Dirty money secrets in PH exposed
WHEN mystery hackers launched a stunning raid on Bangladesh’s foreign reserves, a plot worthy of a John le Carré spy novel was sparked in the Philippines, exposing the Southeast Asian nation as a dirty money haven.
The $81 million stolen from the Bangladesh central bank’s accounts in the Federal Reserve Bank of New York last month was immediately sent via electronic transfer to Rizal Commercial Banking Corp. (RCBC)
in the Philippines, with the thieves deliberately targeting their laundering location.
The Philippines has some of the world’s strictest bank secrecy laws to protect account holders, while its casinos are exempt from rules altogether aimed at preventing money laundering.
“The Philippines is very attractive [for dirty money] because our laws have gaping holes. It’s easy to launder money here,” Sen. Sergio Osmeña III, who is pushing for stronger antimoney laundering laws, told Agence France-Presse (AFP).
Still, if the thieves were to get away with their audacious heist, the money had to be moved quickly through the banking system and into the casinos. And it did. Authorities took four days to order a recall of the money.
Villain or victim
But by then, it had vanished—leaving in its place a tale of death threats, bribes, shady business figures and a bank manager who could be the villain or a victim.
“I did not do anything wrong. If this is a nightmare, I want to wake up now,” Maia Santos-Deguito, manager of the RCBC branch on Jupiter Street, in the Philippines’ financial district of Makati, told ABS-CBN television last week after authorities stopped her at Ninoy Aquino International Airport from trying to leave the country.
“I live every day in fear,” Deguito said.
With authorities in Bangladesh and elsewhere bamboozled over who masterminded the cyberheist, Deguito’s role as manager of the bank branch that accepted and shifted the money has come under intense scrutiny.
Lorenzo Tan
She has accused the RCBC president, Lorenzo Tan, of ordering her to move the money. He has fiercely denied the accusations.
Senators who launched an inquiry last week into the heist are yet to determine whether she was a scapegoat or not, but are convinced she was not the mastermind.
“It’s a big operation. This could not have been done out of the Philippines alone,” Sen. Ralph Recto said.
The Senate blue ribbon committee inquiry and another probe by the Philippines’ AntiMoney Laundering Council (AMLC) have hit several major hurdles, including a security camera at the bank not working when the money was shifted.
Accusations and counteraccusations between Deguito and the RCBC management have further confused investigators.
‘Money trail’
A final roadblock has emerged at the casinos, with the money apparently vanishing in mountains of gambling chips and mysterious middlemen.
“Our money trail ended at the casinos,” Julia Bacay-Abad, deputy director of the AMLC, told the Senate investigators last Tuesday.
On Feb. 5, the same day Bangladesh Bank was hacked, the money was sent electronically to four accounts in Deguito’s RCBC branch, according to testimony to the Senate inquiry.
Those accounts appeared to have been set up solely for that purpose because they were done using aliases, the Senate inquiry heard.
After that, the bulk of the money was transferred into accounts of a Chinese-Filipino businessmen, William Go, who has since protested his innocence. He said his signature was forged to set up the accounts.
Philrem connection
From there, the money was briefly held by Philrem, a foreign exchange brokerage.
Philrem president Salud Bautista told the Senate inquiry that $30 million went to a man named Weikang Xu. He was described as a casino junket operator, but senators have said they know little more about him other than he is of Chinese origin.
The AMLC said another $29 million ended up in Solaire, a casino on a glittering Manila bayside strip that the Philippines hopes will become one of the world’s biggest gambling destinations.
That money was exchanged into chips but could only be turned back into cash after being played in the casino, its management told the Senate inquiry.
Another $21 million was sent to Eastern Hawaii Leisure, which runs a sparsely furnished casino with Chinese-only television in Santa Ana, a sleepy town in Cagayan province, in the far northern Philippines, according to the AMLC.
Tip of iceberg
Osmeña said the case was likely just the tip of the iceberg.
“This could have happened hundreds of times already,” he said. “We discovered this one only because someone complained. But normally, if a drug dealer from Burma (Myanmar) or China would send money here, no one would complain.”