The first foreigner was recently convicted in the 1MDB scandal. According to reports, Jens Sturzenegger, a former branch manager at Falcon Private Bank Ltd. in Singapore, pled guilty to six charges, including failing to report suspicious transactions and was sentenced to 28 weeks in jail and fined $89,000. His lawyer announced Sturzenegger would not appeal the sentence. While Sturzenegger was the first non-Singaporean to be convicted, there were three prior convictions of other Singapore bankers who were involved with the 1MDB scandal.

The conviction continues Singapore’s aggressive response to the 1MDB scandal as the funneling of much of the 1MDB money through the Singaporean banking system has put a black eye on a country which prides itself one doing banking in compliance with relevant laws. Sturzenegger was involved with several suspicious transactions including a transfer of $378MM to account controlled by a key figure in the scandal, Mr. Jho Low. Another transaction was used to purchase some $130MM in art work.

Yet the Singaporean response has been more than robust enforcement. One of the key elements they have required from the financial institutions is an increase in compliance around anti-money laundering regimes and increased reporting of suspicious transactions. For the long-term health of the Singaporean and greater international banking system, these advancements are critical. The 1MDB scandal could not have occurred without the participation if not acquiescence of banking officials. This crackdown by Singaporean officials drives home the key point that it is not the regulators who are on the front line of defense against such illegal activity but banks.

The idea that businesses are a key tool in the fight against the scourge of worldwide corruption is also an idea that has been taking hold. It is not simply regulatory enforcement by the U.S. Justice Department or U.K. Serious Fraud Office which drives this fight but companies doing business in compliance and not paying bribes or engaging in corruption.

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