Thursday, March 24, 2016

The money laundering scandal

Latest summary at the Manila Bulletin

some of the money was laundered via a Chinese immigrant who runs a casino.

Unknown hackers breached the computer systems of Bangladesh Bank in early February and attempted to steal $951 million from its account at the Federal Reserve Bank of New York, which it uses for international settlements.
Some attempted transfers were blocked, but $81 million wound up in the Philippines.
more at the Phil Star
 most of the money has disappeared/ been withdrawn and only 2 million left in the account.

The background of this is that the local Catholic bishops are unanimous about opposing the building of casinos, partly because they are often associated with crime/drugs and prostitution.

update: The scandal has even hit the Economist (behind a pay wall).

more HERE.

Do you know, dear reader, that the AMLC’s is authorized to investigate a transaction amounting to just P500,000, with its computer systems designed to alert its staff to such amount of transactions? Yet $81 million  entered a single bank—in a single branch, in a single day—equivalent to P4 billion, deposited to dormant accounts, and then withdrawn,   yet the AMLC didn’t notice it. I don’t think even  P1 billion had ever entered a bank’s branch ever. It had to take a person-to-person call from the Bangladesh Bank governor to BSP Gov. Tetangco, the AMLC chairman, to alert him that such a huge stolen amount was entering the Philippine banking system. Yet the  AMLC started to work on the Bangladesh Bank governor’s alert on Feb. 3, according to its executive director, Julia Abad in her testimony in the Senate. It issued the freeze order a week later on Feb. 11. The criminals obviously had the time to withdraw the proceeds, and these have vanished into thin air.
Contrast that to Sri Lanka’s successful interception of the $21 million from the same heist that entered its banking system. Sri Lanka has more efficient regulatory bodies than ours?Aargh. - See more at:
not in the news: Where were the original hackers? This had a New York bank connection: What bank and what type of security did they have?

The NYTimes says the Philippines is to blame because our confidentiality laws are sooo strict.

MANILA — It is a financial whodunit for the digital era: More than $80 million of Bangladesh’s money vanished last month after it was electronically transferred out of that country’s account at theFederal Reserve Bank of New York.
Oh that makes me feel a lot better: The Federal Reserve Bank of New York missed the headsup that someone was moving a lot of money around.

But of course, it's the USA, so no one was bribed to look the other way, unlike the Philippines, where corruption is normal.

Again the NYT:
Specifically, they point to the country’s increasingly flush casino industry, which is exempt from many of the anti-money-laundering requirements in the Philippines. 

So why aren't casinos included in the anti money laundering requirments? Politics. Oodles of gifts to the politicians who arrange for casinos to be built. and Binay has shrugged over vote buying:

Take the cash because it is government money, but vote for the candidates of your choice anyway.
This was the advice Vice President Jejomar Binay gave his supporters in Barangay San Andres, Cainta, and Angono, Rizal, on Sunday.
“My appeal to you is, do not embarrass them. Take it, that’s money from the country’s coffers. As we say in Makati, take the money, put it in your pocket, but vote for whom you want,” said Binay, who is facing multiple corruption allegations from his time as Makati City mayor.

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