MANILA, Philippines—Gambling lords have found “creative methods” of laundering billions of pesos generated by their illegal operations in the country, a lawyer of a late suspected jueteng operator said Sunday.
The methods range from auctioning off paintings in Singapore to moving funds through the underground “Binondo Central Bank,” Ferdinand Topacio said.
Topacio said operators of the illegal numbers racket were buying multimillion-peso artworks of up and coming Filipino painters to launder jueteng money abroad.
“For some reasons, the works of young Filipino painters have recently captured the interest of foreign art collectors,” he said in an interview with the Inquirer.
He said gambling personalities would use trading companies to buy paintings of promising Filipino artists before putting them up for sale at the renowned Christie’s auction house in Singapore.
“Jueteng operators found this opportunity to safely launder profits from their nefarious activities without catching the suspicion of authorities,” Topacio said.
Jueteng generates P30 billion in gross receipts annually, according to Sen. Miriam Defensor-Santiago. Santiago delivered a privilege speech on Sept. 22 that listed the jueteng operators in Regions 1 to 5 and their daily receipts, and the share of the revenues that goes to government officials as payoffs.
The previous day, retired Archbishop Oscar Cruz gave the Senate a list of jueteng operators and beneficiaries that showed that Interior Undersecretary Rico E. Puno had been receiving up to P8 million a month in jueteng payola since July.
The Bureau of Internal Revenue joined the fray, saying the agency will look into the lifestyle of the suspected jueteng operators.
Being a lawyer of the late Batangas Gov. Armand Sanchez, Topacio seems to know the ins and outs of the jueteng business. Before his death in April from complications of a stroke, Sanchez had been named in Senate inquiries as among the country’s jueteng operators, an accusation he had vehemently denied.
Topacio said the money-laundering activities of gambling syndicates included buying and selling luxury cars and real estate.
The more cautious gambling operators have been depositing large amounts in offshore bank accounts and shell corporations in the British Virgin Islands, Hong Kong, Singapore and other countries which implement strict bank secrecy laws, he said.
But perhaps the safest and quickest way to clean up “dirty money”—money from gambling, illegal drug trade and kidnapping—is through the “Binondo Central Bank,” according to Topacio. “You will be amazed by how the Binondo Central Bank can easily move millions of dollars electronically in favor of a jueteng lord in a matter of minutes,” he said.
Since the passage of the Anti-Money Laundering Act in 2001, gambling operators and other individuals engaged in illicit trades have sought to move their money undetected by the Anti-Money Laundering Council (Amlac), he said.
“These creative methods were borne out of the necessity to have their money cleaned before authorities make their move to have them investigated or worse, seize their funds,” he said.
Topacio said a group of Chinese businessmen was helping jueteng financiers escape Amlac’s scrutiny by depositing large amounts in accounts in Hong Kong banks, with just a ring of the phone.
To illustrate the procedure, he said gambling lords or their representatives would contact the Chinese financiers and bring with them the money they wanted to clear—in cold cash.
Upon presenting the cash, Topacio said the Chinese contacts would immediately call their accomplices in Hong Kong to deposit the equivalent amount in US dollars in the name of a dummy entity, be it an individual or a corporation.
The money would then be “repatriated” to the Philippines as remittances sent to numerous banks accounts under the name of certain people.
To avoid scrutiny, the remittances are broken down into small amounts, oftentimes lower than the P500,000 minimum “suspicious-transaction records” set by Amlac.
Topacio said bank transfers should also be below the “covered transactions,” an Amlac rule which automatically investigates any bank transactions amounting to P4 million in a span of five days.
In return, the Chinese businessmen get 3 percent of the total cash transaction, he said.
“The Binondo Central Bank is an alterative financial system in itself. I can go there with P45 million cash to have one million dollars deposited in my account in minutes. It’s as simple as that,” Topacio said.
He said there was almost no effort involved at all. “It’s done in minutes through phone calls. You don’t even have to be physically present there to move your money inter-country physically. You also escape the risk of being detected by the Customs at the airport,” he added.
Since no large amounts are transferred from Hong Kong to the Philippines, he said Amlac could barely detect the transactions.
“But we can’t discount collusion with [certain people in] the regulatory agencies like the BSP (Bangko Sentral ng Pilipinas), Amlac or even the local banks,” he said.
Topacio said he came to know about the financial dealings of gambling operators through his “study” of the country’s fiscal system. He said he wrote an article, “Cleaning Up: How Jueteng Syndicates Launder Dirty Money,” to “alert” lawmakers of the “loopholes in our system of laws.”