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By Melissa Luz T. Lopez, Reporter

Timing made $81-M heist ‘a perfect crime’

Posted on April 26, 2016

TIMING was the biggest element that made February’s $81-million cross-border bank heist “a perfect crime,” an expert said last week, with Bangladesh chosen as the unlucky victim and the Philippines -- a country known to have a chink in its armor in the fight versus dirty money -- the ideal place for laundering the loot.

Part of the $81 million stolen from Bangladesh and then wired to the Philippines is shown stuffed in a suitcase in this photo the Anti-Money Laundering Council e-mailed to journalists earlier this month.
Dante T. Fuentes, president of the Association of Certified Fraud Examiners-Philippines Chapter, said the heist was likely the fruit of meticulous planning of a “closely knit” group of less than 20 people, who likely set the scheme in motion more than three years ago but started doing their homework as early as 2008.

It was in that year that the Philippines was placed on the “gray” list of the Financial Action Task Force (FATF) due to an insufficient anti-money laundering/combating financing of terrorism system, as evaluated by the global watchdog’s regional associate, Asia-Pacific Group on Money Laundering, that had noted the exclusion of key industries such as casinos as well as other “strategic deficiencies.”

The country eventually left the watch list and, in 2012, narrowly averted reverting to that status after making what FATF deemed a “high-level political commitment” to address deficiencies in its law against money earned from crime. But the international body had then expressed concern that casinos continued to be unregulated.

“You need to have the resources to execute this -- you have to travel, you need to connect people,” Mr. Fuentes said in an interview last week in Makati City where he holds office as the chief compliance officer of Security Bank Corp. He is also president of the Association of Bank Compliance Officers, Inc.

The setup includes putting the accounts in place, tapping a remittance agent and finding players to gamble the money in casinos for a “seamless” process, Mr. Fuentes added.

“The timing was very important... Why it will take years -- you have to put in the machinery to work perfectly,” the anti-money laundering specialist explained.

“I will classify this as a perfect crime. The execution was perfect, like Hollywood... Only a brilliant mind can think of that.”

Discussing his theory on the bank heist based on his 15 years of work in the field, Mr. Fuentes said the key factor was timing.

The hackers took advantage of the difference in time zones to find the perfect window to send the funds on Feb. 5 to four accounts with Rizal Commercial Banking Corp. (RCBC) that were opened using fictitious identities.

The payment orders were made at 12:51 p.m. in New York and received in the Philippines at 2:51 a.m. Friday, leaving no time that day for authorities in Bangladesh -- which is 10 hours ahead of New York -- to immediately block the transfers as the country follows a Sunday-Thursday work week.

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The bank accounts were opened in May 2015 and left idle until the remittances flowed in from the Bangladesh Bank’s account with the Federal Reserve Bank of New York.

This was followed by a series of fund transfers and cash deliveries by a remittance company to course the dirty money to Philippine casinos, where the trail ended.

The Senate is conducting a public inquiry into the case, alongside separate investigations by the Anti-Money Laundering Council (AMLC) and the Bangko Sentral ng Pilipinas (BSP), as well as an internal probe by RCBC itself.

The heist has since resulted in the dismissal of branch manager Maia Santos-Deguito, who allegedly opened the accounts in question and ordered the fund transfers despite freeze requests sent by Dhaka officials, the resignation of RCBC Treasurer Raul Victor B. Tan, and a leave of absence for bank president Lorenzo V. Tan.

Junket operator Kam Sin Wong, who got hold of some $21 million of the funds through his casino firm Eastern Hawaii Leisure Co. Ltd., has also turned over about $10 million to the AMLC, representing portions of the loot left with him. He has committed to hand over another P250 million (about $5.4 million) to authorities.

The AMLC has also filed money laundering raps against several key players identified so far, plus a civil forfeiture case on Mr. Wong’s surrendered money that will pave the way for their return to Bangladesh

Sen. Sergio dl R. Osmeña III, vice-chairman of the Senate Blue Ribbon Committee, said returning some $30 million-$34 million to Bangladesh may be doable.

However, adjustments to the anti-money laundering law are stalled for now despite the incident, as the government is in the middle of a change in leadership with the elections only two weeks away.

But Mr. Fuentes said the bank heist may not have been made for the sake of hacking or theft; rather, it may have been orchestrated to compel Philippine authorities to address gaping holes in the country’s anti-money laundering law.

“If the heist was done by hackers, how come the hackers did not benefit from it?” he said, as international investigations have yielded no suspected masterminds.

“What can make you include casinos in the anti-money laundering law? You don’t have a basis, because for the past several years, everything was okay and nobody was complaining. Something has to happen for these (institutions) to be included,” Mr. Fuentes added.

“It is necessary that this should happen.”

More than accounting where the $81 million went, Mr. Fuentes said the case should prompt immediate tweaks to the law to beef up the country’s safeguards.

“There should be casualties,” he added.

“This will all come in vain kung walang mape-penalize (if no one will be penalized)... we have to do more than returning the money.”

Mr. Fuentes also cited moral obligations among banks to fortify their own internal policies.

The FATF sets international standards against money laundering and the financing of terrorism, placing countries in three categories: “grey list”, “dark grey list” and “black list.” A return to the watch list could mean higher borrowing costs for Filipinos, alongside heightened de-risking among offshore firms in dealing with Philippine firms.

Since its enactment in 2001, Republic Act No. 9160, or the country’s Anti-Money Laundering Act, has been subject to several amendments, but efforts to include casinos and real estate brokers have repeatedly failed. Such measures had been refiled in the 16th Congress, but have not come close to approval with only a few weeks left under the current administration.

Following the bank heist, senators have cited the urgent need to amend the AMLC charter, ease the country’s deposit secrecy law and hike penalties on erring banks, even as they admitted that these steps would have to be left for the next Congress to take.