MACC reveals tricks corrupt masterminds use to avoid detection

A top MACC officer says they have in the past recovered millions of ringgit hidden in car boots of businessmen who prefer to use cash for transactions. (Bloomberg pic)

KUALA LUMPUR: The anti-graft agency today shared its challenges in pinning down corrupt masterminds, including the tricks they use to avoid arrest.

It includes channelling money to mistresses and girlfriends to keep, acting as if they are very pious, dishing out handsome donations to staff who face any mishaps to win their loyalty, holding hard cash and even registering their handphones to the names of foreign workers.

Mohamad Faizal Sadri, the deputy director of Anti-Money Laundering and Forfeiture of Properties Division (AMLFOP) of the Malaysian Anti-Corruption Commission (MACC), said criminal masterminds would often stash hard cash in their homes and even in their car boots to avoid a paper trail.

This made it difficult for enforcers to conclusively prove guilt, he said at a forum on “Unmasking the corrupt through beneficial ownership transparency”, organised by Transparency International Malaysia and Malaysia Reform Initiative (Mari).

That is why, he said, the Beneficial Ownership Transparency framework, to be implemented in 2020 and which would allow anyone to know the real owners of a company, was a move in the right direction.

Beneficial ownership refers to cases where individuals invest in, control, or reap gains from an asset, such as a bank account, real estate, company, or trust, but who are not listed publicly as the legal owners.

Faizal said for enforcers to detect the masterminds, they needed an updated and accurate register of a company’s owners.

He said at the moment, they were unable to “interrogate” such people as it was considered harsh.

“We don’t even use the word ‘suspect’. So we give them a cup of coffee and ask them whether they would like to volunteer information on who is behind the company,” he said.

However, by this time, he said, they would request for a lawyer.

He said the masterminds were getting smarter by registering their cells phones to the names of foreign workers to make detection harder.

They also channelled their money to their “girlfriends” or mistresses, instead of their wife, to avoid being linked to the money trail, he added.

As it is easy to check the movement of money, with financial institutions required to disclose such information to enforcers, most culprits use hard cash to escape the eyes of law.

He said masterminds did not use online payments or the bank. “They use cash. Sometimes they buy cars just to hide the cash in the boot,” adding that officers have recovered millions of ringgit hidden in car boots in the past.

Faizal said even if the enforcers nabbed the mastermind, “we are only arresting the person, not seizing his assets”.

He said after a year or two, the person would be released, and he would go back to his old ways and his businesses would expand with the help of his lawyers, auditors and accountants.

That is why, he said, the Companies Commission of Malaysia (SSM) needed to push for laws to ensure every layer of ownership was registered. “And this information about owners has to be accurate.”

Earlier, SSM’s Norhaiza Jemon had said beginning next year, companies must disclose their actual owners under new laws to address the problem of illegal businesses and shell companies.

She had said those who failed to disclose the information would be fined RM50,000.

But she acknowledged that the real challenge would be whether this information given was accurate.