Sabalones ‘uses properties as front for his drug trade’

Anti-Money Laundering Council (AMLC) investigators said that self-confessed drug lord Franz Cabilao Sabalones established Paulo Luna Beach Resort as one of his legal business fronts to conceal his illegal activities.

Their financial analysis proved there was a “disconnect” between Sabalones’s spending behavior and his income, and he was also involved in money laundering, not just in illegal drug trade.

Sabalones, himself, admitted in an affidavit that his properties were fruits of his involvement in drug trafficking.

Investigators learned that he used his drug proceeds to pay law enforcers and acquire properties.

Paulo Luna, which sits on a 3,204 square-meter property in North Poblacion, San Fernando, was Sabalones’s first declared venture. It was registered with the Department of Trade and Industry on Oct. 30, 2012.

Investigators, however, noticed discrepancies. Eighteen months before the resort was registered, Sabalones had no declared source of income.

Sabalones, even if he was unemployed, made bank transactions ranging from P519,370 to P8 million from April 19, 2011 to Sept. 11, 2012.

“The business registration of the beach resort business (made 18 months after the substantial transactions were recorded) appeared to be an ‘afterthought’ to conceal the illicit source of the funds,” the AMLC findings read.

Investigators further said the resort’s declared annual gross receipts of P3 million to P6 million “alone is overwhelmingly insufficient to justify his bank transactions from Dec. 7, 2012 until Jan. 22, 2013, considering that the business is still at its ‘infancy’ stage and he declared no other legitimate source of funds.”

Sabalones deposited P1.1 million on Dec. 7, 2012; P1 million on Dec. 17, 2012; and P850,000 on Jan. 22, 2013.

“Taking into account the resort’s unexceptional location, monotonous amenities, average published rates, seasonal occupancy and high maintenance costs, it cannot possibly generate the amount of money transacted during the said period,” the findings read.

Paulo Luna also has gym equipment that are 15 years old and are no “longer at par with acceptable standards.” There are other resorts near it.

It further said, “It is highly improbable for Franz Sabalones to immediately recover his initial capital outlay for the beach resort within a span of two years—a longer payback period is usually expected.”

The alleged drug lord’s other businesses, namely the SFC Franzene Trading and FCS Poultry Farm, reportedly managed to have bank transactions ranging from P500,250 to P20 million from Feb. 26, 2013 to Nov. 28, 2014.

He fully paid a three-hectare prime vacant lot for P20 million on Feb. 3, 2016.

After Sabalones surrendered to Police Director General Ronald dela Rosa in August last year, investigators learned Paulo Luna has now a low occupancy rate and is currently mortgaged with a private bank.

It is highly improbable for Franz Sabalones to immediately recover his initial capital outlay for the beach resort within a span of two years AMLC INVESTIGATORS