LATE last month, the global money laundering and terrorist financing watchdog, Paris-based Financial Action Task Force (FATF) again put the Philippines on the gray list, or those under increased monitoring, after failing to address strategic deficiencies to counter money laundering.
In addition to the Philippines, Malta, Haiti, and South Sudan were added to the list.
It is gratifying that Bangko Sentral ng Pilipinas (BSP), unlike the Department of Education, has accepted criticism without demur. Indeed, BSP’s aim is to make the improvements necessary to be removed from the gray list as quickly as possible.
We should emphasize that it is not only within BSP’s remit to make the necessary improvements. Many other government entities are also involved.
The Philippines was dragged into the $2.1 billion fraud at the German financial technology and payment services firm Wirecard AG. Included in the misinformation was that Wirecard’s chief operating officer Jan Marsalek was in the Philippines in June 2020. Allegedly, this was not the case and, according to the NBI’s International Airport Investigation Division, immigration officers tampered with Marsalek’s travel records so as to divert pursuing German authorities.
This example shows that in international crime several government entities may be included.
In a joint complaint filed by NBI and BPI, there are allegations of falsification of commercial documents.
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Although BSP is not crying foul about its demotion to the FATF gray list, I am not sure that other countries should not be placed there also. Specifically, it is not clear that the German authorities reacted with the necessary speed when the Wirecard scandal broke in 2019.
Fact-finding in fraud cases can often spread far and wide. For example, the British newspaper The Financial Times was ahead of the pack when it was becoming clear that all was not well with Wirecard’s accounts. A tenacious journalist can reach some areas more quickly than government bureaucrats.
The famous “cyberheist” case of 2016 is another example. The account of Bangladesh Bank held by the Federal Reserve Bank, Wall Street, New York was hacked on 4 February and more than $1 billion was stolen. $950 million was sent to Sri Lanka where eagle-eyed (and literate) officials spotted errors in the narrative included in the accompanying message sent over the SWIFT network. These officials immediately sent back the money to New York where it was credited to Bangladesh Bank.
Unfortunately, $81 million hacked from Bangladesh Bank was sent to RCBC, Philippines. This money was credited to named account holders in RCBC’s Jupiter Street branch where it was quickly withdrawn.
RCBC was quick to blame Maia Deguito, the bank’s Jupiter Street branch manager.
At a subsequent Senate hearing, RCBC’s legal officer indicated that the funds went straight from Wall Street, New York to Jupiter Street, Makati.
Is this true?
I believe that the SWIFT coding system could show that the funds are sent firstly from Wall Street to RCBC’s remittance center. Then RCBC sends the funds to the Jupiter Street branch. If so, then Ms. Deguito may not be the first RCBC employee to know about the $81 million credit.
So was Deguito scapegoated?
In a subsequent court hearing, she was found guilty of eight counts of money laundering, each of which attracted a sentence of four to seven years imprisonment. There were also enormous fines.
Deguito was reportedly given bail.
Did the Philippine authorities find the truth?
If not, does this weakness create obstacles to gray list removal?/PN
