Forfeiture of laundered money
BANGLADESH Ambassador John Gomes must have felt very bad upon learning that a court order is needed before the $4.63 million and P38.23 million that businessman Kim Wong turned over to the Anti-Money Laundering Council (AMLC)—which form part of the $81 million stolen from Bangladesh Bank—can be returned to his country.
The money was counted in his presence before it was placed inside a vault of the Bangko Sentral ng Pilipinas. Two Bangladesh Bank officials even came to the country to expedite the return of the funds to their coffers.
According to reports, arrangements had already been made for the money to be deposited in a foreign bank with a Philippine office and for the latter to wire-transfer it to Bangladesh.
Close, but not close enough. Bangladesh has to await the result of the civil forfeiture case that AMLC will file in court to authorize it to give to Bangladesh the money returned by Wong.
Although it was apparent from the evidence presented that Bangladesh owns the money and, under normal circumstances, should be allowed to take custody over it immediately, AMLC’s hands are tied.
It has to comply with the procedures laid down in the Anti-Money Laundering Act on the forfeiture of monetary instruments and properties that are involved in or related to money laundering offenses.
Executive
In 2005, the Supreme Court, upon the request of AMLC, issued the Rule of Procedure on Civil Forfeiture that spelled out the manner by which assets or properties linked to money laundering can be frozen, confiscated and forfeited in favor of the State or to whoever may be entitled to them.
The AMLC is the only government office authorized to file civil forfeiture cases and it has to do it in the name of the Republic of the Philippines, with the Solicitor General acting as its lawyer.
Unlike ordinary civil cases, civil forfeiture cases have to be filed directly with the executive judge of the regional trial court where the subject property is located. The standard procedure of raffling off cases among the judges assigned in a judicial region is not applied to civil forfeiture cases in order to maintain their confidentiality.
This measure, plus the requirement that the case shall be recorded in a separate logbook under the custody of the executive judge, is aimed at avoiding the leakage of information to unauthorized parties that may jeopardize the objective of the proceedings.
Except for some minor changes, the procedures to be followed in the hearing and resolution of civil forfeiture cases, including the quantum (or degree) of evidence needed to grant or deny the forfeiture, are the same as ordinary civil cases.
Third party claim
The rules, though, have made allowances for the possibility that third parties, other than the State, may also have rights over the subject assets.
Thus, after the court has issued an order of forfeiture, any person who was not included in or notified of the suit but believes he has a legitimate claim to the assets may file a petition for intervention within 15 days from the date the order became final.
After citing the basis of his claim, the petitioner can ask that the assets be turned over to him, or certain portions be segregated or excluded for his benefit. The AMLC is obliged to give its comment on the petition.
However, if at the outset the judge thinks the petition is insufficient in form and substance, or was filed only to delay the proceedings, he may dismiss it outright.
As soon as all the issues in the case have been resolved, the judge can issue the final order of forfeiture in favor of the State (in whole or in part) or a third party who has established a clear right over any portion or all of the assets.
Although the rules have made provisions for the speedy resolution of civil forfeiture cases, the actual length of their disposition will still depend on the work schedule of the lawyers of the contending parties and the case load of the judge.
Consequences
Going back to the Bangladesh money laundering case, Wong is not yet in the clear even after the money he turned over to the AMLC is ordered forfeited by the court in favor of the State and eventually Bangladesh.
The forfeiture case covers only the civil aspect of the money laundering incident. Its criminal aspect, to which he has been implicated, still has to be threshed out in the Department of Justice and possibly in the courts.
Not to be overlooked is the tax obligations that Wong may have incurred in his dealings with the Chinese gamblers who were the source of the money.
A case can be made that the $4.63 million and P38.23 million sought to be forfeited constitutes income to Wong or his company for which the appropriate income tax has to be paid.
The forfeiture of that money in favor of the State or Bangladesh, if it pushes through, does not change the fact that it once formed part of Wong’s earnings and therefore subject to income tax.
Hopefully, when the forfeiture case is filed in court, no lawyer will come out of the blue to file a third party claim on behalf of the Chinese gamblers from whom the money was sourced.
If that happens, and the court, for one reason or another, allows its consideration in the name of “due process”, the country’s judicial system will be the laughing stock of the world.
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