Criminal Breach of Trust

Criminal breach of trust or CBT in Singapore is a serious offence. CBT concerns the dishonest misuse or conversion of property or funds in some shape or form.

CBT can be a substantial multi-million-dollar event like the City Harvest Church scandal, where leaders entrusted with church funds misused them and made fake investments to promote the pop career of one of the pastor’s wives.

Equally, CBT can be as simple as selling an inexpensive item loaned to you by a friend. The crime doesn’t depend on the identity or value of the article, but on the relationship between two parties and a breach of trust.

Criminal breach of trust is a crime with a higher level of punishment for those in a position of power. Recent changes to legislation have extended the reach of this offence to include more remote parties like agents, employees, and public servants, with correspondingly harsher penalties.

The definition of criminal breach of trust

In simple terms, Criminal breach of trust is when someone is entrusted with property – tangible goods or money of any value – and uses or dishonestly converts them for their own purposes and personal benefit.

During this process, the person entrusted with the goods or money will either breach the law, or an express or implied term in a contract or agreement. Section 405 of Singapore’s Penal Code contains the exact details of the offence.

CBT is a crime. It has several distinct elements necessary for the offence to be committed and subsequently proven.

Entrustment with property or dominion over property

Entrustment with or dominion over property means a person must be entrusted with general control, supervision over monetary funds, or a tangible asset like a house or car.

Essentially, there must be an express or implied contract or agreement between the person passing the property across and the receiving party. The law can also imply a relationship.

It’s essential to make a distinction about the personal use of property or funds, as this won’t fall within the criteria. An example of this is a genuine gift of money or an item.

Conversely, passing cash, funds, or goods to someone in a professional capacity creates a relationship of entrustment. It almost always constitutes CBT if they use the item or money to serve their own purposes.

The executor of a will is entrusted with funds from the sale of property and other assets in the deceased’s estate to distribute to the beneficiaries in accordance with the terms of the will. If they misappropriate them, steal them, or just fail to pass them on, this is CBT.

A bank manager or investment adviser is given money to handle in a professional capacity and will be guilty of CBT if they use the money to service their own ends.

It’s usually easy to establish a relationship of entrustment if someone has a professional role or status.

Criminal elements of breach

A person entrusted with or given control over property commits an offence under Section 405 of the Penal Code if they:

• Misappropriate the property;
• Convert the property for their own use;
• Use or get rid of the property in breach of a contract or violation of the law;
• Allow a third party to do any of the above.

The person must also have acted dishonestly so they intended to obtain a benefit wrongfully or to dishonestly cause loss to the victim.

Dishonesty can be inferred from the offender’s conduct and the circumstances around the misuse or misappropriation. Knowing the assets or money were intended for a specific purpose and applying them for a different purpose without letting the owner know or consulting them, can be construed as dishonest.

Misappropriation or conversion

Most cases of criminal breach of trust involve misappropriation. In essence, this means using monetary funds or an item of property for another purpose. Conversion is a similar concept.

Violation of a contract or the law

A third party’s duty towards money or tangible assets may be imposed by a contract or a status enshrined in law. For instance, the executor of a will who has a legal role to distribute money and assets in line with the wishes of the deceased.

There are thousands of examples where one person violates a contract and treats someone else’s assets as if they are theirs to use or dispose of as they wish.

When you take your car to the garage for repair or service, the mechanic will commit a criminal breach of trust if they remove parts, sell them for personal gain, or sell the vehicle itself.

What are the sanctions for criminal breach of trust?

Punishments include a fine and/or a prison term of up to seven years. Criminal breach of trust is an arrestable offence and will leave anyone convicted with a criminal record.

For some people convicted of an offence, their criminal record can be treated as spent after a certain amount of time. Effectively, the slate is wiped clean. However, specific criteria will apply, and these include:

• For those given a prison sentence, a term of no longer than three months in jail;
• A fine not greater than S$2,000;
• CBT must be the only criminal conviction on their record; and
• There must be no other spent record on the register.

Offenders with a spent record must remain free of other offences for at least five years. The five-year period runs from the date that sentence was passed if the offender was fined, or the date they were released from prison.

Final thoughts on criminal breach of trust

Cases of criminal breach of trust have been high profile in Singapore over the last few years. This has prompted changes in the law to extend the reach of the offence to public servants and professional agents with stronger sentencing.

People or organisations with valuable assets entrusted to a third party should always take professional legal advice to protect their position and prevent criminal breaches of trust.