PH money laundering probe: What we know so far

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Metro Manila (CNN Philippines) — Between February 4 and February 5, thieves attempted to withdraw $951 million from a Bangladesh Central Bank account in the New York Federal Reserve, Reuters reported.

The request appeared to come from a Bangladesh server. Correct bank codes to authenticate the transfers were used, the New York Fed said.

Bangladesh Bank officials said that hackers breached their systems to steal the credentials.

About $101 million was stolen. Roughly $80 million ended up in the Philippines while $21 million went to Sri Lankan accounts.

The Philippine funds were allegedly deposited in the Jupiter Street, Makati branch of the Rizal Commercial Banking Corp., and were said to be brought to the Midas and Solaire casinos as arranged by individuals of Philippine Remittance Ltd. and casino agents.

Sen. Recto asks Philrem president Salud Bautista: How much did you remit to Solaire? Watch: cnn.ph/1LXc9jG

Posted by CNN Philippines on Monday, March 28, 2016

Finger-pointing

Records from the Philippines' Anti-Money Laundering Council (AMLC) showed that funds were deposited in the RCBC branch in separate accounts under the name of businessman William Go and four “John Does” from February 5 to February 9.

However, Go said the former RCBC branch manager, Maia Santos-Deguito, created the fake accounts under his name.

Deguito's lawyer, Ferdinand Topacio, said that his client has become a scapegoat of the incident.

Sen. Juan Ponce Enrile: "Magsalita ka ng katotohanan dito or I will make a motion to hold you in contempt."Maia Santos Deguito: "Hindi po ako tumatangging sumagot, humihingi lang po ako ng executive session."Sen. Juan Ponce Enrile: "Hindi pwedeng executive session. Hindi mo sasabihin sa amin kung ano ang gusto mo."Live streaming: http://cnn.ph/1LXc9jG

Posted by CNN Philippines on Thursday, March 17, 2016
 

In a senate probe into the incident on April 5, Deguito said the alleged $81 million money laundering scam “could be possible only with the participation of people from the highest officialdom of RCBC, in cahoots with extremely wealthy businessmen whose far-reaching powers and influence span several countries.”

Deguito has also accused RCBC President and CEO Lorenzo Tan of allowing the incident to push through.

“If I had made mistakes, it is these: That I believed and trusted the bank president Mr. Lorenzo Tan; that I followed him when he said I should ‘take care’ of his friend; that I relied on the fact that Mr. Tan could not have been unaware of a transaction that has been labelled the biggest bank heist in the history of the world,” she said.

Tan previously appeared before the Senate on March 15 to explain his side.

He said he was unaware of the $81 million stolen money from Bangladesh, and explained that his approval is unnecessary even for such a huge amount.

"These allegations are baseless and malicious. To set the record straight, I do not personally know Ms. Deguito and have neither nor have maintained any relationship or direct dealing with her," said Tan.

Related: Senate committee launches money laundering probe

‘Missing link’

Kam Sin "Kim" Wong, a casino agent described by Sen. Serge Osmeña as the "missing link" in the $81 million money laundering scandal, pointed to Deguito and Philippine Remittance Ltd. (PhilRem) as the ones who facilitated the illegal transactions.

"Si Maia at PhilRem ang gumawa ng paraan mailabas ang pera sa bangko," he added.

[Translation: "Maia and PhilRem found a way to take the money out of the banks."]

According to Wong, Chinese junket operator Su Hua Gao sought his help to open a dollar account in the country. Wong said that Gao is also a casino player who owed him money. He has known Gao for eight years.

Kim Wong names junket operator as Mr. Gao from Beijing, China. Watch: cnn.ph/1LXc9jG

Posted by CNN Philippines on Monday, March 28, 2016

Wong referred Gao to Deguito. "Palagi ako kinukulit ni Maia para mag-open ng account sa RCBC."

[Translation: "Maia would always bother me to open an account in RCBC."]

During the Senate hearing on March 17, a representative of PhilRem testified that upon the instruction of Deguito, the company personally delivered $18 million and P600 million to Weikang Xu.

Charges filed

For its part, the Department of Justice will hear a criminal complaint against those allegedly involved in the incident.

The AMLC tagged Santos-Deguito as one of the respondents in the case.

Other respondents are John Does: “Michael Francisco Cruz,” “Jessie Christopher Lagrosas,” “Alfred Santos Vergara,” and “Enrico Teodoro Vasquez.”

It pointed out that Deguito allowed the opening of bank accounts on May 15, 2015 based on identity documents.

But these identities turned out to be fictitious.

The council said Deguito failed to verify the identities of the respondents within nine months from the time the accounts were opened. It accused Deguito of allowing the suspects to withdraw the stolen funds.

AMLC has also filed charges against Wong and Xu.

It alleged that Wong knew or should have known that the funds remitted or transferred to the accounts of the four "John Does," "Willam Go," Philippine Remittance Ltd. (PhilRem), Eastern Hawaii Casino and Resort in the Cagayan province, and to his own account were part of the stolen funds from the Bangladesh Bank. The same holds true for Xu.

Also read: Bangladesh envoy: We want our money back

Blacklist risk

If allegations of money laundering are proven true, Sen. Serge Osmeña believes that there will be grave consequences to the country's financial status. For example, the country could be listed in the blacklist opt the Financial Action Task Force on Anti-Money Laundering.

"Kapag dumating tayo sa blacklist, malilintikan tayo sapagkat lahat ng mga bangko natin, hindi na makaka-transact soon sa New York at sa London," explained Osmeña, who chairs the Senate Committee on Banks, Financial Institutions and Currencies.

[Translation: "If we reach the blacklist, we will be at a loss because our banks will not be able to transact with their counterparts in New York and London."]

Read: Sen. Osmeña: PH may suffer if money laundering is proven

As a result, Philippine banks might pay higher transaction costs when dealing with foreign banks. This might affect overseas Filipino workers' remittances, which might be targeted for costly scrutiny.

It might also lead to greater difficulty for Philippine consumers who buy imported items online using credit cards.

"It's going to make life harder for everybody. Your credit cards probably will not be honored by international banking institutions," Osmeña said.

Some funds handed over to BSP

Wong handed over $4.63 million in cash to the Bangko Sentral ng Pilipinas (BSP) on Thursday (March 31).

Wong's lawyer, Atty. Inocencio Ferrer Jr., represented him in the transaction.

Ferrer said it took three hours and two money counting machines to verify the amount and to check that each $100 note was real.

Ferrer also revealed that he came unannounced to the BSP on Thursday afternoon because of security reasons, considering the amount he was carrying.

'Fandation'

Because of a typographical error, bank authorities managed to prevent the theft of $850 million.

In one transaction, thieves were supposed to transfer funds to an unregistered Sri Lankan NGO, Shalika Foundation, but they misspelled "foundation" as "fandation."

The Bangladesh Central Bank said it has recovered all the money it lost to Sri Lankan accounts, and has successfully frozen the accounts in the Philippines. It is "working closely" with the Philippine authorities to recover the money.

Read: Bangladesh 'optimistic' it will get $101 million back after bank heist

On March 15 Bangladesh's central bank Governor Atiur Rahman resigned in light of the heist.

"I am ready to resign for the sake of the nation," Rahman told reporters in Dhaka. "My resignation letter is ready and I will step down if the prime minister wants."

 

CNN Philippines' Rex Remitio and Anjo Alimario; CNN's David Goldman, Charles Riley, Sugam Pokharel, and Roshni Majumdar; and Reuters contributed to this report.