AMLC hits PhilRem with money laundering raps

The Anti-Money Laundering Council (AMLC) filed money laundering complaints against PhilRem Service Corp. before the Department of Justice on Thursday.

The council accused the owners and top officials of the remittance firm of money laundering as spelled out in Sections 4(a), (b), and (f) of the Anti-Money Laundering Act, as amended.

The accused were PhilRem President Salud Bautista, Chairman of the Board and Treasurer Michael “Concon” Bautista, and PhilRem Anti-Money Laundering Compliance Officer Anthony Pelejo.

The Bautistas – husband and wife – are the owners of PhilRem.

The case involves the illegal transfer of  $81-million Bangladeshi funds to the Rizal Corp Banking Corp., the council has noted in its 17-page complaint-affidavit

The AMLC cited the unauthorized access to the Bangladesh Bank’s system amounted to “hacking” or “cracking,” punishable under Section 33 (a) of the Electronic Commerce Act.

The stolen funds were credited to fictitious bank accounts under the names Michael Cruz, Jessie Christopher Lagrosas, Alfred Vergara, and Enrico Vasquez, which were all opened on May 15, 2015, the AMLC said.

Fictitious dollar and peso accounts of William So Go were opened on February 5, 2016 and July 30, 2014, respectively, were also involved. All bank accounts were maintained at the RCBC Jupiter Business Center Branch in Makati City.

Go denied owning those peso and dollar accounts and sued the RCBC Jupiter branch manager and the senior customer service representative.

Of the stolen Bangladeshi funds, $65,668,664.37 was withdrawn from the Cruz, Lagrosas, Vergara, and Vasquez accounts on February 5 and 9, 2016, then transferred to the “Go/Centurytex” account, according to the AMLC complaint.

Eventually transferred to PhilRem

The complaint also detailed how the stolen funds were eventually transferred from the RCBC Jupiter branch to PhilRem.

From the $65,668,664.37, the AMLC noted $13 million was transferred to the RCBC account of Abba Currency Exchange Inc., on February 9.

On February 5, 9, and 10, the balance of $52,668,664.37 in the Go account was transferred to the PhilRem account at RCBC-Unimart Greenhills.

On February 9, $15,215,922.26 from the Vasquez account was also transferred to the PhilRem account at RCBC-Unimart Greenhills.

On February 11, 2016, Abba Currency and Beacon Currency Exchange Inc. transferred $10 million and $3 million to a separate PhilRem account at RCBC-Pasig branch.

The funds transferred by Beacon Currency came from Abba Currency.

In total, $61 million was eventually converted and transferred to PhilRem’s peso account at the RCBC-Unimart Greenhills branch, according to the AMLC.

Suspicious transaction report

On February 17, 2016, compliance officer Pelejo submitted a suspicious transaction report (STR) indicating that $80,884,641.63 had been remitted to Solaire Resort and Casino, Eastern Hawaii Leisure Co. Ltd., and one Weikang Xu as instructed by a certain “William Go.”

The fact that Kim Wong received funds from PhilRem but was omitted from the STR narrative submitted by Pelejo made the compliance officer liable to breaking the Anti-Money Laundering Act, according to the council.

The AMLC emphasized that PhilRem was responsible for practicing the “Know Your Customer Rule” and keeping identification records when it dealt with Go in whose supposed account a large part of the stolen funds were transferred.

“What is highly irregular was that respondent spouses claimed that they were dealing with Branch Manager Deguito, and not the ‘owner’ of the account, ‘William So Go,’” the complaint read.

Maia Santos-Deguito was the RCBC Jupiter branch manager who supposedly instructed PhilRem regarding the money transfers involving the stolen funds.

'Contrary to business practice'

“It is contrary to business practice that a person would deal in large amounts of money with someone who is not the owner of the account, nor someone who was duly authorized by the owner,” the AMLC noted.

PhilRem officials were clearly aware that the funds were not legitimate when they deliberately ignored the mandated requirements on KYC and record keeping of customer information, the AMLC noted.

“Had they done so, respondent spouses would have personally interviewed the real William Go and discover that that the latter was not aware of the existence of the RCBC Account Nos. 9016455240 and 9010270206,” the complaint read.

PhilRem actually commingled the stolen funds and acted as “cleaning house,” making it extremely difficult to trace the source and flow of the funds by “washing” the funds and concealing the money trail, the AMLC emphasized in alleging the culpability of the company.

AMLC said the services of PhilRem was actually unnecessary because the funds could have been directly transferred from the bank account of “Go” to the bank accounts of the beneficiaries, but that would have been easily prevented or tracked within the banking sector.

The respondents continued to possess more or less $17 million of the stolen funds remitted through their company and failed to account for its alleged delivery to Weikang Xu, the council claimed. – VDS, GMA News