Seven launderers of the world | Inquirer Business

Seven launderers of the world

/ 12:13 AM April 04, 2016

THERE—our beloved Anti Money Laundering Council, or AMLC—reportedly wanted to file criminal cases against seven individuals, as if they were the most wanted launderers in whole wide world.

The AMLC did not reveal their names to the public.


The “leaked” report from the AMLC could only fuel much anticipation for the next hearing of the Senate on the money laundering case.

It was the one involving $81 million stolen from Bangladesh, apparently passing through one of the 450 branches of RCBC as an electronic transfer, converted into cash in remittance company Philrem, and onward to the casinos.


The next hearing would be the fourth to be held by the Senate blue ribbon committee, turning the case into headline material here and abroad.

It seemed to me that, based on the hearings so far, the AMLC succeeded in diverting the heat away from itself in this money laundering case.

Yet we knew the AMLC hardly did its job as the police of money laundering.

Recently, the US State Department reported that the AMLC filed only 49 anti-money laundering cases in the past 15 years, or ever since the Philippines enacted the anti money laundering law in 2001.

It said the number of prosecutions and convictions had been “virtually nil.”

To divert the issue once again, the AMLC started to make a lot of noise over the “bank secrecy law,” saying Congress should amend it.

Surprise— Congress was no longer in session!


The AMLC has the bank secrecy law to blame for its lack of performance.

It so happened that in the Senate hearings, the same law became an issue—albeit to the benefit of the AMLC.

Senators were visibly irritated when they repeatedly asked RCBC lawyer Macel Fernandez-Estavillo regarding “details” of the bank accounts that were supposedly involved in the case, who, of course, invoked—what else— the bank secrecy law.

Obviously, the senators were trying to get info on the liability and responsibility of the AMLC in the case.

Remember, the AMLC prematurely filed a criminal case against the RCBC bank manager allegedly involved in the case, precisely, to keep her quiet.

Anyway, Sen. Juan Ponce Enrile gave one sobering remark: The Senate did not have the power to lift those laws, which belonged to the court, because the court would have to determine that the opening of the accounts was justified under the law.

Under the law, banks must treat “foreign currency deposits” with absolute confidentiality, but not so much for “peso deposits.”

The law allows examination of “peso deposits” upon written permission of the depositor, or cases of impeachment, bribery, and dereliction of duty of public officials, and cases in which the deposit is under litigation.

For foreign currency deposits, however, only the AMLC can justify the opening of concerned account.

Under the AMLC rules, the government guarantees, as a matter of policy, the confidentiality of dollar bank accounts.

By the way, the issue on whether the senators could demand the info from the RCBC lawyer could be likened to the dispute in the United States between the FBI and Apple.

The FBI wanted to gather evidence against a suspect in a deadly shooting, so the FBI wanted Apple to reveal to the authorities how to break the “encryption” in the i-Phone of the suspect. Apple refused, citing the privacy right of the individual.

From the bits and pieces of info coming from the Senate hearing, one good question started to make the rounds in social media.

That was, can the authorities file criminal cases against bank employees, but leave the banks out of the cases. Or, for that matter, can banks even file criminal cases against its own employees without incriminating themselves?

Based on the opinion of those following the hearings, it was advanced that for every erring employee that commits a crime, there must be a negligent company, i.e. the employer.

But wait a minute there—a couple of famous cases in the US actually involved “rogue” employees in major companies.

In 2012, for instance, an employee of Morgan Stanley orchestrated a criminal “scheme” that netted him more than $3 million, so the authorities charged him with bribery and securities fraud. Surprise—the authorities did not file charges against Morgan Stanley, as the bank had proven it had imposed wide-ranging rules and policies, including intensive training for personnel, precisely as precaution against such violations done by its own people. In other words, the crime did arise, but the US authorities did not blame Morgan Stanley for it.

Another case happened in Bechtel Power Corp. about two years ago in 2014, when an executive defrauded the company. The US government also did not file charges against Bechtel. Why? The authorities concluded the company had strict internal rules, plus the detailed monitoring systems to find out if its employees followed the rules.

There—criminal minds would always find ways to go around the rules. Rogue employees were simply “rogue” employees, period.

That was why companies could invoke the defense that they did everything to supervise their employees to do right.

It would be another story if the management actually abetted the wrongdoing.

If not, I could see those firms as more of “victims” of criminal syndicates that tried to penetrate their security systems.

At the same time, former Finance Secretary Roberto de Ocampo, now chair of Veterans Bank, suggested that the Senate hearings should be held behind closed doors.

De Ocampo’s position was that the country needed to “protect the good reputation of its banking system.

For instance, in the “global competitiveness index” of the World Economic Forum, which ranked 140 countries on various aspects of their economic developments, the Philippines landed at 47th place in the category “soundness of banks.”

In comparison, in the category “burden of government regulation,” the Philippines ranked No. 101, and in “quality of infrastructure,” at No. 106—out of 140 countries.

De Ocampo said the local banking system was recognized as one of the best in the region, with BSP Governor Armando Tetango even winning the accolade—more than once–as “central bank governor of the year.”

He added: “Even the embattled RCBC is among our most reputable banks and has served the public well over many decades.”

Unfortunately, the Bangladesh heist and the money laundering case involving RCBC had become a “global spectacle.”

Result: Even before any proof of any allegation in the case could be determined, Philippine banks were already paying the price of bad press in their remittance operations abroad, which of course would be bad news for the roughly 12 million OFWs.

The money laundering case actually started outside—i.e. in Bangladesh and in the United States—and De Ocampo noted it was limited to one branch of one bank.

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TAGS: AMLC, Anti-Money Laundering Council, bangladesh, Bank, Business, launder, laundering, money laundering
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