THE recent $81-million money laundering scandal in the Philippines is a testimony to the dirty, hideous work that is hounding the banking community. It brought a darker shade of reality: that money makes the world go round.
Last February 4, hackers broke into Bangladesh Bank’s account at the Federal Reserve Bank of New York and laundered $951 million, some of which was transferred to the Philippines through RCBC bank.
Paul Bromberg, chief executive of Spectrum Asia, an investigative and gambling industry consultancy noted, “a good reason for targeting the Philippines could be the unusual situation where casinos have not been required to comply with the same anti-money-laundering regime that governs the banking system.”
According to Dr. Stephen Cutler, an international consultant on anti-money laundering, the $81-million scam may be the biggest fraud of its kind in Asia’s banking history. This led to a major outrage in the banking community, with Bangladesh officials putting the blame on the New York Federal Bank. The scandal resulted in Atiur Rahman, governor of the Bangladesh Bank, to resign from his post last Tuesday, March 15.
“They picked us to launder this money because our system is full of loopholes,” Sen. Sergio R. Osmeña III, chairperson of the Senate Committee on Banks, Financial Institutions & Currencies told the New York Times. The ongoing Senate probe on the money laundering scandal also highlighted a potential pitfall in the country’s booming casino industry.
In a report by Inquirer.net, Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr., who also chairs the Anti-Monetary Laundering Council (AMLC), said that the country’s current bank secrecy law is hampering the country’s fight against money laundering.
“When a case reaches the AMLC, that is when an investigation begins. So the incident has already happened. We need some kind of preventive measures. The prevention of this particular activity is being hampered by the very strict bank secrecy law,” Tetangco suggested.
This thriving sector was meant to rival other Asian gambling hubs, with its initial goal to attract large foreign investments to boost the country’s economic growth. While it can boost economic activities, the casino industry’s apparent exemption from the anti-money laundering law makes it vulnerable to felonious proceedings.
This is a wake-up call for lawmakers and business executives. With the rapid growth and prominence of the casino industry, the government must improve its oversight. (AJPress)
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