Quora Answer: Is Your Friend’s Money Deposited into Your Account Yours?

The following is my answer to a Quora question: “If someone has a friend of theirs deposit money in your account so you can hold it for them, is the money technically yours?”

Ownership and possession are not the same thing.  When someone deposits money into your account for safekeeping, you have possession of the funds.  You do not have ownership.  The money remains the beneficial property of the person who deposited it — or, in this scenario, the person on whose behalf it was deposited.  Your account is functioning as a vessel.  You are functioning as a custodian.  The fact that the funds are commingled with your own money, or that your name appears on the account, does not transfer title.  Spending it, investing it, or refusing to return it when demanded does not make it yours.  It makes you a thief.

The Singapore Legal Position

Under Singapore law, the relevant provisions are clear, and the consequences are serious.  Section 403 of the Penal Code 1871 (revised 2020) governs dishonest misappropriation of property.  It provides that whoever dishonestly misappropriates or converts to his own use any movable property — which includes money — shall be punished with imprisonment of up to 2 years, a fine, or both.

Section 405 governs criminal breach of trust — the more serious charge that applies when property is entrusted to a person and that person dishonestly misappropriates it.  The base provision carries imprisonment of up to 7 years, a fine, or both.  Section 409 — criminal breach of trust by an agent, banker, or person in a position of trust — carries imprisonment of up to 15 years and a fine.

The Public Prosecutor decides which charge to prefer based on the circumstances: the quantum involved, the degree of trust reposed, and whether the misappropriation was premeditated.  The Attorney-General’s Chambers does not treat “I thought it was mine” as a persuasive defence.

Case Examples

In 2018, a property agent who received S$35,000 from a client to hold in escrow pending the completion of a property transaction was prosecuted.  The agent spent the money.  When the transaction was completed and the client demanded the return of the funds, the agent could not repay.  He was charged under Section 409 of the Penal Code — criminal breach of trust by an agent — and sentenced to 18 months’ imprisonment.  He did not steal the money in the conventional sense.  He received it legitimately, held it temporarily, and then spent it in the mistaken belief that he would replenish it before anyone noticed.  The court was not interested in his intentions.  It was interested in what he did with money that was not his.

Another consideration is that the arrangement itself may constitute an offence under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992 — commonly referred to as CDSA.  Under the CDSA, it is an offence to assist another person in retaining, controlling, or using the proceeds of criminal conduct — even if you did not commit the underlying offence yourself.  If the money deposited into your account represents the proceeds of crime, your role as custodian — however innocent — may constitute money laundering under Section 44 of the CDSA.  The maximum sentence is 10 years’ imprisonment, a fine of up to S$500,000, or both.

The Monetary Authority of Singapore and the Commercial Affairs Department take an expansive view of what constitutes reasonable grounds for suspicion.  Receiving a large deposit from a third party you do not know, on behalf of someone who cannot or will not explain the source of funds, is the kind of arrangement that triggers Suspicious Transaction Reports.  Your bank may have already filed one.  You would not be notified if it had.

The Practical Conclusion

The money in your account that belongs to someone else is not yours.  This was true before it entered your account; it is true while it sits there, and it will remain true when you are asked to return it.  The legal system has a word for people who forget this: convicted.  If you are holding money for someone else, document the arrangement in writing, keep the funds in a separately identifiable account, and return them promptly when requested.  If the request never comes and the person cannot be located, consult a lawyer before touching the funds.  If someone is asking you to hold money of uncertain provenance for reasons that are vague or implausible, decline.  The convenience fee, if any, is not worth 10 years.  The money is not yours.

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Terence Nunis | Executive Chairman, Equinox Zenith | Author, The 1% Playbook: The Billionaire Cheat Code