Singapore police last month arrested 10 foreign nationals – aged between 31 and 44 – and raided residences, seizing luxury items including Hermes handbags, Patek Philippe watches, aged Macallan whisky, and Bentley and Rolls-Royce cars.

The suspects are all originally from Fujian in eastern China but include Cypriot, Turkish, Cambodian and Vanuatuan passport holders.

The Singapore Police Force has alleged the seized assets are the ill-gotten gains of organised crime committed overseas, including scams and online gambling, whose proceeds were brought into Singapore and filtered through the country’s financial institutions.

The case has cast a spotlight on Singapore’s reputation as a well-run, low-crime financial hub, or a “Switzerland of the East”.

It is also unwelcome news for Singapore’s ruling party, which has been rocked by a string of rare political scandals in the past few months, including a corruption probe involving the transport minister.

For would-be money launderers, the Southeast Asian city-state can be an attractive option due to its status as a major financial hub that offers an array of financial instruments, according to analysts.

“The large volumes of financial transactions that flow through our borders can make it harder for regulators to sift out illicit transactions,” Woo Jun Jie, a senior research fellow at the Institute of Policy Studies at the National University of Singapore (NUS), told Al Jazeera.

Money laundering can be conducted through various channels, from real estate and cryptocurrency to casinos and listed companies.

Mak Yuen Teen, a corporate governance expert at the NUS Business School, said money laundering cases often involve entities in the British Virgin Islands and other tax haven jurisdictions, where the ultimate beneficial owners are not disclosed.

“My worry is that the rabbit hole goes really deep and wide,” Mak told Al Jazeera.

Eugene Tan, an associate law professor at Singapore Management University (SMU), said the city-state is attractive to money launderers because funds are less likely to be regarded with suspicion once they enter the financial system there.

This is due to “our reputation of being a trusted financial hub with strict laws and tough enforcement,” Tan told Al Jazeera.

In the same way, drug traffickers are prepared to transit in Singapore as third countries are less likely to treat passengers coming from Singapore with heightened suspicion given the country’s ultra-strict drug laws, Tan said.

“Money launderers are willing to take a punt because the benefits of being able to launder the money here makes it easier to move the funds to other jurisdictions like the UK and the EU, rather than laundering the money in those jurisdictions,” he said.

The image of Singapore as a “playground for the rich” may also add to the perception that its rules are lax, said Tan.

He said that although he is not aware of gaping loopholes in enforcement, “downstream checks appear to be lax” once the funds are in Singapore’s financial system.

Tan said he has heard of cases where banks have accepted financial in-flows, even if suspicious transaction reports are filed.

“In other words, some banks see this as shifting the burden to the authorities,” he said. Where the authorities do not do anything, some banks are prepared to accept the funds in question, he added.

The NUS’s Mak said the latest case has shone a spotlight on what responsibility, if any, belongs to other links in the money laundering chain, such as property developers, luxury car dealers, golf and country clubs, luxury watch dealers and intermediaries such as real estate agents, accountants and lawyers.

The Council for Estate Agencies (CEA), which regulates Singapore’s real estate industry, has said it is investigating property agents who might have facilitated property transactions related to the case.

Mak said that much of the responsibility is placed on banks, which have extensive know-your-customer due diligence policies and suspicious-transactions reporting obligations, but these may not be effective.

“Where there are breaches, the penalties imposed are generally quite low and there is no little accountability for those in the board and senior management. This may encourage a culture that puts profits before ethics and compliance,” Mak said.

“As a country, are we focused more on GDP growth and increasing per capita income rather than doing the right thing? Are our regulatory bodies focused more on market development than regulation and enforcement?” he added.

In the property sector, stories of newly-arrived foreigners with suitcases full of cash abound, including cases of renters paying lease down payments upfront in cash despite the fact they do not have a work or residence visa.

In recent years, Singapore has celebrated its successes in luring the well-heeled to put down roots in the city-state.

The number of single-family offices has nearly doubled since the end of 2020, from 400 to about 700, according to the Economic Development Board (EDB).

Wealthy foreigners have also been drawn by the Global Investors Programme, which grants a fast-track to permanent residency to investors, though the scheme recently put stricter requirements in place.

Ku Swee Yong, a director at the real estate consulting firm International Property Advisor, suggested that the authorities’ push to attract the super-rich could have resulted in “all and sundry to come in”.

“Because Singapore’s image has been built very well over the last five decades, people may see this money laundering case as a one-off instead of dealing with what could be a broader, system-wide issue,” Ku told Al Jazeera.

Whether money laundering has been “flying below the radar for years” and the latest case is indicative of systemic issues remains to be seen, said Anton Moiseienko, a law lecturer at the Australian National University who studies transnational and economic crime.

“Cases like this are a litmus test to see if the Singapore government has the ability to go after high-level, sophisticated operations. It’s also a chance to go to the drawing board and learn lessons…” Moiseienko told Al Jazeera.

“You don’t want cases to keep recurring and for Singapore to be a magnet for dirty money.”

The Monetary Authority of Singapore has been developing a digital platform, COSMIC, to allow financial institutions to securely share information on customers who exhibit multiple “red flags” that may indicate potential financial crimes.

New rules in June also mandated due diligence checks by property developers on potential buyers and reports on any suspicious practices.

Victoria Ting, the associate director at Setia Law and a former prosecutor, said that while it is too early to tell which stakeholders may be involved in the latest case, Singapore’s regulatory framework is robust.

Singapore has a “high level of adherence” to the Financial Action Task Force standards and ranks highly in various independent anti-money laundering indexes, Ting told Al Jazeera.

In the Basel AML Index 2022, which assesses the risk of money laundering and terrorist financing, Singapore ranks 100 out of 128  – where 128 is the lowest risk – ahead of other financial hubs like Dubai and Hong Kong.

Setia Law’s Ting said the current case highlights the effectiveness of Singapore’s authorities and its suspicious reporting transaction system.

“To pull off a raid of this scale, with a considerable degree of success both in terms of persons apprehended and assets seized, demonstrates the competence and sophistication of law enforcement here,” Ting said.

Singapore’s authorities have “historically” shown a firm stance against non-compliant entities, she said.

Singapore has been previously embroiled in a number of financial scandals in which banks have been fined and individuals handed prison terms.

Following the 1 Malaysia Development Board (1MDB) scandal, MAS shut down the local branch of Switzerland-based BSI Bank over gross misconduct, while former BSI banker Yeo Jiawei was sentenced to 54 months imprisonment for various offences, including money laundering.

The SMU’s Tan said such scandals had undoubtedly tarnished the city-state’s image.

“The reality is that the scale of the transgressions have made Singaporeans wonder whether this is just the tip of the iceberg… As investigations continue, there will be more troubling news,” he said.

Mak said the case had exposed flaws in the system and authorities needed to ensure that those caught pay a heavy price.

“The world will be watching how we deal with this,” he said.