Money-laundering ‘business’

After six public hearings by the Senate Blue Ribbon Committee on the $81-million money-laundering scam, the inquiry in aid of legislation has touched only the surface of this obviously deep-rooted illegal activity. Thus, what have so far been unearthed from the Senate inquiry were still not closer to the truth than the day their legislative probe began more than a month ago.

Conflicting statements – even outright lies and obvious cover up – dominated the sound bites that we have heard so far from the televised Senate public hearings. Fortunately, the Philippine banking system has grown big and solidly stable to absorb the shock waves as a consequence of this money-laundering scam that hit the Rizal Commercial Banking Corp. (RCBC).

After initially talking in executive session by the senators, then testifying in subsequent open public hearing, RCBC bank manager Maia Deguito changed her story several times. Under intense questioning by Sen. Sergio Osmeña, chairman of the Senate committee on banks, currencies, and financial institutions, Deguito was caught in her own web of lies.

Deguito is the RCBC branch manager in Jupiter, Makati City who allegedly placed the money in bogus accounts and moved it to the casinos partly through a remittance company.

I almost fell from my seat when Deguito casually admitted she lied under oath. When Sen.Osmeña confronted her with her previous sworn statements before the Senate, Deguito calmly confessed her latest statement before them can be considered, in effect, a lie.

If Deguito is capable of lying through her teeth before the senators, who really knows when is she telling the truth or not? First, she claimed it was casino junket operator Kim Wong who ordered all the withdrawals and money transfers from RCBC.

Unfortunately for Deguito et.al., Sen.Osmeña studies well the issues and cases before he attends any public hearing. Up for re-election in the coming May 9 polls, the maverick senator from Cebu takes time out from his campaign to attend this Senate investigation.

Hopefully, many lawmakers up for election like Osmeña will also support moves to revisit the Anti Money Laundering Law, including the proposed amendments to include casinos in the reportorial requirements. One of them is comebacking Senator Francis “Kiko” Pangilinan, one of the co-authors and co-sponsors of Republic Act 9160, or AMLA.

Pangilinan underscored the need for more safeguards in the existing law, particularly in the banking sector, to ensure it is not used to launder money in the country. In a roundtable dialogue with editors and reporters of The STAR last Friday, Pangilinan noted a lot of the responsibility for what befell the Bangladesh Bank was on RCBC branch headed by Deguito where the stolen money conveniently found its way.

The Senate mustn’t take this lightly, lest they lose face, if not the credibility of their institution. No one should be allowed to trample on the Senate of the Philippines and get away with it.

Speaking of credibility, another institution sorely lacking credibility is the Anti-Money Laundering Council (AMLC). Caught sleeping on the job when millions of stolen US dollars found their way into a Philippine bank, withdrawn by a remittance company, and finally transferred to casinos and junket players, the AMLC completely bungled its job. As the watchdog and as the country’s first line of defense against illegal transactions, the AMLC failed miserably on both counts.

It’s actually an embarrassment that the AMLC has not up to now even charged the remittance company Philrem despite the fact that the fingerprints of this company are all over the series of transactions. Just following the money trail and connect the dots, the Philrem is on it every step of the way.

Worse, AMLC was even beaten to the draw by the Bureau of Internal Revenue (BIR) which filed tax evasion charges against the remittance company based on its own financial statements as submitted to the Senate. BIR commissioner Kim Henares clarified though the current charges are just about Philrem’s tax-shaving, or non-payment of correct business taxes. Whatever levies are due from the $81-million transactions, according to the BIR chief, are still subject of an ongoing audit.

Heck, AMLC was so slow that it was only able to freeze P29,000 from Philrem’s account – long after the billion-peso illegal transactions have been consummated. Doing his own sleuthing, Osmeña located the missing $17 million of the $81 million stolen by cyber hackers from the Bangladesh central bank and remitted to four bogus accounts in Deguito’s RCBC branch.

Philrem owners Salud and Michael Bautista both denied keeping any part of the $81 million but they offered to return the P10.4 million they earned for their conversion and delivery service. Having been in the business of converting and remitting dollars for 18 years as the Philrem couple told the Senate hearing, it won’t be surprising if the company maintains valuable connections with regulators. Are these ties keeping them from being charged? Just asking.

To be fair, the AMLC is an undermanned agency. But having been in existence for 15 years, it only has itself to blame for its own predicament. It’s also no excuse for not taking proper and timely legal action against suspected players in the scam.

There’s still time for the AMLC to redeem itself. But that window of opportunity is quickly closing. It must act now against the likes of Philrem before it completely loses the public’s trust.

 It would be worse in the long run if such loopholes in our current AMLC Law are not plugged soon enough by the new Congress coming in after next month’s elections. We would have a new set of 12 senators and the House of Representatives to take over from the 16th Congress that winds down its sessions in June this year.

Osmeña rued the ones who are affected by this scam are our millions of overseas workers and Filipinos living abroad who send money and remittances to their families here.

Thus, the $81-million money laundering scandal shouldn’t be left hanging with no conclusive solution. There is no decision yet as to when the next Senate hearing would be held. 

There is so much public interest imbued on this case for the senators to help put an end to those involved in money-laundering scams out there. Obviously, money-laundering remains a very lucrative business in our country.