Criminal breach of trust (CBT) is a serious offence in Singapore. A person found guilty of CBT can be sentenced to up to 20 years imprisonment, a fine or both. Several high-profile CBT cases led to the introduction of amendments to the Penal Code in January 2020.
To many ordinary citizens, the term criminal breach of trust is complicated or vague. What does it mean? In simple terms, it refers to the misappropriation (theft) of funds or property and includes a wide range of activities.
How does the Penal Code define Criminal Breach of Trust?
Section 405 states that a person commits CBT when they:
- dishonestly misappropriate property or funds that were entrusted to them, or over which they have dominion; or
- converts such property for their own use; or
- dishonestly uses or disposes of such property in violation of any express or implied contract or law prescribing the mode in which such trust should be discharged; or
- intentionally allows any other person to do so.
This is a mouthful to digest. Let’s look at a few examples to explain.
Person B entrusts his household contents to Person A, a warehouse owner, whilst B goes overseas for a few months. The contract stipulates that A will keep the goods safely for a specified sum and return it to B on his return. A then dishonestly sells the goods.
Person C is employed as a financial advisor at a company. He receives cash payments from a client. Instead of handing the money to the company, he uses the money to pay his debts.
The examples illustrate that there are always certain elements when dealing with Criminal Breach of Trust.
- A person is entrusted with property or given control over it.
- The person then acts dishonestly by:
- misappropriating the property or funds; or
- converts the property or funds for their own use; or
- uses or disposes of the property in violation of a contract or law; or
- intentionally allows someone else to do any of the above.
For the prosecution to succeed with a charge of CBT, each of these elements must be addressed.
Elements of CBT
The element of entrustment implies that the individual does not receive the property or funds for their use or purposes. They are given the goods to supervise or have control over it or to deal with it in a specific way expressed or implied in a contract or specific law.
For example, an investment manager receives funds to invest on behalf of someone else. A transportation company receives goods to transport, or an executor gets control over a deceased’s estate to distribute the assets according to the will.
Dishonesty – intention
To be found guilty of CBT, the individual must have acted dishonestly. The Penal Code defines “dishonesty” as acting with intent to wrongfully benefit themselves or someone else or causing a wrongful loss to the victim.
If the person acted negligently or made an honest mistake, it will not constitute CBT. For example, A instructs B to invest a certain sum of money for A in Company Z. B honestly believes that A can make more money by investing in Company Y. B acted in good faith. Although A can bring a civil lawsuit against B if he suffers losses, B will not be guilty of CBT since he did not act dishonestly.
The court has held that dishonesty need not be directly proven; it can be inferred from the circumstances. The Act refers to dishonesty by “ordinary standards of reasonable and honest persons”.
Misappropriation or conversion
Misappropriation or conversion are very similar, and often one Act can be dealt with as either conversion or misappropriation. Most cases of CBT are dealt with as misappropriation of property.
Misappropriation refers to cases where entrusted money (or property) intended for another purpose is pocketed for own use. For example, a salesperson uses a customer’s money to pay for his personal holiday instead of giving it to the company. It can also refer to situations where the money is set aside for the wrong person or wrong use.
Conversion involves using someone else’s property as if it were your own. For example, a property rental agent is entrusted to rent out a residential apartment for a client. The agent then dishonestly allows a friend to run a business from the apartment and pockets the monthly rental for himself.
Violating a law or contract
Entrustment is either captured in a contract or the law applicable to a specific role. For example, an executor of a will has a legal duty to act in accordance with the will and distribute the assets accordingly. If they keep some money for themselves, they are violating the law.
Likewise, if you sign a contract with someone to store your property and that person sells it to someone else and takes the money, they are in breach of the contract and guilty of CBT. The contract can be expressed or implied.
Allowing someone else
You can be guilty of CBT, even if you don’t misuse the money or property yourself but deliberately allow a friend to dishonestly misuse the money. Your friend can be charged with aiding and abetting you in committing the crime of CBT.
Punishment for criminal breach of trust
A person convicted of general criminal breach of trust under sec 405 can be sentenced to imprisonment for a maximum of 7 years, or a fine or both.
The Penal Code stipulates three situations regarded as aggravated criminal breach of trust, and the penalties are more severe.
- Sec 407 – Criminal breach of trust concerning property entrusted for purposes of transport or storage
If you are entrusted with property for transportation, for hire, or storage for rent or charge (the warehouse owner above), and you commit criminal breach of trust, the penalty can be imprisonment of up to 15 years and a fine.
- Sec 408 – Criminal breach of trust by employees
If you are entrusted as an employee with property or with control over property, and you commit CBT in respect of that property, the punishment can be imprisonment of up to 15 years and a fine. This also applies to anyone who acts in the capacity of an employee.
- Sec 409 – Criminal breach of trust by public servants, bankers, merchants, agents, directors, officers, partners, key executives, or fiduciary
This section includes brokers, attorneys, directors of corporations, people providing agency services, executors and others entrusted with property in their professional capacity. Anyone entrusted with property in their particular capacity or position who commits a criminal breach of trust can be punished with imprisonment of up to 20 years and a fine.
Trust can be expressed or implied by law. The more severe penalties are meant as a deterrent for people in positions of trust.
What will the court consider when imposing a sentence for CBT?
Besides considering whether your Criminal Breach of Trust is a form of aggravated criminal breach of trust, the court will consider various factors when deciding on a suitable sentence. Factors include the following:
- The value of the entrusted property.
- The duration of the offence.
- The impact of the breach of trust on the victim or the general public.
- Any restitution or lack of restitution offered to the victim by the offender.
- The offender’s position and the degree of trust bestowed on the offender.
- The accused’s motivation.
- Cooperation with the police.
- The offender’s gain from committing the offence, if any.
- Remorse and other personal circumstances.
What happens if you are under suspicion of a criminal breach of trust?
Criminal breach of trust is an arrestable offence in Singapore. That means the police can arrest you without a warrant if they reasonably suspect you of committing CBT. It is then up to the police or the court to decide if you will be released on bail.
If convicted, you will have a criminal record.
However, after a certain period, you may be able to have your record wiped clean if you meet specific criteria:
- If you were sent to prison, the imprisonment term but be less than 3 months.
- If you were given a fine, the fine must be less than $2,000.
- You cannot have any other criminal convictions.
- You cannot have any other previous spent records.
If you meet these criteria AND you remain crime-free for at least 5 years, your record will be spent.
Criminal breach of trust is a serious offence with harsh penalties. If you face a charge of CBT, you should speak to a criminal defence lawyer as soon as possible to discuss your options.
An experienced lawyer will be able to assist you in achieving the best possible outcome for your case.