Category: Money Laundering

Introduction

The case presented depicts a money laundering case. Money laundering is the illicit practice of covering up the source of illegally acquired money bytransferring it through a complex sequence of banking transactions or business dealings. In an ambiguous and indirect way, the general scheme of this method returns the ‘clean’ cash to the launderer. Former Rizal Commercial Banking Corporation (RCBC) branch manager Maia Santos- Deguito is found guilty by the Makati Regional Trial Court on January 10 for money laundering. However, the RTC’s decision was appealed and asked for a motion for reconsideration by Deguito as she explains that there is no act of money laundering that occurs in her case. However, the motion for reconsideration was not granted.

Issues Underlying the Problem

This case primarily deals on the issues of money laundering committed by the former RCBC branch manager, Maia Deguito. The case has presented several facts with regards to the problem. The court found her guilty of laundering the $81 million from the Bangladesh Bank in the year 2016. However, she appealed the decision saying that there is no act of money laundering thus, she should not be punished for an act she did not do. She states that the judge only misinterpreted the definition of money laundering and at the same time, misunderstood the evidences found against her. Deguito asserted that no monetary instruments were used in her dealings and even no transactions of the suspected laundered transactions happened in the bank accounts. Deguito was also suspected for facilitating deposits and withdrawals of laundered money even though it exceeded the amount to be considered a covered transaction although she claimed that this does not directly mean to be from unlawful activities. Furthermore, she denied the evidences that she is aware about the illegal source of money. Nonetheless, Makati Regional Trial Court has accepted the testimony of the one who investigated the case and did not grant the appeal of Deguito to reconsider the decision of being guilty from the money laundering case.

Alternative Solutions to the Problem

There can be many ways to possibly fight against money laundering. Establishment of a more formal and stricter Anti- Money Laundering Policy can be done. Moreover, everyone must have sufficient knowledge about the different money laundering schemes that may happen. Through our knowledge, we tend to ask a lot of questions that may gear towards the truth and avoid illegal acts. One must also be mindful, watchful and use initiatives and common sense in such a way that no matter how small a certain suspected act of laundering, it should be investigated earlier to avoid it from getting complicated.

Conclusion

From the presented solution above, I can consider the most effective way to solve the problem is being watchful and the use of common sense. Everything will start from ourselves. People must have a mindset of being knowledgeable and curious at all times as this can be the foundation towards searching for the truth leading to eradicate illegal acts happening in our society today. Once we are curious, we tend to have a lot of questions and ensure that all of these are answered. In this way, we are able to investigate deeper and fuller and may report to the authority for proper actions such as the Anti- Money Laundering Council.

Recommendation

In order to reduce the cases of money- laundering in the Philippines, knowledge and education is one of its keys. Through educating others, people can gain sufficient information that lead to the avoidance of the occurrence of money laundering among them. Change starts with a small step. And one of the small steps that needs to be undertaken is obtaining knowledge on money laundering, its possible methods or schemes, probable solution and the laws that pertains to it. Through this, the humanity might achieve a world where money laundering cases will not continue to increase, be reduced and be avoided.

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

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