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'Huge deposits to dormant accounts should trigger alerts'

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Dharel Placido, ABS-CBN News

MANILA – Huge deposits to dormant bank accounts should have alerted bank officials of a possible money-laundering transaction, an official of the Bangko Sentral ng Pilipinas (BSP) told the Senate which is investigating how $81 million was stolen from the central bank of Bangladesh, remitted to the the Philippine banking system, and laundered in the country&#x27;s casinos.BSP Deputy Governor Nestor Espenilla Jr. said the huge deposits to the four dollar bank accounts at the Rizal Commercial Banking Corp. (RCBC) should have triggered an alert because the accounts were dormant and the funds were coursed through wire transfers.&#x27;&#x27;The triggers there would be the lack of activity and suddenly there is a huge influx and it is also a wire transfer which is also a potentially high-risk transaction. So there are enough elements in your example to trigger an alert,&#x27;&#x27; Espenilla told Senator Sergio Osmeña III, chairperson of the Senate Committee on Banks, Financial Institutions &amp; Currencies.The Senate Blue Ribbon Committee is investigating how $81 million from the central bank of Bangladesh, allegedly stolen by Chinese hackers, entered the Philippine banking system and then laundered through casinos.Espenilla explained that banks usually set standards and parameters on what kinds of transactions should trigger an alert.&#x27;&#x27;In normal experience, amounts like that are huge, so it is unusual,&#x27;&#x27; Espenilla said, responding to a hypothetical question by Blue Ribbon Committee chairperson Sen. Teofisto Guingona III about a $30 million deposit to a dormant account.&#x27;&#x27;It depends on the bank policy. A bank is required under our regulations that implement the Anti-Money Laundering Act to establish a policy by which certain transactions will raise alerts with respect to the bank and if triggered, this would require a procedure in terms of how this would be dispensed with.&quot;<div>RCBC ACCOUNTS</div>RCBC, the Philippines&#x27; fifth largest bank owned by taipan Alfonso Yuchengco, is now at the center of the controversy after four dollar accounts opened in an RCBC branch in May last year were allegedly used for the money-laundering transactions.During the hearing, Anti-Money Laundering Council executive director Julia Abad confirmed that $81 million was wired on February 5, a Friday, to four bank accounts created at the RCBC Jupiter branch in Makati.An investigation by the AMLC revealed that the four RCBC bank accounts were created using <a href="http://news.abs-cbn.com/nation/03/15/16/fake-documents-broken-cctvs-plot-thickens-in-laundering-scam">fake documents</a>.The biggest of the money transfers was deposited to the account of Jessie Christopher Lagrosas ($30,000,028.79), followed by Enrico Teodoro Vasquez ($25,001,573.88), Alfredo Santos Vergara ($19,999,990), and Michael Francisco Cruz ($6,000,029.12).These funds, totaling $81 million, were then transferred and consolidated into the account of William So Go, a businessman engaged in customs brokerage, in various tranches.Go has <a href="http://news.abs-cbn.com/business/v1/03/11/16/william-go-pins-down-rcbc-branch-manager">denied</a> creating the account, putting him at odds with RCBC Jupiter branch manager Maia Santos Deguito.The first tranche of transfers to Go&#x27;s account was made the following banking day, February 9. February 8, a Monday, was Chinese New Year, a holiday in the Philippines.Abad confirmed that the four RCBC accounts transferred the following amounts to Go&#x27;s account: Vergara ($19,951,502.13), Vasquez ($9,760,000), Lagrosas ($7,236,000), and Cruz ($5,985,000).Another $15,215,000 was transferred to the account of remittance firm Philrem that same day by Vasquez.The money, on Go&#x27;s alleged order, was transferred to the bank accounts of Weikang Xu, a supposed junket operator in the gaming business, and to Eastern Hawaii Leisure Co. Ltd. as well as Bloomberry, operator of Solaire.Kim Wong, the sixth person linked to the scam, has no direct links to the group but has the same surname as the incorporator of Eastern Hawaii Leisure which operates a hotel-casino complex at the Cagayan Special Economic Zone.The Philippines&#x27; Anti-Money Laundering Act (AMLA) does not cover casinos. Part of the $81 million was coverted to chips and used to gamble in Solaire Casino.<div>STOP PAYMENT REQUEST</div>Sen. Guingona said these amounts, totaling an estimated $58 million, would have been frozen had the RCBC acted immediately on a stop payment request sent by the Federal Reserve Bank of New York.Earlier in the hearing, RCBC president and CEO refused to detail how the bank acted on the New York Fed&#x27;s request, citing the Bank Secrecy Law.Guingona was frustrated by Tan&#x27;s invocation of this law, saying he was merely asking about bank procedures and not details of a particular bank transaction. He added that the owner of the funds, the central bank of Bangladesh, did not even invoke the country&#x27;s bank secrecy law.RCBC head of anti-money laundering department, Laurinda Rogero, however, stressed that the central bank of Bangladesh&#x27;s ownership of the funds has yet to be established, noting that the US federal government has denied that any hacking occurred.&#x27;&#x27;The determination of ownership, as well as whether or not fraud was committed, has not yet been established. Right now, the federal US government denied there was any hacking,&#x27;&#x27; Rogero said.&#x27;&#x27;The presumption is ownership of funds is with the account holders.&quot;To this, Guingona responded: &#x27;&#x27;What are we talking about? You are bordering on the ridiculous here… The account holders are proven to be fake. What are you hiding?&quot;&#x27;&#x27;They have to protect the fake holders,&#x27;&#x27; Osmeña quipped.

MANILA – Huge deposits to dormant bank accounts should have alerted bank officials of a possible money-laundering transaction, an official of the Bangko Sentral ng Pilipinas (BSP) told the Senate which is investigating how $81 million was stolen from the central bank of Bangladesh, remitted to the the Philippine banking system, and laundered in the country's casinos. 

'Huge deposits to dormant accounts should trigger alerts'

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'Huge deposits to dormant accounts should trigger alerts'

Dharel Placido,

ABS-CBN News

Published March 15, 2016 11:02 PM PHT

Read More:

bangko sentral ng pilipinas

rcbc

money laundering

maia deguito

nestor espenilla

william go

instant article

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