With one pawn call
AFTER five sessions in the long-running Senate hearings on the alleged laundering of money stolen from the Bangladesh central bank, a big question remained dangling: Where was all that money?
From the looks of it, the Bangladesh government seemed to be relying on the Philippines— meaning, the government and the private sector—to retrieve the entire $81 million.
That would be more than P3.7 billion. Its officials reportedly would not accept the money that the Bautista couple, owners of remittance firm Philrem allegedly involved in the laundering, and casino junket operator Kim Wong volunteered to return to the Bangladesh central bank.
Did you really see it coming, that their government would take the Philippines to task in producing the entire amount, with Philippine authorities forcing Philrem and the casinos, or perhaps even RCBC, to fork out the entire P3.7 billion?
Word went around that the Bangladesh central bank already took the position that the remittance of $81 million was fraudulent and thus, it should not have been allowed under Philippine laws on anti-laundering.
From what I gathered, the gist of the legal position of the Bangladesh central bank was that it would insist that the funds were released by the New York Federal Reserve Bank illegally. Meaning, it had nothing to do with the alleged fraud.
Such a stand would point to one and only one thing: It was the lookout of the Philippine side.
Never mind that the finance minister of Bangladesh, A.M.A. Muhith, admitted in an interview with the biggest daily in that country that the heist in the central bank was a hundred percent inside job.
Reports in Bangladesh indicated that, after the central bank’s IT expert talked to media about the lapses in its security systems, his family went to the police to report that he went missing.
The reports also noted that SWIFT instructions to New York needed biometric information, such as the handprints of six —again, six—officials of the Bangladesh central bank that would be almost impossible to duplicate.
SWIFT would be the Brussels-based Society for Worldwide Interbank Financial Telecommunications, and its chief executive in Asia, Alan Raes, announced that its system was never hacked in the Bangladesh case. Raes said its 3,000 or so members of financial institutions worldwide also had the responsibility to ensure safety of their transactions.
Uh-oh, that should be the Bangladesh central bank.
Also, word went around in business—even among bankers —that our own Bangko Sentral should impose stiff fines on the institutions allegedly involved in the laundering case, including RCBC as one of the biggest universal bank in the country.
For her part, Maia Deguito, the dismissed manager of the RCBC branch that was said to have figured prominently in the case, declared in the Senate hearings that she was just “a pawn in a high-stakes chess game played by giants in international banking and high finance.”
All of that was of course possible, for how would a lowly branch manager, the head of a unit handling huge sums of money, actually figure in such an international crime?
But then again many cases here and abroad would reveal the growing threats of frauds and ordinary thievery in the banking system involving tellers and branch officers.
In a high profile scam case in the Philippines, for instance, which even came out in this newspaper only four years ago in 2012, the DOJ filed 87 counts of qualified theft case against a former executive of Citibank.
The DOJ alleged that the executive embezzled over P100 million from bank clients, as he took advantage of his position of trust and confidence to transfer funds, withdraw cash and issue managers checks, all the time using the accounts of clients.
And he did them without the consent of the bank and the clients.
A report of ABS-CBN noted that one client alone lost P10 million from his time deposit after the Citibank executive forged his signature, and he even changed the address of the client so that bank statements would not reach him.
In its internal investigation, Citibank actually found out that the executive promised much higher interest for time deposits and higher referral fees to clients, using the scheme to attract more funds under his care.
The bank found out that he maintained an extravagant lifestyle, such as sporting different pricey wrist watches, using the account of one client to pay for them.
And abroad? Well, in New York, the New York Times just recently had this to report: “Though much of the focus on bank fraud has been on sophisticated hackers, it is the more prosaic figure of the teller behind the window who should worry depositors, according to prosecutors, government officials and security experts.”
“It’s a rampant problem,” the paper quoted Brenda Fischer, chief of the Cybercrime and Identity Theft Bureau for the Manhattan district attorney’s office, as saying. The Manhattan prosecutor’s office estimates it brings at least one case against a teller per month. Last year, a teller was sentenced for her role in an identity theft ring that pilfered $850,000 from bank accounts, who even spoke in code about potential bank targets, referring to TD Bank as “touchdown” and JPMorgan Chase as “Yase.”
In 2014, a former teller at a Capital One branch in Maryland was sentenced for emptying some seven accounts, by passing customer information to a “co-conspirator” that in turn drew funds from the accounts. Other cases across the US last year included a former Pennsylvania teller sentenced for withdrawing money from accounts; a former Manhattan teller sentenced for using information to receive tax refunds that he routed to himself; a former Connecticut teller who took cellphone photos of account information, and used that to cash fraudulent checks, and a former Virginia credit-union teller who took out loans from the union in customers’ names.
The money she stole ultimately led to the credit union’s collapse. Other lower-level employees who work at bank branches may have too much access to customer information, the report also quoted the prosecutors as saying.
It said that prosecutors in Brooklyn obtained indictments against two bankers who worked at retail locations of JPMorgan Chase in the borough, saying they withdrew roughly $400,000 from accounts through fake ATM cards and in-person withdrawals.
The report said that, in Chicago, a teller jumped from Washington Mutual to LaSalle Bank before he was caught, withdrawing over $2 million along with his co-conspirators, as they rerouted customers’ addresses to mailboxes they controlled, created driver’s licenses in customers’ names to open credit cards, and even created fake businesses so they could buy credit-card terminals.
And they themselves approved the fake charges that they made on customers’ accounts.
The report added that tellers and employees could gain access to a customer’s information with a few taps of a keyboard and that they were the ones at the centers of the schemes.
In other cases, the thieves merely bribed the tellers to hand over personal data that they use to drain money from accounts and make debit cards, checks and credit cards in customers’ names.
As the New York Times put it, in the midst of the rising cases of identity theft and foreign cyber attacks, a growing threat could just be around the corner —or could be sitting just on the other side of the counter.
They were certainly not merely pawns.
