MANILA, Philippines – The Anti-Money Laundering Council (AMLC) is seeking the help of the Federal Bureau of Investigation (FBI) in unmasking the persons behind the laundering of $81 million allegedly stolen by Chinese hackers from the account of the Bangladesh Bank in the US Federal Reserve Bank.
Julia Bacay-Abad, executive director of AMLC, admitted making the request at a hearing yesterday on the issue by the Senate Blue Ribbon committee.
“I was the one who requested assistance from the FBI,” Abad said in a reply to a query from Sen. Ralph Recto.
She also pointed out the AMLC has also sought the assistance of its counterpart in Hong Kong to check on the $20 million transferred to Hong Kong.
Abad told the committee investigations into the matter started when the head of the Bangladesh Bank wrote a letter to Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. last Feb. 11 seeking help in the recovery of $100 million stolen from its account in the US Federal Reserve.
The request involved $81 million deposited in the accounts of Michael Francisco Cruz, Enrico Teodoro Vasquez, Alfred Santos Vergara and Jessie Christopher Lagrosas in the Rizal Commercial Banking Corp. (RCBC).
Abad explained the accounts were opened with only $500 deposit on May 15 last year. The accounts were inactive until Feb. 5 to Feb. 9, during which $30.28 million was deposited in Lagrosas’ account, $25.1 million in Vasquez’s account, $19.99 million in Vergara’s and $6.29 million in Cruz’s.
Of the amount deposited in the account of Lagrosas, Abad said $22.73 million was withdrawn and deposited in an account businessman William So Go opened just last Feb. 1.
On the other hand, the rest of the amount was converted by PhilRem from US dollars to pesos and delivered to Weikang Xu, Eastern Hawaii Leisure Co. and Solaire Resorts owned by Bloomberry Hotels Inc.
Upon receiving the request of Bangladesh Bank, Abad said AMLC immediately got in touch with RCBC and started conducting an initial investigation.
She admitted that AMLC was only able to file a petition to freeze the concerned accounts last Feb. 29 and got an approval on March 1.
“We are completing our investigation into the matter. We are doing our best to find out the truth and bring justice to where it is due,” she added.
Denial
For his part, RCBC president and chief executive officer Lorenzo Tan vehemently denied any involvement in the irregularity and vowed to cooperate with legislators.
“We vehemently deny and disavow any and all knowledge, complicity or participation in the alleged money laundering of $100 million in the Philippines,” Tan told the committee chaired by Sen. Teofisto Guingona III.
According to Tan, RCBC has put in place systems, measures and policies that ensure compliance with prevailing laws and with applicable rules and regulations of the BSP.
He said the bank has a board-approved and updated Money Laundering Prevention Program Manual, as well as a department dedicated to anti-money laundering matters and an anti-money laundering committee composed of senior group and committee heads.
Tan explained the bank is conducting its own investigation into the alleged money-laundering scheme.
Tan also denied the accusations made by RCBC Jupiter branch manager Maia Santos-Deguito that the questionable transactions facilitated by her branch had his approval.
“These allegations are baseless and malicious,” he said.
“More importantly, I have no personal knowledge of, much less personal participation in, any of the transactions that are subject to this inquiry,” he said.
He explained RCBC processes in excess of two million transactions worth P1 trillion per month.
“These transactions are not known to me, and these do not and would not have had to be approved by me, even as CEO and president, because to impose such a requirement would slow down the process that needs to be expeditious and efficient,” Tan said.
Tan on Monday night urged fellow bankers to be more vigilant against system and institutional risks as he turned over the presidency of the Bankers Association of the Philippines (BAP) to his elder brother BDO president Nestor Tan.
For her part, Deguito who is represented by lawyer Ferdinand Topacio, refused to answer any question as she invoked her right against self-incrimination as a case has been filed against her before the Department of Justice.
In yesterday’s hearing, Tan did not go into details as he invoked the Bank Secrecy Law.
“I cannot talk specifically about this case because of bank secrecy, but I assure you that an investigation is going on in our bank to determine the actual facts that happened,” Tan said when asked by Guingona if there was a failure in the procedure of verifying the identities of the account owners.
Tan also refused to speak about a stop transfer order allegedly issued last Feb. 8, which was Chinese New Year.
“I cannot confirm or deny this request specific to this transaction, but as a general rule, when there is a freeze order on an account, the branch manager involved should comply with such order,” the RCBC president added.
A visibly irked Guingona said Tan could not invoke the Bank Secrecy Law as the money was owned by Bangladesh Bank.
The senator said that at the time the request was made, $58 million was still in the accounts held by RCBC and would have been retained had the bank immediately acted on the request.
“The one that can invoke secrecy is the owner of the funds. The owner of the funds is the central bank of Bangladesh, and they’re here precisely to ask us to help them recover the funds. They are not invoking secrecy,” the senator said.
The Bangladesh ambassador was present during the hearing.
Furthermore, RCBC’s anti-money laundering head Laurinda Rogero also invoked bank secrecy when asked by Sen. Sergio Osmeña III about the time the bank received the stop payment order.
She pointed out she could not speak about the specific incident because it has yet to be confirmed if the funds in question were indeed stolen.
But Guingona said the “account holders have been proven to be fake.” Another hearing has been set for tomorrow.
Go, for his part, denied that he was the owner of the account in his name, saying it was Deguito who used his name and forged his signature.
A review by RCBC of the CCTV footage in the Jupiter branch on Feb. 1, or the date Go supposedly opened the account, showed no evidence of the businessman’s presence in the bank at the time.
Go said he came to know Deguito when she was still the branch manager of East West Bank in Fort Bonifacio where he has an account.
He recalled that Deguito’s replacement at the East West Bank branch arranged for a meeting with her.
In the meeting, Go claimed being offered P200 million and was told a vague story about Deguito running into some trouble in her current job at RCBC.
It was during the meeting that Deguito reportedly admitted involvement in the transfer of money from overseas and the use of his name in her branch.
Go said he made clear to Dequito that he wanted no part in the scheme.
Tan denied recruiting Dequito to RCBC.
Philrem president Salud Bautista, during the meeting, admitted facilitating the transfer of funds from RCBC to Weikang Xu, Solaire and Hawaii Leisure on Deguito’s instruction.
She declined to provide details about the transactions, citing provisions of the AMLA.
Meanwhile, Valenzuela Rep. Sherwin Gatchalian said he would propose amendments to the Anti-Money Laundering Act (AMLA) to include casinos among covered institutions, saying their inclusion “is long overdue.”