The investigation into millions of dollars in heisted Bangladeshi government funds has turned its focus on a Philippines casino junket operator.
Last week, the Philippines Amusement and Gaming Corp (PAGCOR) claimed that $46m of the $81m that was unlawfully transferred last month from Bangladeshi central bank accounts in New York to a bank in the Philippines had ended up in the hands of local casino operators. Officials now say $30m in cash ended up in the hands of a local junket operator.
The Philippines Senate is conducting hearings into the scandal, and bank officials testified on Tuesday that the $81m was transferred to four accounts at the Rizal Commercial Banking Corp (RCBC) and later consolidated into a single account.
Around $30m was transferred to Weikang Xu – an ethnic Chinese of unknown citizenship with ties to the local junket industry – in a mix of US dollars and Philippine pesos. Intriguingly, the RCBC branch’s CCTV cameras weren’t functioning when the money was withdrawn.
Salud Bautista, president of foreign exchange broker Philrem Service Corp, said her firm was instructed by RCBC to transfer the $30m to Xu. Philrem transferred another $29m to a casino account at Bloomberry Resorts’ Solaire Resort & Casino in Manila, while a further $21m went to an account belonging to Eastern Hawaii Leisure Co, which runs a casino in the Cagayan Economic Zone Authority.
A Bloomberry spokesman told Reuters the $29m was deposited into a casino account under Xu’s name to purchase ‘dead’ chips, which can only be withdrawn as casino winnings.
BANKER PLEADS THE FIFTH
Maia Santos-Deguito, the manager of the RCBC branch that handled the $81m, repeatedly invoked her right against self-incrimination during questioning by senators on Tuesday. Senators noted that the Federal Reserve Bank of New York had issued a stop-payment order on behalf of the Bangladeshi bank on Feb. 8 yet RCBC had authorized the withdrawals the following day.
Philippine businessman William Go, whose name was on foreign currency accounts through which the heisted funds traveled, has claimed that the accounts were opened under false pretenses by Santos-Deguito without his knowledge.
Go’s lawyer went on to claim that Santos-Deguito asked for a meeting with Go on Feb. 23, during which she allegedly admitted opening the accounts under his name and offered Go $430k to close the accounts in a bid to cover up the transactions.
Santos-Deguito, who has claimed she’s being used as a fall-girl, was prevented from leaving the country last week after the Department of Justice issued a lookout bulletin order. Santos-Deguito was reportedly already on board an aircraft bound for Japan when officials escorted her off the plane.
CASINOS BRACE FOR NEW AML REQUIREMENTS
Philippine casinos aren’t subject to local anti-money laundering laws, and Julie Bacay Abad, executive director of the Anti-Money Laundering Council (AMLC) told the senate hearing that “the paper trail ends” at the casinos, leaving AMLC “at a dead end” in its pursuit of the stolen $81m.
The brouhaha prompted the head of the Philippine Securities and Exchange Commission to announce that she will push to end the casino exclusion from the AML laws. The Standard quoted Teresita Herbosa saying the scandal had demonstrated the need to “catch up with people doing such activity.”
The global Financial Action Task Force (FATF) is reportedly pressuring the Philippines to amend its AML laws to include casinos. Should the FATF not be satisfied with the Philippines’ response, it could move the country from its current ‘grey’ list status to the FATF blacklist, which would significantly raise costs associated with international financial transactions.
SUNCITY JUNKET LINKED TO SENATOR’S PRESIDENTIAL CAMPAIGN
In unrelated news, the Daily Tribune recently accused Philippine Senator Grace Poe of accepting 150m pesos (US $3.2m) in presidential campaign contributions from a local subsidiary of Macau junket operator Suncity Group. The donations were issued last year in three cash vouchers, at least one of which reportedly bears Ms. Poe’s signature.
Poe has denied receiving any such contributions, which could violate local campaign finance rules. Suncity, which operates VIP rooms at both Solaire and Melco Crown’s City of Dreams Manila and manages the Cagayan Suncity VIP Club, has also disavowed any knowledge of the alleged payments.