Cowed of silence

Just last Friday, the Bangko Sentral ng Pilipinas (BSP) instructed Metrobank to keep quiet, for the meantime, on the reported P900-million fraud perpetrated by one of its executives.

From what I heard, the BSP itself decide to abide by the code of silence, together with attached agency AMLC, the Anti-Money Laundering Council.

Perhaps the BSP preferred to wait for the hearing in the House of Representatives on the alleged fraud. Rep. Ben Evardone (PDP-Laban, Eastern Samar), chair of the committee on banks and financial intermediaries, filed a resolution calling for the investigation. So far there seemed to be no way to stop it.

The BSP thus would want to quiet things down, since nowadays remarks in the so-called social media, whether facts or fabrications, could be rather vicious.

Speculations for instance already went around on the amount involved in the fraud, putting it close to the annual budget of the republic or something.

Now, if it is true that the executive committed fraud in the past five years—undetected—it would also not look good for the BSP official in charge of bank supervision during those years.

He happened to be Nestor Espenilla, the newly promoted BSP governor.

The BSP anyway wanted to do things quietly. Years ago, for instance, it asked for the head of a top executive in an investment house that supposedly abetted government-owned DBP in the questionable P14-billion “wash sales.”

And so it was not as if the BSP actually cowed Metrobank into silence!

In fact, the bank already instructed its thousands of employees on how to handle the issue with their customers.

From what I gathered, nobody in Metrobank as a rule would ever volunteer to anybody some info on the case.

If you asked questions, they would give you consistent answers: A long time executive (30 years with Metrobank) acted on her own, used her executive position of trust to fool her co-employees, and took advantage of her technical knowledge to go around the control systems.

Besides, it was just an isolated case.

As the litany went, the bank was also as stable as ever, what with its P1.9 trillion in assets and some P18 billion in yearly income.

Well and good. Banks anywhere were always the targets of criminal minds—you know, the likes of American bank robbers John Dillinger or even our very Kuratong Baleleng gang!

It was simply the nature of the business that attracted criminals, with banks the only outfits holding mountains of cash for safekeeping in one place.

Lately, banks even became targets of cybercrimes, both big heists like the Bangladesh Bank money transfer, and small schemes like phishing in ATM accounts.

The belief that behind every erring employee who commits a crime is a negligent management, thus, may not hold true in every fraud case in the banking business.

In the United States, for instance, one employee of Morgan Stanley in 2012 pocketed some $3 million, but the prosecutors did not file cases against the company, because they determined that it actually instituted every conceivable control system.

In the past many other local banks had to deal with scams that were kept away from the public, such as the fraud done a couple of years ago by an executive of a foreign bank based in Makati.

But where was all that money in the Metrobank case that almost equaled the budget of the republic?

From what I gathered, Metrobank already identified some accounts in local banks, using the paper trail created in the scheme, opened under different names, most probably relatives of the executive.

Those accounts were in the watch list of the bank. Guess what—the account holders already tried to close them.

To recover the stolen funds in fraud cases, time would be of the essence. It was just that, in this country, the legal process of garnishment would normally take several lifetimes.

It seemed that the bank became the victim twice—first in the fraud and then in its attempt to recover the stolen funds.