The Anti-Money Laundering Council (AMLC) has filed a third complaint with the Department of Justice (DOJ) in connection with $81-million worth of Bangladesh Bank funds laundered into the Philippines.
In a 17-page complaint, the AMLC charged remittance firm Philrem Service Corporation (Philrem) owners and spouses Salud R. Bautista and Michael "Concon" S. Bautista, also the company's president and treasurer, respectively; also charged was Anthony A. Pelejo, Anti-Money Laundering Compliance Officer of Philrem.
The complaint involves violations of Section 4a (transacts monetary instruments or property that represents, involves, or related to the proceeds of an unlawful activity), 4b (converts, transfers, disposes of, moves, acquires, possesses or uses said monetary instrmument or property), 4f (performs or fails to perform any act as a result of which he facilitates a money laundering offense); Section 9b (record keeping); and Section 14c (malicious reporting) of Republic Act (RA) No. 9160, also known as the Anti-Money Laundering Act.
The complaint states that on February 5, 9, and 10, a total of $52.67-million was transferred from a Rizal Commercial Banking Corporation (RCBC) account under the name "William So Go" to Philrem's RCBC-Unimart Greenhills account. On February 9, another $15.22-million was transferred to Philrem's RCBC-Unimart Greenhills account.
On February 11, $10-million and $3-million were transferred to Philrem's RCBC Pasig branch account.
Eventually, a total of $61-million was converted and transferred to the peso account of Philrem with RCBC-Unimart Greenhills.
"Philrem, acting as remittance agent, actually commingled the funds and acted as a 'cleaning house.' Philrem's role was to make it extremely difficult to trace the source and flow of the funds by avoiding all anti-money laundering measures set by laws and regulations.
"The participation of Philrem was really to 'wash' the funds and conceal the money trail. In fact, the funds could have been directly transferred from the bank account of ['William So Go'] to the bank accounts of the beneficiaries," the complaint read.
WHAT TOOK PLACE
The complaint began its narration of facts with a Suspicious Transaction Report (STR) submitted by respondent Pelejo last February 17, which stated:
"Sometime towards the end of January 2016, Philrem was referred to a certain William Go, who was doing business under the name Centurytex Trading, for possible remittance deal. Mr. Go incidentally keeps an account with RCBC Jupiter (Business Center). He needed to remit Philippine peso equivalent of US dollars to the casino market to take advantage of the heavy influx in the country of Chinese players, mostly in junkets, during the long weekend to the Chinese New Year (February 8.)"
Pelejo's report further states that "Philrem made... transactions as instructed by Go" specifically for deliveries of $29-million to Bloomberry Resorts and Hotel Inc. (Solaire) on from February 5-10; $21.25-million to Eastern Hawaii Leisure Company Ltd. from February 10-11; and $30.64-million to Mr. Weikang Xu from February 5-13.
The complaint pointed out that this was contrary to the statement made by Salud Bautista before the Senate Blue Ribbon Committee hearing into the laundered funds that the "instructions to transfer funds from the 'Go' account to Bloomberry, et al., came from the RCBC Jupiter branch manager, Maia Deguito."
READ: Kim Wong, Philrem contradict each other on cash deliveries
The complaint states that despite what was reported in the STR that $18-million and P600-million in personal cash deliveries were made by Philrem and received by Xu from February 5-13, the testimony before the Senate of Salud and Michael Bautista included an admission that they gave a portion of the funds to businessman Kim Wong. During the hearing, Wong himself admitted having received P400-million and $5-million from the Bautistas.
"The fact that Kim Wong directly received funds from Salud and Concon was glaringly omitted from the STR narrative submitted by respondent [Pelejo] of Philrem. Thus, the STR submitted by Philrem, through respondent [Pelejo], bore false and malicious information intended to mislead the AMLC," the complaint read.
As a registered remittance agent with the Bangko Sentral ng Pilipinas, Philrem is a "covered person" under RA No. 9160 "required to comply" with BSP requirements under its Circular No. 471, Series of 2005, namely registration, customer identification (know your customer), reporting of covered and suspicious transactions, and record keeping.
"Philrem acted as a remittance agent when it facilitated the delivery of funds from 'Go' to Weikang Xu. Part of the transaction is to convert the money for remittance from US dollars to Philippine pesos.
"In the course of the transaction, Philrem also acted as a foreign exchange dealer of currency exchange. Philrem, however, is neither registered as a foreign exchange dealer nor as a currency exchange," the complaint read.
KNOWLEDGE OF ILLICIT FUNDS; CONVERSION; CUSTOMER IDENTIFICATION AND RECORD KEEPING
The complaint stressed that as a remittance company, Philrem and its officers were duty-bound to conduct the 'know your customer rule,' keep identification records when they dealt with 'Go' before proceeding with the transactions.
"What is highly irregular was that [respondent Bautista spouses] claimed that they were dealing with branch manager Deguito, and not the 'owner' of the account, 'William So Go,'" the complaint read.
The complaint also states that there was no authorization from Go for the purposes.
The Go account was later found to be fictitious and denied by Go himself.
The complaint also pointed out that the Centurytex US dollar account was opened only last February 5 "apparently to make it appear that the spouses and Philrem were dealing with a business entity, rather than with an individual."
"The foregoing circumstances clearly show that [respondent spouses Bautista] were aware that the funds were not legitimate when they deliberately ignored the AMLA (RA No. 9160) requirements to conduct [know your customer] and record keeping of customer information. Had they done so, respondent spouses would have personally interviewed the real William Go and discover that the latter was not aware of the existence of the RCBC accounts [under his name].
"Worse, respondent spouses converted and transacted the stolen funds with another fictitious account (Centurytex)," the complaint read.
The AMLC further said respondent spouses failed to file the mandatory Covered Transaction Reports (CTR) for the remittances they processed.
The AMLC also said respondent spouses "continued in their possession of more or less $17.13-million that the spouses received, but failed to account for its alleged delivery to Weikang Xu."
As for Pelejo, the AMLC complaint states that he was part of the attempt to conceal the correct information pertaining to the transactions.
Two earlier complaints have been filed by the AMLC over the stolen Bangladesh Bank funds, one charged Deguito and the holders of the four fictitious RCBC accounts used to funnel the funds into the Philippine financial system; and another complaint against Wong and Xu.
READ: RCBC branch manager sued for money laundering