In March 2023, a 57-year-old man appeared in Court for his suspected involvement in a case of criminal breach of trust (CBT) amounting to at least $2.3 million. Between 2016 and 2021, the victim handed over large sums of money to the man to pay for house construction, issuing cheques totalling at least $8 million.
However, the construction works stopped in 2021, and the victim suspected the man had misappropriated the funds, leading to a police report.
CBT is a serious crime in Singapore with severe consequences. Depending on the degree of the offence, a person found guilty can be sentenced to up to 20 years in jail, fined, or both.
But what constitutes CBT can sometimes be difficult to understand, especially with the amendments to the Singapore Penal Code which came into effect on 1 January 2020.
This article aims to help you better understand what does and does not constitute CBT under Singapore law, and offers advice on what to do should you find yourself being accused of CBT.
What is Criminal Breach Of Trust (CBT)?
Criminal breach of trust (CBT) in Singapore is governed by Sections 405 to 409 of the Penal Code. It refers to the dishonest misuse of property or funds by someone who has been entrusted with them. Section 405 of the Penal Code outlines that a person commits CBT when they:
- Dishonestly misappropriated property or funds that were entrusted to them, or over which they have control;
- Convert such property for their own use;
- Dishonestly use or dispose of the property in violation of a contract or law; or
- Intentionally allow someone else to do so.
For instance, if someone is entrusted with property for safekeeping, like a warehouse owner holding goods for a customer, and they dishonestly sell those goods, this would be CBT.
Another example would be a financial advisor who receives client payments but uses the funds to settle their own debts instead of passing them to their employer.
CBT cases always involve the same basic elements: an entrusted individual misuses or allows someone else to misuse the property. For the prosecution to succeed in a CBT case, these elements must be proven.
What Are The 5 Elements Of CBT?
For a charge of criminal breach of trust to be successful, specific legal elements must be proven under Singapore law. These are outlined in Section 405 of the Penal Code and focus on the misuse of property by a person entrusted with it.
#1. Entrustment
Entrustment is a key element of CBT. It means that the individual received property or funds not for their own use, but to manage, control, or deal with it according to a specific law or contract. The person does not have ownership rights, only a duty to act in accordance with the terms under which they were given the property.
For example, an investment manager who is tasked with handling a client’s funds or a courier who delivers goods are people entrusted with property. In a CBT case, the focus is on whether the person was entrusted with the property, rather than the identity of the person who entrusted them.
In a notable case, Raj Kumar Brisa Besnath was convicted of CBT after misappropriating $81,000 that he was supposed to deliver to a person believed to be part of an overseas scam.
Even though the true identity of the person who entrusted the money remained unknown, the Court found that Raj Kumar had been entrusted with the funds, leading to his 13-month sentence in 2021.
#2. Dishonesty
To be found guilty of criminal breach of trust (CBT), the person must have acted dishonestly.
Under Singapore’s Penal Code, “dishonesty” means acting with the intent to wrongfully benefit oneself or someone else, or to cause a wrongful loss to the victim. Simply being negligent or making an honest mistake does not count as dishonesty.
For example, if someone is instructed to invest money in a specific company but, believing in good faith that another company offers better returns, invests elsewhere, they are not guilty of CBT. Although the person might be sued in civil court for losses, their good faith decision means they did not act dishonestly.
Dishonesty can be inferred from the circumstances rather than needing direct proof. In a 2018 case, Ong Kim Hock, founder of Focal Marine, cashed a company cheque for $110,000 into his own account, claiming it was to pay off company debts.
However, the Court ruled that he was acting dishonestly to ease his own financial burden, as the company struggled to pay its suppliers. Ong was sentenced to 14 months in jail for CBT.
#3. Misappropriation Or Conversion
Misappropriation and conversion both refer to dishonestly dealing with property, though they have slight differences. Most CBT cases in Singapore involve the misappropriation of property.
Misappropriation happens when a person wrongfully takes money or property that was intended for another purpose and uses it for their own benefit. For instance, a salesperson who uses a customer’s payment for personal expenses, like a holiday, instead of giving it to their company, has committed misappropriation.
Conversion, on the other hand, involves using someone else’s property as if it were your own. An example would be a rental agent who allows a friend to use a client’s property for personal business and keeps the rent for themselves.
An example of both misappropriation and conversion occurred in 2023 when Mr Gng Hoon Hong, a former representative of Prudential Assurance Company Singapore, misappropriated S$117,160.94 that was entrusted to him for paying a client’s insurance premiums.
Instead of passing the money to the insurance company, Mr Gng used it for personal expenses, such as home renovations and groceries. He was sentenced to 20 months in jail.
In many cases, conversion and misappropriation overlap, as both involve wrongful handling of property for personal gain.
#4. Violation Of Law/Contract
When a person is entrusted with property or funds, their role often comes with legal or contractual duties. If they violate these duties, they may be guilty of criminal breach of trust (CBT).
For instance, an executor of a will has a legal duty to distribute the assets as outlined in the will. If the executor keeps some of the money for themselves, they are violating the law and may be charged with CBT.
Similarly, if a lawyer is entrusted with distributing a deceased’s estate and fails to follow the instructions in the will, they would be liable for CBT.
Contracts can also impose duties. For example, if a warehouse owner signs a contract to store goods for a client but dishonestly sells those goods to make a quick profit, they are in violation of the contract and could be guilty of CBT. These duties can be either explicitly stated or implied within the contract.
#5. Allowing Someone Else To Misuse Property
You can be found guilty of CBT even if you did not misuse the property yourself but knowingly allowed someone else to misuse it. If you have been entrusted with property and deliberately allow another person to use it dishonestly, you are still responsible under CBT laws.
For instance, if you are in charge of managing company funds and you allow a friend to misuse those funds for personal expenses, you would be liable for CBT. Your friend would also face charges for abetting you in committing the crime.
In this way, both the person who allows the misuse and the person who actually misuses the property can be held accountable for CBT under Singapore law.
Punishment For Criminal Breach Of Trust
In Singapore, criminal breach of trust (CBT) is treated as a serious offence with severe penalties. The general punishment for a person convicted of CBT under Section 406 of the Penal Code can include imprisonment for up to 7 years, a fine, or both.
However, the penalties increase in cases where the offender holds a position of special responsibility or trust.
The law provides for aggravated CBT under three specific situations:
- Section 407 – If the offence involves property entrusted for transport or storage, such as by a warehouse owner or a transportation provider, the punishment can be imprisonment for up to 15 years and a fine.
- Section 408 – This section applies to employees who commit CBT with property entrusted to them as part of their job. If convicted under section 408 of the Penal Code, the offender can face up to 15 years in jail and a fine. This provision covers anyone acting in the capacity of an employee.
- Section 409 – The most severe punishment is reserved for public servants, bankers, merchants, agents, company directors, officers, partners, and other fiduciaries. If someone in these positions is convicted of CBT, they can be imprisoned for up to 20 years and fined.
This reflects the high level of trust placed on individuals in these roles and the expectation that they will act in the best interests of those who have entrusted them with property or funds.
The penalties for CBT under Singapore law are designed not only to punish offenders but also to deter individuals in positions of trust from abusing their responsibilities.
The more severe punishments under Section 409 of the Penal Code are a clear signal that violations of trust, particularly in professional and fiduciary capacities, are taken very seriously in Singapore.
Factors To Consider When Imposing A Sentence For CBT
When determining the sentence for someone convicted of CBT in Singapore, the Court takes into account several factors. These factors help the judge decide on a fair punishment based on the specific circumstances of the case. Some of the key factors include:
- The Value of the Entrusted Property: The higher the value of the misappropriated property or funds, the more severe the sentence is likely to be. Significant sums of money or valuable assets often result in harsher penalties.
- The Duration of the Offence: If the CBT was committed over a prolonged period, it could indicate a higher level of dishonesty and planning, leading to a tougher sentence.
- Impact on the Victim or General Public: The harm caused by the breach of trust is an important consideration. A significant financial loss or harm to a larger group of people, such as a company or the general public, can lead to a stricter sentence.
- Restitution: Whether the offender has made any effort to return the stolen property or compensate the victim can influence the sentencing. Offering restitution may show remorse and result in a more lenient sentence.
- Position and Degree of Trust: The more responsibility and trust the offender had in their position, the more serious the offence. This is particularly relevant for cases involving public servants, company directors, or fiduciaries who hold high levels of authority.
- Motivation for the Offence: The Court will consider why the offender committed the CBT. If the offender was motivated by personal gain, the sentence may be more severe than if the offence was committed due to pressure or desperation.
- Cooperation with the Police: Offenders who fully cooperate with police investigations or plead guilty may receive a lighter sentence as it shows remorse and a willingness to rectify the situation.
- Remorse and Personal Circumstances: The Court will also consider any evidence of genuine remorse and personal circumstances that may have contributed to the offender’s actions. For example, health issues, family obligations, or financial difficulties may be taken into account.
Conclusion About The Criminal Breach Of Trust In Singapore
If you have been accused of CBT, it is important that you work closely with your lawyer to decide on how to plead. Even after conviction, it is possible to appeal for a lighter sentence if you show remorse and that you are willing to take corrective action.
At Tembusu Law, our team of criminal lawyers in Singapore are widely experienced and comprehensively trained in handling CBT cases, and will always work to protect and safeguard your best interests.
In addition, our divorce lawyers in Singapore specialise in helping clients navigate complex family matters with compassion and expertise.
Get in touch with our criminal defence lawyers today to discuss how we can help you with your defence.
Frequently Asked Questions About The Criminal Breach Of Trust In Singapore
Does Criminal Breach Of Trust Carry A Minimum Sentence In Singapore?
No, criminal breach of trust does not carry a mandatory minimum sentence. The sentence can range depending on the severity of the crime and the circumstances, with a maximum penalty of up to 20 years in prison, a fine, or both, depending on the offender’s position and the level of trust involved.
Is Criminal Breach Of Trust An Arrestable Offence In Singapore?
Yes, all forms of criminal breach of trust (CBT) are considered arrestable offences. This means that the police can arrest a suspect without needing a warrant.
For example, if a company suspects an employee of CBT after an audit reveals financial discrepancies, the employee can be arrested without a warrant and potentially held for further investigation.
When Does Criminal Breach Of Trust Apply To Corporate Roles In Singapore?
Criminal breach of trust can apply to corporate roles when individuals such as directors, officers, or financial managers misuse or misappropriate company assets or funds entrusted to them. This includes situations where employees or executives dishonestly handle company property or resources for personal gain.
Will Criminal Breach Of Trust Result In A Criminal Record?
Yes, if you are convicted of criminal breach of trust in Singapore, you will have a criminal record. However, after meeting specific conditions, you may have the opportunity to have your criminal record treated as “spent” after five crime-free years, allowing you to declare that you do not have a criminal record.
