BSP-Cebu exec: Violation of law caused $81M scam

‘AMLA not deficient, it was violated’

CEBU, Philippines - Violation of the law could have caused the money stolen from the Bangladesh Central Bank to enter the Philippines' financial system.

Sought for comment on the issue, Lawyer Leonides B. Sumbi, director of the Bangko Sentral ng Pilipinas-Cebu, said the bank heist could have been prevented if the deposit of the $81 million, which were stolen from the central bank's account at the New York Fed, was immediately reported to be suspicious.

"There's nothing deficient in our AMLA (Anti-Money Laundering Act). Only that the law was not followed. Our regulation requires that when there is a very big account coming in which is not the usual deposit history of that particular account, it should be reported as suspicious account," Sumbi told The FREEMAN in an interview.

Worst is that the money was even allowed to be withdrawn, the official said.

The $81 million had been tracked to Rizal Commercial Banking Corp. (RCBC).

From RCBC, the funds went to money-transfer company Philrem, which moved them to casinos and individuals involved in the gaming industry, reports said.

Earlier reports said that a portion of the stolen funds was already recovered through junket operator Kam Sin Wong or Kim Wong who transferred $4.63 million in cash to the Anti-Money Laundering Council and the Bangladesh government on Thursday last week.

The Senate investigation into the $81-million money laundering case has continued, trying to track the money that entered the casinos and recover the funds.

In an earlier statement, RCBC said it will issue subsequent reports and statements as the investigation progresses and will cooperate with government regulators.

If the AMLA was only followed, Sumbi explained that the anomalous transaction could have been alerted for the very first time.

"And the withdrawals would not prosper," she added.

"My only point is had they (the bank) followed the regulation of AMLA, that would not have happened," Sumbi said. "They would have known there's something suspicious."

Republic Act 9160 or the Anti-Money Laundering Act of 2001 created the AMLC which has the authority to "freeze any monetary instrument or property alleged to be proceeds of any unlawful activity."

AMLC is a financial intelligence unit that receives and analyzes covered and suspicious transaction reports.

Money laundering is an act or series of acts whereby proceeds of an unlawful activity, whether in cash, property or other assets, are converted, concealed or disguised to make them appear to have originated from legitimate sources. One way of laundering money is through the financial system.

While the bank heist incident may tarnish the image of the Philippines, Sumbi thought that it would not have a significant impact on the financial sector.

"It was only violation of the law that caused it," she said.

Earlier, Cebu Bankers Club President Maximo Eleccion said Philippine banks would continue to be cautious against illegal money entering the banking system.

He said banks should always scrutinize the source of suspicious money being deposited in them and know the identity of their customers. (FREEMAN)