When mystery hackers launched a stunning raid on Bangladesh’s foreign reserves, a plot worthy of a John le Carré spy novel was sparked in the Philippines, exposing the Southeast Asian nation as a dirty money haven.
The $81 million stolen from the Bangladesh central bank’s American accounts last month was immediately sent via electronic transfer to the Philippines’ Rizal Commercial Banking Corporation (RCBC), with the thieves deliberately targeting their laundering location.
The Philippines has some of the world’s strictest bank secrecy laws to protect account holders, while its casinos are exempt from rules altogether aimed at preventing money laundering.
“The Philippines is very attractive [for dirty money]because our laws have gaping holes. It’s easy to launder money here,” Sen. Sergio Osmena 3rd, who is pushing for stronger anti-money laundering laws, said.
Still, if the thieves were to get away with their audacious heist, the money had to be moved quickly through the banking system and into the casinos.
And it did.
Authorities took four days to order a recall of the money.
But by then it had vanished — leaving in its place a tale of death threats, bribes, shady business figures and a bank manager who could be the villain or a victim.
“I did not do anything wrong. If this is a nightmare, I want to wake up now,” the manager of the RCBC’s Jupiter Branch in Makati City (Metro Manila), Maia Santos-Deguito, told ABS-CBN television after authorities stopped her at the country’s premier Ninoy Aquino International Airport from trying to leave the country.
“I live everyday in fear,” she said.
With authorities in Bangladesh and elsewhere bamboozled over who masterminded the cyber heist, Deguito’s role as manager of the bank that accepted and shifted the money has come under intense scrutiny.
She has accused the bank’s president, Lorenzo Tan, of ordering her to move the money.
Tan has fiercely denied the accusations.
Senators who launched an inquiry this week into the affair are yet to determine whether she was a scapegoat, but are convinced she was not the mastermind.
“It’s a big operation. This could not have been done out of the Philippines alone,” Sen. Ralph Recto said.
The Senate inquiry and another probe by the Anti-Money Laundering Council (AMLC) have hit several major hurdles, including a security camera at the bank not working when the money was shifted.
Accusations and counter-accusations between Deguito and RCBC management have further confused investigators.
A final roadblock has emerged at the casinos, with the money apparently vanishing in mountains of gambling chips and mysterious middlemen.
“Our money trail ended at the casinos,” Julia Abad, deputy director of the AMLC, told senators last Tuesday.
On February 5, the same day Bangladesh Bank was hacked, the money was sent electronically to four accounts in Deguito’s RCBC branch on Jupiter Street in Makati City, the country’s acknowledged financial district, according to testimony to the Senate inquiry.
Those accounts appeared to have been set up solely for that purpose because they were done using aliases, the Senate inquiry heard.
After that, the bulk of the money was transferred into accounts of a local ethnic Chinese businessmen, William Go, who has since protested his innocence.
He said his signature was forged to set up the accounts.
From there, the money was briefly held by Philrem, a foreign exchange brokerage.
Philrem President Salud Bautista told Senate investigators that $30 million went to a man named Weikang Xu.
He was described as a casino junket operator but senators have said they know little more about him other than he is of Chinese origin.
The AMLC said another $29 million ended up in Solaire, a casino on a glittering Manila bayside strip that the Philippines hopes will become one of the world’s biggest gambling destinations.
That money was exchanged into chips but could only be turned back into cash after being played in the casino, its management told the Senate inquiry.
Another $21 million was sent to Eastern Hawaii Leisure, which runs a sparsely furnished casino with Chinese-only television in Santa Ana, a sleepy town in the far northern Philippine province of Cagayan, according to the council.
Osmena said the case was likely just the tip of the iceberg.
“This could have happened hundreds of times already,” he added.
“We discovered this one only because someone complained. But normally, if a drug dealer from Burma [Myanmar] or China would send money here, no one would complain.”