Money Laundering (RCBC) Case

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INTRODUCTION

The case talked about the money laundering case of Maia Santos-Deguito a former Rizal Commercial Banking Corp. (RCBC) branch manager and her appeal to her sentence of a maximum of seven years in prison with a fine of $109.5 million. Deguito was accused of laundering money over the 2016 Bangladesh bank heist (Buan, 2019). The appeal stated that the court gave the wrong penalty because of the misinterpretation of what constitutes money laundering under the Anti-Money Laundering Act.

ISSUES UNDERLYING THE PROBLEM

There are two issues, in this case, the first being the Anti-Money Laundering Act being open to interpretation, and the second is letting the act of laundering money happen because of the lack of standardized systems. The first issue of AMLA being open to interpretation is not an issue that this case focused on, essentially because of all laws having loopholes and every accused will find a reason to go against it and interpret it for their own gain. The second issue is the reason why the case existed in the first place. Upon researching the case, the opening of several dollar accounts by Deguito as testified by Echaluse was done by the accused without knowledge of the bank’s higher-ups. To be able to blatantly process money by Chinese hackers from the government of Bangladesh through the Federal Reserve bank of New York which the money is then withdrawn from dummy accounts to be gambled in casinos in the Philippines before being tracked by authorities (CNN, 2019) is a crime done because of lack of proper tracing in order to find abnormal patterns.

ALTERNATIVE SOLUTIONS TO THE PROBLEM

The solution to combat money laundering in extreme and small cases is to invest in technology; here are the following solutions that can be done by the banks and authorities:

Communication with the Authorities and the bank.

The fastest way to stop the withdrawal of the money being laundered so that the bank and authorities can freeze it is communication. The authorities must have a system that constantly asks for updates from the banks whenever there is weird or huge money being processed. This system must be automated and constantly updated by both parties.

Pattern Checker

This solution focuses on analyzing the movements of money and accounts. The pattern checker would look into the abnormality of movement in the accounts of the clients and the person in the bank involved with the client. Whenever there would be an abnormality, the pattern checker would notify the authorities and the bank.

Standardized System

This solution aims to find one system to be used in recording accounts. In this way, the bank can review patterns, and trace withdrawals, and the creation of dummy accounts quicker and evidence can easily be gathered to hold those accountable properly and recover the money before it will be lost.

CONCLUSION

The best solution to trace and stop money laundering as much as possible in big and small institutions is to standardize systems and have a backup in order to trace abnormalities in the patterns of the movement of money.

RECOMMENDATION

In order to have a standardized system, the first thing a company must do is choose the means of standardization (e.g. internet, excel, spreadsheets, developed application for tracking, etc.), the second step is to have seminars for the employees to understand the process and usage of the chosen means of standardization, the third step is to do a trial test while doing the existing method of recording to figure out what works better and if it is effective, the fourth step is to implement the system and coordinate with authorities for big businesses or cooperate with fellow small businesses, and the last step is to constantly do a maintenance check quarterly in order to gauge the effectivity and improve the processes that need to be improved.

REFERENCES

Buan, L. (2019, January 10). Rappler. Retrieved from https://www.rappler.com/
CNN. (2019, January 10). CNN Philippines. Retrieved from https://cnnphilippines.com/
Thomson Reuters. (n.d.). Thomson Reuters. Retrieved from legal.thomsonreuters.com

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