Bangladesh heist exposes Philippine dirty money secrets

Yahoo – AFP, Karl Malakunas, 20 March 2016

The $81 million stolen from the Bangladesh central bank's American accounts

 last month was immediately sent via electronic transfer to the Philippines' 

RCBC bank (AFP Photo/Noel Celis)

When mystery hackers launched a stunning raid on Bangladesh's foreign reserves, a plot worthy of a John le Carre spy novel was sparked in the Philippines, exposing the Southeast Asian nation as a dirty money haven.

The $81 million stolen from the Bangladesh central bank's American accounts last month was immediately sent via electronic transfer to the Philippines' RCBC bank, with the thieves deliberately targeting their laundering location.

Maia Deguito, manager of the
RCBC branch in Manila's financial
district, attends a senate hearing
in Manila on March 17, 2016
(AFP Photo/Ted Aljibe)

The Philippines has some of the world's strictest bank secrecy laws to protect account holders, while its casinos are exempt from rules altogether aimed at preventing money laundering.

"The Philippines is very attractive (for dirty money) because our laws have gaping holes. It's easy to launder money here," Senator Sergio Osmena, who is pushing for stronger anti-money laundering laws, told AFP.

Still, if the thieves were to get away with their audacious heist, the money had to be moved quickly through the banking system and into the casinos.

And it did.

Authorities took four days to order a recall of the money.

But by then it had vanished -- leaving in its place a tale of death threats, bribes, shady business figures and a bank manager who could be the villain or a victim.

"I did not do anything wrong. If this is a nightmare, I want to wake up now," the manager of RCBC bank, Maia Deguito, told ABS-CBN television this week after authorities stopped her at Manila airport from trying to leave the country.

"I live everyday in fear."

Lorenzo Tan, RCBC president and chief executive

 officer, gives a statement during a senate hearing

in Manila on March 15, 2016 (AFP Photo/Noel Celis)

With authorities in Bangladesh and elsewhere bamboozled over who masterminded the cyber-heist, Deguito's role as manager of the bank that accepted and shifted the money has come under intense scrutiny.

She has accused the bank's president, Lorenzo Tan, of ordering her to move the money. He has fiercely denied the accusations.

Philippine senators who launched an inquiry this week into the affair are yet to determine whether she was a scapegoat or not, but are convinced she was not the mastermind.

"It's a big operation. This could not have been done out of the Philippines alone," Senator Ralph Recto said.

The Senate inquiry and another probe by the Philippines' Anti-Money Laundering Council have hit several major hurdles, including a security camera at the bank not working when the money was shifted.

Accusations and counter-accusations between Deguito and RCBC management have further confused investigators.

'Money trail'

A final roadblock has emerged at the casinos, with the money apparently vanishing in mountains of gambling chips and mysterious middlemen.

Julia Abad (R), deputy director of the anti-money laundering council, speaks

at a senate hearing in Manila on March 17, 2016 (AFP Photo/Ted Aljibe)

"Our money trail ended at the casinos," Julia Abad, deputy director of the anti-money laundering council, told senators Tuesday.

On February 5, the same day Bangladesh Bank was hacked, the money was sent electronically to four accounts in Deguito's RCBC branch in the financial capital of Makati, according to testimony to the Senate inquiry.

Those accounts appeared to have been set up solely for that purpose because they were done using aliases, the Senate inquiry heard.

After that, the bulk of the money was transferred into accounts of a local ethnic Chinese businessmen, William Go, who has since protested his innocence. He said his signature was forged to set up the accounts.

From there, the money was briefly held by Philrem, a foreign exchange brokerage.

Philrem President Salud Bautista told the Senate inquiry $30 million went to a man named Weikang Xu.

Maia Deguito, manager of the
RCBC branch in Manila's financial
district, confers with one of her
lawyers during a senate hearing
in Manila on March 17, 2016
(AFP Photo/Ted Aljibe)

He was described as a casino junket operator but senators have said they know little more about him other than he is of Chinese origin.

The anti-money laundering council said another $29 million ended up in Solaire, a casino on a glittering Manila bayside strip that the Philippines hopes will become one of the world's biggest gambling destinations.

That money was exchanged into chips but could only be turned back into cash after being played in the casino, its management told the Senate inquiry.

Another $21 million was sent to Eastern Hawaii Leisure, which runs a sparsely furnished casino with Chinese-only television in Santa Ana, a sleepy town in the far northern Philippines, according to the council.

Senator Osmena said the case was likely just the tip of the iceberg.

"This could have happened hundreds of times already," he said.

"We discovered this one only because someone complained. But normally, if a drug dealer from Burma (Myanmar) or China would send money here, no one would complain."