Unsolved heist of Bangladesh funds

Bangladesh Ambassador John Gomes has every reason to feel bad about the delay in the recovery of the $15 million that casino junket operator Kim Wong turned over to the Anti-Money Laundering Council (AMLC) after the $81 million heist of Bangladesh Bank unraveled.

More than five months have passed since unknown hackers tricked the Federal Bank of New York into transferring $81 million of Bangladesh Bank funds deposited in it to Rizal Commercial Banking Corp. (RCBC).

A portion of that money found its way to the accounts of two Chinese high rollers who later lost it in a gambling casino in Manila. Wong, who acted as their guarantor, was paid $15 million for his effort.

As he promised during the Senate investigation of the scam, Wong returned that money in the presence of Bangladesh diplomatic officials.

But the money could not be immediately turned over to Bangladesh because the law requires the filing of a civil forfeiture case in court before any money suspected to be a product of money laundering can be transferred to its lawful owner.

The forfeiture case filed by AMLC has been granted by the court. Bangladesh Bank can now ask the court to order ALMC to deliver to it the $15 million. Barring any legal hitches, this process may take one to two months to complete.

The biggest ever international banking heist perpetrated resulted in the dismissal of, and filing of criminal charges against, the manager and senior customer relations officer of the RCBC branch that was used as conduit for the stolen money.

Two RCBC top executives— president Lorenzo Tan and treasurer Raul Victor Tan—resigned even though an internal investigation showed that they were neither complicit nor negligent in the unauthorized bank transfer.

Although Wong returned part of the loot, he, together with the officials of the money remittance company that played a role in the scam, have been sued for violation of the anti-money laundering law.

In what may be considered a cruel twist of fate, the two senators who were actively involved in the investigation of the incident—Teofisto Guingona III and Sergio Osmeña III—lost their re-election bids.

To date, as far as the Philippine connection is concerned, the $81 million crime remains unsolved. Some $21 million of the funds filched from Bangladesh Bank still has to be accounted for.

According to AMLC, $15 million have been traced to Wong, $28 million to Solaire Casino, and $17 million are believed to be with Philrem Service Corp., which the latter has denied.

So where did the $21 million go or who has it? An amount of such magnitude cannot simply vanish into thin air.

Since it was part of the money that was wired to the Philippines, it could have been lodged in the account of another high roller, a gambling casino or a money remittance company.

In the face of this unresolved issue, there is a strong possibility that some of the people who testified during the Senate investigation were not truthful or did not say the whole truth.

The $21 million constitutes sufficient justification to keep some mouths shut or make people strictly observe the vow of “omerta” about its whereabouts.

One-third, or even less, of that amount can pay for the services of an astute defense criminal lawyer, create fictitious transactions to mislead investigators, persuade prosecutors to file criminal charges that are either defective or difficult to prove, or delay court proceedings until the witnesses are dissuaded from testifying through intimidation or financial persuasion.

It’s unfortunate that AMLC’s hands are tied as far as gambling casinos are concerned. Since they are not covered by the Anti-Money Laundering Act (AMLA), they cannot be compelled to open their records to determine if the $21 million or any part of it went to their coffers.

Any probe of that nature can only be done with the gambling casinos’ consent. No gambling operator who wants to remain in business would make that mistake.

Neither is it any easier for the search for the $21 million to be conducted in banks, financial institutions or remittance companies.

Although these entities are covered by the AMLA, the law does not allow a wild goose chase in them for suspected money laundering activities.

There has to be “probable cause” that the deposits or investments sought to be looked into are related to a money laundering offense or an unlawful activity to justify such action.

The bank secrecy law and the banks’ fiduciary obligations to their depositors make it difficult, if not impossible, for the banks to agree to any inquiry into their depositors’ accounts unless there is probable cause to warrant it.

These obstacles will remain unless the law is amended to put gambling casinos within the ambit of anti-money laundering rules and AMLA’s investigative authority on suspicious transactions is expanded.

Under these circumstances, it is reasonable to say that the prospects of Bangladesh Bank getting back $60 million of the money stolen from it are very good; it’s just a matter of time.

For the balance, it may have to brace itself for a long wait or, worse, not getting it back at all. Considering the length of time it took to enact the AMLA, it will take years before it can be amended to cure its defects.

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