BB fund heist: 2 Chinese traders sued in Philippines

The Anti-Money Laundering Council (AMLC) yeterday filed a criminal complaint against two Chinese businessmen allegedly involved in the laundering through the Philippine financial system of $81 million stolen by mysterious computer hackers from the central bank of Bangladesh last month.

In a complaint filed in the Department of Justice (DOJ), the AMLC accused Chinese casino junket operator Xu Weikang and Cagayan-based restaurateur Kam Sin Wong, also known as Kim Wong, of money laundering, after tracing to their personal accounts the money stolen from the Bangladesh Bank's accounts in the Federal Reserve Bank of New York.

An AMLC investigation found that the money was wired to four accounts under fictitious names in the Rizal Commercial Banking Corp. (RCBC) branch on Jupiter Street, Makati City.

The accounts, opened on May 15, 2015, on Wong's referral to branch manager Maia Santos-Deguito, saw activity only last month, when the accounts were virtually emptied and fanned out to several banks.

Deguito firedRCBC fired Deguito and her deputy, Angela Torres, Tuesday.

"Other branch and bank officials are expected to be meted out various sanctions ranging from termination to suspension in the coming days when the internal investigation is expected to be completed," the bank said in a statement issued by RCBC head of legal and regulatory affairs Maria Cecilla Fernandez-Estavillo.

RCBC said Deguito and Torres broke the rules and facilitated the laundering of the money stolen from Bangladesh Bank.

"Appropriate charges will be filed in court against Deguito and Torres by next week," Estavillo said.

The AMLC, in its nine-page complaint, said "all elements [of money laundering] are present in this case," scoring Xu and Wong for taking the money while aware that the funds were "proceeds of unlawful activities."

Probable causeThe AMLC Compliance and Investigation Group said "probable cause" exists that the two had committed money laundering, "having transacted and/or converted, transferred, moved, acquired, possessed or used proceeds of an unlawful activity."

The AMLC cited testimonies during the Senate blue ribbon committee investigation last week where witnesses said a total of $59.349 million was transferred to several accounts under Xu's name.

Based on the testimony of a representative from remittance firm PhilRem (unnamed in the complaint), a total of $30.565 million—or $18 million and 600 million pesos—was "personally delivered" to Xu in several tranches from February 5 to 13.
A separate amount of 1.374 billion pesos, or $28.784 million, was wired to the account of Bloomberry Resorts and Hotel Inc., which operates the plush Solaire Resort Casino in Parañaque City, from February 5 to 11.

The AMLC said Solaire corporate secretary Silverio Tan confirmed at the Senate that the amount "was for the account of Xu as the registered casino junket operator."

It was eventually "converted into nonnegotiable chips issued to regular casino players," Tan told the senators, according to the AMLC.

Wong's rolePhilRem, meanwhile, transferred 1 billion pesos, or $21.6 million, to Wong, through the Philippine National Bank account of his business, Eastern Hawaii Leisure Co. Ltd., the AMLC said.

Wong is president and general manager of the company, which was "organised" in Hong Kong but operates at the Cagayan Economic Processing Zone.

Of the amount, Wong moved 900.475 million pesos to his personal account, and then withdrew 400 million pesos, the AMLC said. The account has since been frozen.

"The foregoing circumstances would show that respondent Wong knew or should have known that the funds that were remitted/transferred to [several] accounts … were part of the stolen funds from Bangladesh Bank, and are therefore proceeds of unlawful activities," the AMLC said.

The council said Xu committed the same offense, as he "remains to be in possession of the stolen funds" even while reports about the money laundering "have been all over the newspapers and are now subject of ongoing Senate blue ribbon committee hearings."

Earlier this month, the AMLC filed money-laundering charges against Deguito for her role in opening the four bank accounts to which the stolen money was wired by the hackers.

Assistant State Prosecutor Gilmarie Fe Pacamarra last week ordered Deguito to answer the charges and appear at preliminary hearings on April 12 and 19, during which the DOJ will determine whether there is probable cause to bring the branch manager to court.

Selective actionCommenting on the AMLC move, Kabataan Rep. Terry Ridon asked why no charges were brought against top RCBC officials and businessman William Go, whose denial of involvement in the cyberheist had been disputed by Deguito's deputy, Torres.

"We are gravely concerned that mere branch-level bank personnel are being publicly slandered by bank executives and supposedly valued clients involved in this controversy," Ridon said, noting that Tan and other RCBC officials had invoked the bank secrecy law to evade further scrutiny.

"There should be no sacred cows in the AMLC criminal complaint. [All the people] involved should be subjected to preliminary investigation, including RCBC executives who greenlighted the transaction when it entered the Philippines," he said.

Ridon said PhilRem's liability should also be checked thoroughly to determine whether it knew from the outset that the remittances it handled were dirty money.

Not laundering hotspotDespite the scandal, the Philippines is not seen as a hot spot for money laundering, according to Julia C. Bacay-Abad, executive director of the AMLC.

Abad, however, urged further tightening of rules against money laundering by including casinos as well as real estate brokers and dealers in the coverage of the Anti-Money Laundering Act (Amla).

"The Philippines is not the single country where money laundering could happen. We're not a haven for money laundering," Abad said at a news forum where she explained the mandate and procedures being followed by the AMLC.

Abad, however, refused to answer questions about the transfer of money from the Bangladesh Bank account in the Federal Reserve Bank of New York to the RCBC Jupiter branch accounts.

She maintained that the AMLC swiftly moved as soon as it found out that the transactions exceeded the legal daily limit.

But Abad disclosed that only nine to 10 financial analysts at the AMLC go through the millions of covered transactions and hundreds of thousands of suspicious transactions throughout the financial system.

AMLC data showed that last year, more than 36 million transactions were deemed covered on top of more than 146,000 flagged as suspicious.

Abad said the proposal to give the AMLC power to issue a cease-and-desist order to immediately freeze a suspicious account before going to the courts would be "helpful," although it would be up to legislators who had proposed to amend the Amla.

Expand Amla coverageShe also said the AMLC would propose to Congress to include casinos and the real estate sector in the coverage of the law.

Abad also said the AMLC also "[favors] lifting the bank deposit secrecy law."

Copyright: Philippine Daily Inquirer/Asia News Network