Philrem owners deny money laundering charge

Ina Reformina, ABS-CBN News

Posted at Jul 05 2016 08:36 PM | Updated as of Jul 06 2016 10:27 PM

Salud and Michael 'Concon' Bautista Jonathan Cellona, ABS-CBN News

MANILA - The owners of remittance firm Philrem Service Corporation (Philrem), Salud and Michael 'Concon' Bautista, on Tuesday denied charges of money laundering over the stolen $81-million worth of Bangladesh Bank funds that entered the Philippine financial system via the Rizal Commercial Banking Corporation (RCBC). 

The couple filed with the Department of Justice (DOJ) a joint counter-affidavit to respond to the complaint filed by the Anti-Money Laundering Council (AMLC) on April 28 against them and Anthony Pelejo, the firm's anti-money laundering compliance officer.

READ: Philrem sued for money laundering

AMLC charged the individuals for violations of Section 4a (transacts monetary instruments or property that represents, involves, or related to the proceeds of an unlawful activity), 4b (converts, transfers, disposes of, moves, acquires, possesses or uses said monetary instrument or property), 4f (performs or fails to perform any act as a result of which he facilitates a money laundering offense); Section 9b (record keeping); and Section 14c (malicious reporting) of Republic Act (RA) No. 9160, also known as the Anti-Money Laundering Act.

The 37-page joint counter-affidavit of the Bautistas, sworn before Assistant State Prosecutor Jeanette Dacpano, pointed out that "there is nothing in the complaint and its annexes that would even remotely establish that an unlawful activity or predicate crime has in fact been committed."

"Aside from the bare allegations in the complaint, there is nothing else to substantiate the claim that there was an unlawful activity to speak of. Since it is incumbent upon [AMLC] to prove all the elements of the offense of money laundering, it must be able to show through evidence that there was an actual predicate crime," the joint counter-affidavit read. 

In its complaint, the AMLC alleged that "Philrem, acting as remittance agent, actually comingled the funds and acted as a 'cleaning house' and that Philrem's role was to make it extremely difficult to trace the source and flow of the funds by avoiding all anti-money laundering measures set by laws and regulations."

"The participation of Philrem was really to 'wash' the funds and conceal the money trail. In fact, the funds could have been directly transferred from the bank account of ['William So Go'] to the bank accounts of the beneficiaries," the complaint read.

A total of $61-million was converted and transferred to the peso account of Philrem with RCBC-Unimart Greenhills last February, according to the AMLC. 

READ: $81M heist: The money trail

The Bautistas stressed that the alleged hacking into the Bangladesh Bank's system which caused the leakage of the funds was not shown to have taken place in the Philippines, and therefore is beyond Philippine penal laws. This is respondents' counter-argument to the AMLC's claim that a predicate crime under RA No. 8792 (Electronic Commerce Act of 2000) was committed.

"[O]ur penal laws are enforceable only within the Philippines' territory. Applying the foregoing, there could have been no [predicate] crime committed in violation of RA No. 8792. Therefore, the AMLC's theory that a predicate crime under RA No. 8792 was committed must necessarily fail.

"[I]t is incumbent on [AMLC] to prove that the laws where the purported activity occurred, whether Bangladesh or elsewhere, penalizes the acts and transactions which preceded the movement of the subject funds," the counter-affidavit read. 

The Bautistas further argued that in the absence of evidence, "mere narration cannot in any way be construed as proof of commission of a predicate crime." 

They also said the Incident Report filed by Bangladesh Bank on the matter is "unauthenticated and unsworn" and "is a mere scrap of paper having no probative value."

On the matter of their alleged transacting of the funds, the Bautistas claimed that the AMLC failed to show that they had knowledge these funds were related to an unlawful activity.

"[O]ur transaction in connection with the funds subject of the instant case is limited to the servicing of the remittance transaction referred to us by [RCBC Jupiter Branch Manager, Maia Deguito]. All we did was accept clear, transferrable and tradeable funds and delivered them to their respective beneficiaries in accordance with the instructions relayed to us.

"We were never privy to any transactions, arrangements or agreements beyond this," the counter-affidavit read. 

They also stressed that they had "no knowledge or reason to believe" that the RCBC "William Go" account from which the funds were transferred to the Philrem account, was fictitious, as claimed by the AMLC.

PELEJO'S COUNTER-AFFIDAVIT

In his separate counter-affidavit, Pelejo said that the Suspicious Transaction Report (STR) he submitted last February 17 over the subject transactions was "truthful."

"[T]here is no bad faith or malice on my part and neither did we file an STR containing false information... there can be no malicious reporting on my part since I was not aware that the money that was transacted and delivered was allegedly laundered money," Pelejo's counter-affidavit read.

The AMLC'c complaint stated that the STR ran counter to Salud Bautista's claim before the Senate Blue Ribbon Committee hearings that the "instructions to transfer funds from the 'Go' account to Bloombery, et al., came from the RCBC Jupiter Branch Manager, Maia Deguito" when the STR claimed that it was Go that gave instructions "for deliveries of $29-million to Bloomberry Resorts and Hotel Inc. (Solaire) on from February 5- 10; $ 21.25-million to Eastern Hawaii Leisure Company Ltd. from February 10 -11; and $ 30.64-million to Mr. Weikang Xu from February 5 - 13."

The STR also allegedly left out an important player in the transaction, businessman Kim Wong, the complaint alleged.