sixth who was later caught in the act.
The magnets caused the MFM to registered a high quality of fuel than was delivered to the vessel. After the bunkering operation was completed the cargo officers reportedly texted the mastermind with the amount of fuel that had been “saved.” The authorities reported that the fuel supplier paid the masterminds of the scheme “a sum based on the fuel saved.” The three masterminds shared in the profits and paid the cargo officers a monthly “commission.”
The MPA said that to uphold the integrity of the bunkering process in the Port of Singapore, it had mandated the use of MFMs for the delivery of marine fuel start in 2017. They highlighted that the process provides assurance to both buyers and suppliers on the delivered quantity of the fuel, and enhances transparency in the bunkering process.
The nine individuals, which the authorities called “members of a criminal syndicate” were convicted in 2020 and 2021 for offenses under the Computer Misuse Act. The three masterminds of the scheme were sentenced to between 34 and 35 months each in jail. Five of the cargo officers were each sentenced to between seven and 19 months in jail, while a sixth officer was sentenced to two weeks in jail.
The bunkering company, Southernpec had its bunkering craft operator and bunker supply licenses revoked by the MPA in May 2019. In 2021, Singapore’s High Court granted orders to wind down the business.
“The authorities take a serious view of such criminal activities and will not hesitate to take firm action against those who commit offenses that undermine Singapore’s international reputation as a trusted shipping and bunkering hub, the MPA said in a joint press statement with the Singapore Police Force and the Attorney-General’s Chambers.