PhilRem executives charged in $81 million Bangladesh money laundering scam

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THE ANTI-MONEY LAUNDERING Council (AMLC) asked the Department of Justice to prosecute the controversial remittance firm PhilRem Service Corp. for its involvement in the money laundering of the illegally transferred $81 million Bangladesh funds to a local bank.

Charged In a 17-page joint complaint-affidavit were PhilRem President Salud Bautista, Chairman of the Board and Treasurer Michael “Concon” Bautista, and Anthony Pelejo, compliance officer of PhilRem, with money laundering.

AMLC disclosed that the stolen funds were credited to fictitious bank accounts of Michael Cruz, Jessie Christopher Lagrosas, Alfred Vergara, and Enrico Vasquez, which were all opened on May 15, 2015.

It said fictitious dollar and peso accounts of William So Go opened last February 5 and July 30, 2014, respectively, were likewise involved. All bank accounts were maintained at the RCBC Jupiter Business Center Branch in Makati. Go had already denied owning the peso and dollar accounts involved.

With AMLC’s filing of charges, Senate Blue Ribbon Committee Chairman Sen. Teofisto Guingona said “we are headed in your direction.”

Guingona warned the people involved in the money laundering scam who still lie and refuse to cooperate with the ongoing investigation.

The reelectionist senator said that with the public eye scrutinizing the testimonies being presented during the hearings, key players in the grand scheme cannot afford any more cover-up.

“With PhilRem charged by AMLC, we accomplish two things: 1) We neutralize a key player in Philippine money laundering, and 2) It takes us a step closer to recovering more funds stolen from a poverty-stricken country,” Guingona stated.

In the complaint, AMLC cited malicious reporting, knowledge of illicit funds, possession of illicit funds, and conversion and use as some of PhilRem’s violation of the Anti-Money Laundering Act.

The document further highlighted a glaring inconsistency on who instructed PhilRem to transfer the stolen funds. In the suspicious transaction report (STR) submitted by PhilRem’s Anti-money Laundering Compliance Officer Anthony Pelejo on February 17, he claimed that it was “a certain William Go.” However, PhilRem President Salud Bautista stated during the Blue Ribbon hearings that it was RCBC Branch Manager Maia Deguito.

“The complaint against PhilRem is a welcome development to the public, who have been following the investigation as if it were a crime thriller series,” said Guingona.

“But more importantly, with the public knowing that these things do happen and that these things can be thwarted if we continue to push for pieces of legislation that will safeguard our financial system from future exploitation, then the Filipinos, especially our OFWs and their families, can have due protection of their hard-earned income,” he said.

“We simply cannot ignore the blow that this money laundering scheme may cause to our laborers overseas,” he added.

The Senator noted that the brunt of de-risking measures that are already being implemented by foreign correspondent banks was only magnified by this flaw in the financial system.

“Closure of legitimate remittance options, high remittance costs, and recourse to informal money transfer are not the best show of gratitude for our OFWs, and these are the scenarios that we aim to avoid,” further stated Guingona.

Guingona’s committee investigated in the Senate the case of the stolen funds which were channeled to the Philippine casinos.

Of the stolen Bangladesh funds, $65,668,664.37 were withdrawn from the fictitious bank accounts of Cruz, Lagrosas, Vergara, and Vasquez last February 5 and 9, then transferred to the “Go/Centurytex” account. At least $13 million of that amount was then transferred to the RCBC account of Abba Currency Exchange Inc., on February 9.

On February 5, 9, and 10, the balance of $52,668,664.37 in the Go account was transferred to the RCBC-Unimart Greenhills account of PhilRem.

On February 9, $15,215,922.26 from Vasquez’s account was also transferred to PhilRem’s account at RCBC-Unimart Greenhills.

On February 11, Abba and Beacon transferred $10 million and $3 million to the RCBC-Pasig branch account of PhilRem.

In total, $61 million were eventually converted and transferred to PhilRem’s peso account at the RCBC-Unimart Greenhills branch.

On February 17, Pelejo submitted a suspicious transaction report (STR) indicating that $80,884,641.63 had been remitted to Eastern Hawaii and Weikang Xu as instructed by a certain “William Go.”

The AMLC found out that the fact that Kim Wong received funds from PhilRem was omitted from the STR narrative submitted by Pelejo.

The Agency stressed that PhilRem had the responsibility to conduct “Know Your Customer Rule” and keep identification record when it dealt with “Go,” the owner of the account to whom a large part of the stolen funds were transferred.

“What is highly irregular was that respondent spouses claimed that they were dealing with [RCBC Jupiter] Branch Manager [Maia] Deguito, and not the ‘owner’ of the account, ‘William So Go,’” read the complaint-affidavit.

“It is contrary to business practice that a person would deal in large amounts of money with someone who is not the owner of the account, nor someone who was duly authorized by the owner,” the complaint noted.

The AMLC said the PhilRem officials were clearly aware that the funds were not legitimate when they deliberately ignored the AMLA requirements to conduct the KYC rule and record keeping of customer information.

“Had they done so, respondent spouses would have personally interviewed the real William Go and discover that the latter was not aware of the existence of the RCBC Account Nos. 9016455240 and 9010270206,” read the complaint.

The AMLC said PhilRem actually commingled the stolen funds and acted as “cleaning house,” making it extremely difficult to trace the source and flow of the funds by “laundering” the funds to conceal the money trail.

AMLC said the services of PhilRem was actually unnecessary because the funds could have been directly transferred from Go’s bank account to the beneficiaries’ bank accounts but that would have been easily prevented or tracked within the banking sector.

The AMLC also noted how the respondents continued to possess more or less $17 million of the stolen funds remitted through their company and failed to account for its alleged delivery to Weikang Xu. (MCA)

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