Bentleys, Bitcoin and bungalow karaoke: Crazy rich Asians or red flags?

Aug 25, 2023

THEY rocked up to house viewings in Bentleys and Rolls-Royces, and asked to rent huge bungalows to throw parties in.

Some offered to pay in Bitcoin. Others contacted real estate agents here from remote locations wanting to buy condos with no questions asked.

Five property agents The Business Times (BT) spoke to recounted their experiences serving wealthy foreigners of Chinese origin and pointed out some red flags to watch for, a week after 10 people aged between 31 and 44 were charged with offences including money laundering and forgery.

While they held passports from countries including China, Cambodia and Vanuatu, the accused are said to have originated from Fujian in China.

Lawrence See, a senior district director at Huttons Asia, described how he had a close shave with members of the “Fujian gang” which the 10 allegedly belong to. The property agent’s clients mostly include Singaporean citizens and PRs of Chinese origin.

While marketing a Good Class Bungalow (GCB) in Holland Road last year, he was approached by a client with a “very strong Fujian accent”, who offered to rent the house for S$80,000 per month.

Foreigners are not allowed to buy landed properties in Singapore without approval.

“They will pick many agents to represent them, and week after week, see the same property. One of them will say they want to pay S$80,000 per month, and then the next week, another member will offer S$30,000, until you want to take their S$80,000 (offer).”

While he does not recall if the client was one of the 10 accused persons, See described how members of the “Fujian gang” dressed similarly and had the “same Armani hairstyle”.

“In the end, I didn’t do the deal, because the owner didn’t want to rent,” added See. “They know no one will offer such a price to use the GCB as a clubhouse. If you want to entertain friends, why don’t you go to Sentosa or Tanglin Club?”

Jeffrey Sim, an associate executive director at OrangeTee & Tie, recalled how between 2021 and 2022, he received multiple enquiries from agents representing Chinese clients for GCBs he was selling in Bishopsgate, Cornwall Gardens and Belmont Road.

Sim said: “They offered to pay S$100,000 to S$200,000 rental per month, and for a whole year in advance, and to renovate the house.

“I proposed the terms to my client but in the end, the potential tenants decided they didn’t like the house. At the end of the day, they didn’t take (it).”

He heard from other agents that some of these mainland Chinese clients drank heavily and liked to karaoke together. He shared: “When they come to see houses, they are very young but have Bentleys and Rolls-Royces.”

James Lim, a property agent who specialises in luxury condominiums, said that he had previously received enquiries from Chinese buyers seemingly located in Africa and the Middle East, who found him through his website and social media.

He noted: “They do not reveal their nationalities, but I could tell based on the country code they were using to call. They have Chinese names, or say they are Chinese (in origin). But they refuse to meet up and corresponded only via e-mail.

“And they never ask questions such as the maintenance fees of the condominium and the property tax they must pay, questions legitimate buyers would ask, so the enquiry does not proceed beyond this step.”

BT found that the 10 people arrested had been picking up properties as far back as 2017. According to the Urban Redevelopment Authority’s guidelines for developers on anti-money laundering measures, signs of suspicious buyers could include attempting to pay with a significant amount of cash and without taking any loan.

However, property agents BT spoke to said that paying in cash is not always a red flag.

Henry (not his real name), said: “Many of my clients have offered to pay in cash, but when it comes to the actual transaction, they do take bank loans. Saying they can pay the full sum in cash is their way of trying to show off their wealth, because they want to see the best units.

“A red flag would be when they are not willing to open a bank account in Singapore because of the due diligence checks involved. I’ve had an enquiry before where they offered to pay in Bitcoin. When I said I could introduce a private banker to them, they refused.”

Nonchalance towards the Additional Buyer’s Stamp Duty (ABSD) of 60 per cent for foreigners buying any residential property could also be a warning sign.

Another property agent, Johnny (not his real name), said: “A few years ago, there was a small minority of buyers who would buy two or three units. But not now anymore, when ABSD for foreigners is so high.”

Besides their propensity for multi-million dollar homes, wealthy foreigners of Chinese origin who have nothing to hide have very similar preferences like Singaporeans, agents noted.

Johnny said: “If they are here for the long term, they will consider factors such as the ease of commuting to their workplace and schools nearby.

“For the ultra-rich, they like locations such as Nassim, Tanglin, or Cairnhill. They want the most luxurious locations which are a symbol of their status.

“If the money is hard-earned, they are not going to indiscriminately spend money. They will not buy without viewings and without negotiation.”

Mogul.sg chief research officer Nicholas Mak said that property agents often find such potential clients in WeChat groups where those relocating to Singapore look for primary schools for their children. Agents may also advertise their services on social media platforms such as Douyin and Xiaohongshu, he added.

The ultra-rich remain cautious when they engage the services of property agents in Singapore.

See said: “Only in 10 per cent of the cases, you will be able to have direct access. Unless you know someone close to the buyer, you cannot even enter their circle.

“It’s not that they are guilty, but they are high-profile people and could be worth millions. They value their privacy and don’t want people to talk about them.”

To weed out unsavoury characters, the property agents interviewed conduct anti-money laundering checks which could include looking at the social media profiles of their clients, asking them for bank statements and checking their names against Interpol lists.

See said: “It took more than 400 policemen to catch these people, but we agents only have one pair of eyes and two hands. How are we going to check everything? There may be more cases, we just do not know.”

In response to queries from BT, Justin Quek, deputy chief executive officer of OrangeTee & Tie, said: “In light of the recent happenings, we are in talks with our vendors who provide our AML systems to give updates to all staff and agents on the improving scrutiny of checks and latest initiatives rolled out by them to beef up their systems.”

Eugene Lim, ERA’s key executive officer, pointed out that the agency conducts anti-money laundering workshops for agents to educate them on their compliance obligations.

Lim said: “We also recognise that some real estate agencies may not have access to the infrastructure and training available to our agents… we will be opening up our training programmes to all members of the real estate agency industry.”

Mark Yip, Huttons Asia’s chief executive officer, said: “We remind our agents of the need to conduct checks on customers. Huttons does not accept transactions without a proper anti-money laundering check on customers.”

https://www.businesstimes.com.sg/pro...s-or-red-flags