THE RIZAL Commercial Banking Corp. (RCBC) did not immediately freeze the accounts where $81 million in stolen money was transferred because it did not consider a stop- payment request sent by the Bangladesh Bank as urgent, a bank official said on Tuesday.
The admission was made by Maria Celia Estavillo, RCBC head of legal and regulatory affairs, during the resumption of the Senate blue ribbon committee hearing on the money-laundering scandal.
Estavillo said the bank received 790 messages from the Society for Worldwide Interbank Financial Telecommunications (SWIFT) on February 9, three of which were from the Bangladesh Bank.
SWIFT is a messaging network that financial institutions use to securely transmit information and instructions through a standardized system of codes.
Estavillo said they considered the messages sent by Bangladesh Bank “normal priority” because there was no indication that it was urgent.
“They did not send us any high priority requests. They did not send us any stop payment order. They just sent us an unauthenticated free format message,” the lawyer added.
She said the Bangladesh Bank informed RCBC that the transactions were doubtful and requested to stop payment or freeze the beneficiary account if payment had been made.
In effect, the Bangladesh Bank wanted RCBC to stop payment on the deposits made in the accounts of Michael Cruz, Jessie Lagrosas, Alfred Vergara and Enrico Vasquez.
Estavillo said the transactions pushed through because the message from Bangladesh was not stamped “urgent.”
“So the settlements department would just look at the headings [of the messages]. Stop urgent was not included,” she added, explaining that nothing in the subject of the message indicated that it was urgent “unless you open the message.”
Senator Teofisto Guingona 3rd, chairman of the Senate blue ribbon committee, asked Estavillo why RCBC was unaware that it is receiving a request from a central bank of another country.
Estabillo said that since the Bangladesh Bank is not their correspondent, there was nothing to indicate that the sender was the central bank of Bangladesh.
“Regardless, whether they [Bangladesh Bank] are your correspondent bank, the point is by just looking at the SWIFT codes, because you are also privy to swift codes, you would know it’s from a central bank,” Guingona pointed out.
Estavillo told senators that RCBC acknowledged receipt of notice from the Bangladesh Bank on February 9 and informed the institution that the bank had placed on hold the remaining proceeds from the transactions that were labeled doubtful.
She, however, admitted that RCBC did not freeze the accounts despite the request.
“We did not freeze it because while we have the ability to freeze accounts, they can’t do so when the funds have already moved out,” Estavillo explained.
The RCBC lawyer maintained that if it was not for the “misrepresentation” of RCBC Jupiter Branch manager Maia Santos-Deguito, the temporary hold order imposed by the bank on the accounts would have not been lifted.
She claimed that the accounts have already been placed on hold on the early evening of February 5, after their operations group saw the huge amount that entered their branch on that day.
“Our operations group contacted our retail banking group and advised them that they were putting it on hold until further information from the branch and there were a series of calls made,” Estavillo said.
She claimed that it was during that time when Deguito told two people in her branch that the accounts were her long-standing clients and the funds had been awaited for over a year.
“On the basis of that, several calls were made and the hold [order]was lifted that evening,” Estavillo said.
But Deguito denied Estavillo’s claim, saying it was she who tried to contact the settlement department to inquire about the entry of the huge account.
She said the money was credited past noon on February 5 but she did not get any call from the head office.
Deguito then asked her assistant, Angela Torres, to contact the settlements department through e-mail and ask for copies of certain documents that will support the remittance. She said she was surprised to learn that the account has been credited.
The settlements department around 6 p.m. sent an email with the attachment of a document indicating the amount, origin, beneficiary and purpose of the amount that entered her branch.
“A few hours later, there was already instructions on what to do to convert to dollars and remitted to Bloomberry and Eastern Hawaii,” Deguito said, adding that she received the instruction from casino junket operator Kam Sin “Kim” Wong.
But before she received the instructions from Wong, the bank manager said she got a call from her district head, Nestor Pineda, who asked if she can hold the funds.
She told Pineda to make the request in writing and send it to her through email.
Deguito then called her regional sales director, Brigitte Capiña, to inform her about Pineda’s request to hold the credit for remittance. She, however, was told that the funds have been cleared after due diligence.
On February 9, Deguito said she received another email from the settlements department on the recall of the funds but the money has long been remitted.
She then called Capina to inform her of the problem, but the latter passed the phone to Raul Tan, RCBC head of treasury, who said it is not their problem anymore.
“He told me hindi na natin problema yun [It is not our problem], problema ng Bangladesh yun [It’s Bangladesh’s problem],” Deguito said.
“They are aware of the problem but they still continued to trade the dollar,” she noted.