POSTSCRIPT / April 24, 2016 / Sunday

By FEDERICO D. PASCUAL JR.

Opinion Columnist

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Senate quiz on $81M scandal laundered?

WHEN SEN. Serge Osmeña banged the gavel last Tuesday to suspend the sixth hearing of the Senate Blue Ribbon committee on the $81-million money laundering scandal, it was not clear whether the inquiry would proceed to a roaring conclusion or simply fade out in a whimper.

By all indications, senators – especially committee chair Teofisto TG Guingona III — have gone cold on the hearings. In fact, he has made himself scarce, seemingly avoiding media questions as to when the hearing will resume. Has the probe itself been laundered?

With no assurance of further hearings, the public feels cheated. This is the impression of many viewers, myself included, avidly following the telenovela-like hearings involving a daring cyber heist, a bank manager who facilitated the transfer of millions of dollars to a mysterious remittance company, which then claimed it delivered everything to the casinos.

Based on the testimonies so far, lawmakers and the public are far from getting the real score behind the biggest cyber-heist ever pulled in the Philippines.

It is bordering on the ridiculous how Philrem Services Corp. – the money remittance firm which handled the transactions and released the funds – has been allowed to make a mockery of the Senate proceedings through what look like lies and inconsistencies as pointed out by no less than Guingona the chair.

Who is Philrem (and its powerful clients) and why is it being treated with kid gloves? Even the sudden stop to the committee hearings could only benefit this company.

Squirming for answers to even the simplest questions like their accountant’s name, it is obvious that Philrem owners Salud and Michael Bautista are hiding something. They have everything to gain should the Blue Ribbon committee stops dead on its tracks.

It remains a big mystery to this spectator why, up to this point, all major protagonists have been charged with money laundering by the Anti-Money Laundering Council except Philrem despite its clear and indispensable role in the scam. What gives?

Many bankers and legal experts we have talked with are one in saying that there are very clear statutory grounds to make Philrem accountable. Problem is, the AMLC seems oblivious to these laws, which leads one to wonder if they are blind or protecting someone.

Will Philrem be able to get away with it?

THESE experts cite major points that, to them, can make Philrem liable:

1. Philrem is a “covered institution.” — Section 3(a)(1) of the Anti-Money Laundering Act, as amended, covers “… money changers, remittance and transfer companies ….” Philrem officers have repeatedly testified before the Senate that it is a remittance company, making it a covered institution and, therefore, subject to the same strict AMLA rules.

2. Philrem violated the Know Your Client (KYC) Rule. — Rule 9.1.a of the Revised Implementing Rules and Regulations (IRR) of AMLA states that “Covered institutions shall establish and record the true identity of its clients based on official documents.”

Philrem is thus required to identify Enrico Vasquez (one of the five fictitious account holders supposedly created by former RCBC bank branch manager Maia Dequito) and Centurytex owned by William Go as its clients and require them to submit original documents of identity issued by an official authority, bearing a photograph of the customers.

Philrem is likewise required to check whether Dequito – as “agent” of the account holders – was fully authorized to transact on their behalf. Philrem did not ascertain in what capacity she acted when she gave instructions, over the phone, to make the transfers. The remittance firm also failed to determine the relationship between Dequito and Philrem’s clients Vasquez and Centurytex.

3. Philrem acted as a money changer without a license. — Section 1 of Circular No. 471, Series of 2005, of the Bangko Sentral ng Pilipinas states that institutions acting as money changers are required to register with BSP before they can operate as such.

While Philrem insists that it is only a remittance company, the transactions reveal that it also acted as a money changer as it withdrew money in dollars and released them to the beneficiaries in Philippine pesos.

4. Philrem commingled the funds and acted as “Cleaning House.” – By such sleight of hand, it made the source and flow of the funds extremely difficult to trace. The transfer to Philrem was apparently meant to “wash” the funds, blurring the money trail. The funds could have been directly transferred to the beneficiaries.

Transfer of funds within the banking system can be easily tracked. Hence, the services of Philrem, though unnecessary, was required presumably to clean the money and make it difficult, if not impossible, to follow its movements after the commingling of funds.

Despite what appear to be violations, and after more than two months since the crime was committed, the AMLC has not lodged a single case against key player Philrem. And by all indications, it is not inclined to do so.

Thus, the Senate Blue Ribbon committee is the only body left that could recommend the filing of charges. But with no official closure to the hearings, there would be no committee report, and thus no recommendation to legally prosecute those it may find to have violated anti-money laundering rules.

(First published in the Philippine STAR of April 24, 2016)

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