Bid to trace more of stolen funds hits wall

The Senate Blue Ribbon Committee held a fourth hearing into the grand money laundering scheme on Tuesday in a fresh attempt to account for more of the loot that found its way into Philippine banks and casinos.

The four-hour hearing, however, still left gaps in the money trail, which a senator said left slim chances of recovering the amount fully.

The Anti-Money Laundering Council (AMLC) is preparing to file civil forfeiture cases before the courts "by next week," according to its executive director Julia Bacay-Abad, which should help the recovery of more of the money that was stolen in February from Bangladesh Bank's account with the New York Federal Reserve.

Silverio Benny J. Tan, legal chief of Solaire Resort and Casino operator Bloomberry Resorts Corp., has said that the company decided to confiscate and freeze some P107.35 million worth of chips and P1.346 million in cash from 19 players in a junket room run by Ding Zhize, who along with Gao Shuhua purportedly arranged to bring in the $81 million. Mr. Tan said the firm is waiting for a court order to facilitate the turnover of the funds to authorities. Some P1.365 billion went to Solaire, with P903.73 million going to the SunCity Group junket -- one of the biggest in Macau -- owned by Chau Cheok Wa and P100 million to Goldmoon junket run by Chang Lai Fong. Some P361 million was retained by Solaire itself.

Lawyer Katrina L. Nepomuceno said some P532 million was gambled in Midas Hotel and Casino, with P111 million already remitted as winnings.

In the same hearing, Sen. Paolo Benigno A. Aquino IV said casino firms should turn over the amounts that were used to play at their gaming tables, since these were part of the loot. If returned, such amounts would add up to roughly P782 million.

"Regardless of where money went, the same should be recovered," AMLC's Ms. Abad added.

The lawyers, however, maintained that the return of the played money -- considered "done" transactions -- was a move that was "yet to be discussed" by casino officials.

"The P361 million was played... At the time... we didn't know it was dirty money. If the house won when those money were played, I have received no instruction with respect to that. That is something to be discussed with management," Mr. Tan said.

This comes after Kam Sin Wong, who runs a casino junket under Midas Hotel through his firm Eastern Hawaii Leisure Co. Ltd., turned over $4.63 million and P38.28 million cash to AMLC over the past week.

Ms. Abad, however, flagged a potential impasse on the custody of Mr. Wong's money amid confusion as to whether they AMLC can already transfer funds back to Bangladesh, as the letter submitted by his lawyers state that the money was just for "safekeeping".

Bangladesh Ambassador John Gomes approached Ms. Abad and committee chairman Sen. Teofisto D. Guingona III after the hearing, discussing concerns with a raised voice.

"It would appear now that their intention was to turn over to the AMLC for safekeeping, but our understanding before is that he is willing to give it back to Bangladesh," Ms. Abad told reporters separately, adding that a meeting has been set today to settle the issue.

Mr. Wong had earlier said he would submit a "promissory note" to the Senate body representing his commitment to return P450 million which he got from the fund transfers as debt payment from Mr. Gao.

During the hearing, the senators again tried but failed to reconcile conflicting accounts made by key players in the case.

Messrs. Aquino and Guingona, as well as Sen. Ralph G. Recto, pointed out that remittance firm PhilRem Service Corp. made "contradictory statements" and has been selective in disclosing what it knows.

But PhilRem treasurer Michael Bautista insisted: "We have always accepted the fact that this transaction is a mistake and we will take the hits."

"But we are not keeping money, there is no money with us."

PhilRem officials maintained that they got instructions from Maia Santos-Deguito, manager of the Jupiter Street, Makati branch of Rizal Commercial Banking Corp. with which suspects deposited the stolen funds nearly a year after the accounts were opened using fake documents. Ms. Deguito, however, denied ordering the cash deliveries, even as she admitted referring Mr. Wong to PhilRem for the service.

Asked by senators whether any PhilRem accounts have been frozen, AMLC's Ms. Abad said two accounts were put on hold, but had deposits of only P29,000.

Philrem President Salud Bautista has again refused to sign a waiver to open her company's accounts for scrutiny.

"Parang may onsehan din dito (It appears one party in the deal duped the other). What's a fact is $80 million did enter your account; we know $61 went to casinos then na-withdraw one way or another...," Mr. Recto said.

After the hearing, however, Sen. Sergio R. OsmeAa III, vice-chairman of the committee, said some $17 million of stolen funds may still be with PhilRem: "That is the conclusion that the committee has right now. We have some witnesses that will say that," he told reporters.

Mr. OsmeAa added that the committee would likely need "one or two" more hearings to wrap up its inquiry, with another session set on April 12: "It's getting harder. Now it's stonewalling..."

"There might be a way to recover some [money], but I'm not too sure."


Banking industry officials said it may be "too soon" to check whether the heist -- deemed the biggest in the country's history -- has taken a toll on the cost of remittances, even as they admitted it was a concern.

"We have no evidence yet if it has affected cost of remittances in the country," Nestor A. Espenilla, Jr. deputy governor of the Bangko Sentral ng Pilipinas, said when asked by Mr. Recto if remittances have suffered "collateral damage."

"But having said that, the Philippines actually is experiencing increasing difficulty in terms of remittance flows because of perceptions of problems of a weak environment in the country in terms of anti-money laundering...," Mr. Espenilla noted.

"A situation like this could make it conceivably harder."

The central bank had earlier warned of some risks associated with the money laundering case, among them a possible credit downgrade and a return to the watch list of the international Financial Action Task Force, which could mean costlier borrowing and money remittances for Filipinos.

Officials from RCBC and Philippine National Bank said during the hearing that they have not raised remittance charges so far.

Source: Bworld Online