When an alert citizen noticed a man making dozens of rapid cash withdrawals at a Plaza Singapura ATM using a thick stack of different bank cards, nobody expected it to unravel a $10.2 million illegal shadow banking network.
Two Indian nationals, Angappan Arivalagan and Durairaj Kulothungan, were sentenced to jail terms in Singapore for operating an unlicensed cross-border remittance service. They systematically siphon money from foreign workers and funnel cash into unregulated overseas transfers.
If you think this was just a simple underground exchange, think again. The case exposes how informal hawala networks exploit migrant workers and why Singapore's financial regulators are cracking down with zero tolerance.
How a Dormitory Driver Built an Illegal Remittance Business
During the pandemic, dormitory living conditions meant restricted movement for thousands of migrant workers. Angappan, who had worked as a driver in Singapore since 2012, saw a lucrative loophole. He offered to withdraw cash from ATMs on behalf of fellow workers and handle their remittances back home to India.
Workers trusted him. They handed over their debit cards and PIN numbers. At first, he used licensed channels like Western Union. But on a trip home to India in early 2023, an acquaintance pitched him a far more lucrative hawala arrangement.
Instead of paying transfer fees to regulated banks, Angappan used the pooled cash to buy high-value goods in Singapore, like gold and laptops. He then handed these electronics and valuables to tourists flying to India, who resold them at a markup across the border to pay out the recipients.
By March 2023, business was booming so fast that he recruited his cousin, Durairaj, to handle the daily cash runs.
The Scale of the Underground Financial Network
Between January and July 2023, the duo moved a staggering sum across more than 60 bank accounts.
- Over $4 million was illegally remitted through 28 bank accounts in the first three months alone.
- An additional $6.1 million flowed through 33 accounts between March and July 2023.
- When police arrested Durairaj red-handed at the mall, they seized 51 ATM cards and nearly $75,000 in physical cash.
The entire scheme crumbled because of one vigilant bystander who reported suspicious activity at an ATM. Once the arrest happened, Angappan panicked and deleted his message logs with customers and co-conspirators, earning him additional scrutiny for attempting to destroy evidence.
Why Singapore Regulators Take Unlicensed Money Transfers So Seriously
You might wonder why operating an unregistered transfer service carries such harsh jail terms if the workers were getting their money sent home.
The truth is simple. Unlicensed remittance operations pose massive systemic risks to global banking systems. Without strict compliance oversight, regulators cannot verify if money moving across borders is tied to money laundering, tax evasion, or organized crime syndicates.
The Payment Services Act in Singapore carries penalties of up to three years in prison and fines reaching $125,000 for operating without a licence. Deputy Public Prosecutors emphasized in court that these offenses are notoriously difficult to track, requiring strong deterrence to keep financial corridors safe.
Angappan received 15 months and three weeks in prison alongside a $6,000 fine. Durairaj was sentenced to eight months and three weeks for his supporting role.
What Migrant Workers and Expats Need to Know
If you send money internationally or handle financial transactions for friends, staying compliant isn't optional.
- Never hand over your ATM card or PIN to anyone. Giving third parties control of your bank account exposes you to severe legal liability under computer misuse laws.
- Verify payment licences before sending money. Only use remittance services approved by local financial regulators like the Monetary Authority of Singapore (MAS).
- Avoid unofficial hawala channels. While illegal networks sometimes offer slightly better exchange rates or lower fees, the risk of losing your funds—or being dragged into a criminal investigation—is sky-high.
Stick to verified financial apps and licensed institutions to ensure your hard-earned cash reaches home safely without putting your legal standing at risk.
