SIA case - Teo Cheng Kiat

This trusted Singapore Airlines employee of over 25 years,Teo Cheng Kiat, stole almost $35 million from his employer over a period of 13 years. His method of fraud was to prepare unearned pay allowances for the airline's cabin crew which he then banked into his own bank account. He added extra random names to the names of cabin crew listed for a particular flight. He then changed the bank accounts numbers in the computer system for these crew so that the bank accounts receiving payment were those controlled by him. He used his wife and her sister to set up additional bank accounts for his fraud.

His mistake was revealed when an internal auditor noticed that some recipient accounts received several payments in 1 day when the normal practice was to pay only once a day.

For one of the biggest employee frauds in Singapore history, Teo was sentenced to 24 years in jail. The normal prison practice is that prisoners can get a 1/3 discount from their sentences for good behaviour so he could be out after 16 years when he will be about 65 years old.

Some mistakes of SIA -

• not having strong internal controls of its payment system
• not having random checks of transactions
• not carrying out regular investigations of its staff