A $81 Million Dollar Hole in Anti-Money Laundering Laws

Print Friendly, PDF & Email

I’m vastly understating that number. We know that thieves planned to run that much through the Philippines gambling establishments. It’s a clear case of appeasing a local industry by writing loopholes in legislation.

roulette by Chris Yiu

A month ago, thieves began looting Bangladesh’s account at the New York Federal Reserve. The transfer of the money had been “fully authenticated” by an international financial messaging system, known as Swift. That means there may have been a security breach in Bangladesh. The thieves sent three dozen transfer requests. Four succeeded in moving $81 million. A fifth was stopped when the thieves misspelled the recipient’s name.

$81 million of the Bangladeshi money was sent to accounts at Rizal Commercial Banking Corp in the Philippines. According to reports, from there $29 million was directed to the account of a gambling junket operator identified as Weikang Xu at Solaire Resort & Casino, while approximately $30 million was delivered to Mr. Xu in cash. Another $21 million was transferred to a local online game company called Eastern Hawaii Leisure Co.

Casinos have always been an ideal spot for laundering money. You take cash or wires in, turn them into chips, then the chips are as good as gold. You can then cash in the chips and move money back out, looking clean and fresh.

The Philippines beefed up its anti-money laundering laws in 2013, but it decided not to add casinos to the list of covered entities. Lawmakers wanted the fledgling casino industry, and the jobs it promised to create, to flourish.

Of course, the Philippines is not alone in carving out casinos. Other countries have similar exemptions for their casinos. That makes them easier tools for money laundering.

Sources:

Roulette by Chris Yiu CC BY SA

Author: Doug Cornelius

You can find out more about Doug on the About Doug page

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.