Dirty and clean – Monday, 21 March 2016

Twas midway through President Aquino’s term when a coffee shop talk with a broker revealed to this rubbernecker how money used in smuggling is laundered in casinos.
She claimed transactions are almost always done in restaurants, even parking lots, the most favorite being the newer and vast hotel and casino franchise somewhere South of Metro Manila.
Smugglers or their conduits then buy chips in bulk to launder their money. They play some — can even afford to lose some — and then leave with the clean cash after the remaining chips (still in bulk) have been returned and exchanged back to crisp bills.
A very easy way to make money clean again, she said.
Our conversation took place at the height of the garlic smuggling issue, one of the many that tainted the administration of President Aquino.
So, it was no longer surprising when the big Bangladesh $81-million bank heist found its way snaking through the vulnerable financial processes of Bangladesh to New York and then to the Philippines.
That the hackers had nearly completed the crime unnoticed was troubling as even the Federal Reserve Bank of New York had been duped in the transactions, which occurred on the weekend days when all banks on the many sides of the world were closed.
The New York Fed claimed its systems have not been breached, but cyber security experts brought in by the Bangladesh central bank suggested that “footprints” were left by hackers that may prove their systems have been compromised.
They claimed the hackers came from outside Bangladesh, with subsequent reports claiming the hackers could have originated from China and with contacts and conduits in the countries where the money flowed until it reached the Philippines.
The hackers have tried to steal $1-Billion from the Bangladesh central bank, mostly money from its overseas contract workers and workers in the country’s prime garment industry. They have succeeded in slinking just a tenth of it.
The pilferers then saw the Philippines as a safe route with the RCBC being used to transfer a total of $81-million. RCBC officials, including the branch manager who is now being pinned down as among, if not the sole, contact of the hackers’ group, are now being quizzed in the Senate.
A fifth of the amount was held in Sri Lanka after the transfer of $20 million was spotted after a misspelling of the Shalika Foundation (misspelled as Fandation) alerted the routing Deutsche Bank, to seek clarification from the Bangladesh central bank, which stopped the transaction.
The money with the RCBC, meanwhile, was transferred to an account owned by Filipino-Chinese businessman William Go, who was said to have cleansed them in Philippine casinos.
The crime has exposed not only the loopholes in Philippine laws despite the creation of the Anti-Money Laundering Council (AMLC), but also the weaknesses of the world banking system.
That the crime had nearly been executed perfectly if not for the misspelled foundation name revealed the vulnerability of the  world’s banking systems, especially since hackers are always several steps ahead of the technology they use to dupe and steal from others.
This issue has also compromised the strength and dependability of the Philippine banking system.
It does not help that we are still chasing billions from several politicians accused of illegally amassing wealth from the country’s coffers through various transactions, and yet here we are falling under the world’s finance systems spotlight. And in a bad light.
Suspicions that our local banks willingly act as conduit to dirty money have been bolstered with this failed multi-million dollar caper. But, as some in the Senate would like to find out, there are thoughts that the bulk of this illegal money transfer would not have stopped with the “mere” branch manager but even in some of the bank’s well-entrenched offices.
We will not know about that, yet, but our casino operators should also be poured over for us to know the extent of money laundering operations, which not a few sources know transpire within their windows days in and out.

Related posts