Pagcor launches probe on $100-M money laundering scandal


Posted at Mar 02 2016 04:58 PM | Updated as of Mar 02 2016 06:30 PM

MANILA – The Philippine Amusement and Gaming Corporation said it has launched its own investigation into reports that casinos were used in laundering $100 million worth of funds with suspicious origins.

''Pagcor expects the casinos to submit their comments on the allegation as an initial step in the investigation within this week,'' the state-owned Philippine gaming regulator said in a statement Wednesday. 

The Philippine Daily Inquirer earlier reported that the funds were stolen by hackers from a bank overseas and then coursed to a RCBC-Makati City branch through a transaction handled by one of its branch managers with foreign exchange broker Philrem.

READ: PAGCOR lobby behind casinos' exclusion from AMLA?

The funds were then converted to pesos, consolidated into a single corporate account of a Chinese-Filipino businessman and then used to either "buy chips" or "pay for casino losses" incurred at Solaire Resort and Casino, City of Dreams Manila and Midas Hotel and Casino before being moved back to bank accounts overseas, Inquirer sources said.

Pagcor stressed that it requires casinos to employ ''strict internal control policies'' funds movements and issuances of playing chips.

It also noted that casinos usually implement the "know your customer'' protocol.

''Records of financial transactions are available for scrutiny by Pagcor on demand,'' it said.

''The internal control systems and procedures generally follow casino industry standards practiced in many gaming jurisdictions throughout the world."

The other banks mentioned in the Inquirer report were Philippine National Bank and Banco de Oro Universal Bank.

The report claimed PNB holds the corporate funds of the Chinese-Filipino ''junket operator'' while BDO only remitted the sum of $1.5 million to a bank in Hong Kong as part of its regular dealings with Philrem.

''None of the casinos mentioned in the news report have accounts with the bank through which the funds in question first entered the Philippine financial system,'' Pagcor noted.

Pagcor said it has been cooperating with the Anti-Money Laundering Council in the latter's review of the Anti-Money Laundering Act.

''While it is doing its own inquiry, Pagcor believes that AMLC is currently in a better position to deal with the issue as the casino industry also relies on the AMLC safeguards within the Philippine banking system,' Pagcor said.