'Gov't missed chance to nab jueteng lords for money laundering'

Posted at 09/30/10 8:01 PM

MANILA, Philippines - A top official of the Bangko Sentral ng Pilipinas' (BSP) Anti-Money Laundering Council (AMLC) on Thursday said the government missed a chance to prosecute suspected jueteng operators on money laundering charges 5 years ago after it failed to file a single criminal case against the suspects.

Speaking before a Senate joint committee inquiry on jueteng, AMLC officer-in-charge Atty. Richard David Funk II said his office had built up cases for suspected jueteng lords who were implicated in a House of Representatives investigation in 2005. He said the money laundering cases were set to be filed but were stalled after government failed to file a single case against the suspects.

"The AMLC is mandated to investigate the money laundering aspect of a predicate crime. We did the case buildup but we had to wait for the precise time and moment for the existence of probable cause. None were forthcoming because no cases were filed except against the two individuals," he said, referring to Congressmen Mikey Arroyo and Ignacio Arroyo,
 who were both accused of receiving jueteng payola.

Thursday’s hearing investigates revelations made by retired Archbishop Oscar Cruz and Sen. Miriam Defensor Santiago, indicating an alleged resurgence of the illegal numbers game in the first 2 months of the Aquino administration.

Santiago earlier said jueteng rackets generate up to P30 billion in earnings annually.

Cruz said jueteng lords sometimes launder their money by betting on international boxing matches. A lawyer, meanwhile, said gambling lords buy expensive artwork and luxury cars or hide their money in offshore accounts to escape detection.

Funk said the crime of money laundering is not a separate crime by itself but a derivative offense stemming from an illegal activity such as illegal gambling. He said that for money laundering to occur, there must first be a predicate crime that led to illegal proceeds that were then laundered.

He said the filing of criminal charges against the suspects is important since it proves the existence of the predicate crime, which led to money laundering activities.

He added that the AMLC could freeze assets of suspected jueteng lords once money laundering charges are filed against them.

Amending anti-money laundering law

The AMLC official cited several triggers that prompt the investigative body to conduct an investigation.

These are: suspicious actions reported by financial institutions, covered transactions reported by same, money laundering activities and other violations of AMLC which are the subject of referrals and media reports; complaints under oath such as the recent Senate investigation and media reports.

Funk said the AMLC is already investigating alleged money laundering activities of jueteng suspects based on the new revelations of retired Archbishop Oscar Cruz, whistleblower Sandra Cam and Sen. Miriam Defensor Santiago.

The investigation, he said, is being conducted with partner agencies such as the Bureau of Internal Revenue, which is conducting separate lifestyle checks on the jueteng lords, and the Philippine National Police, which examines the criminal aspect.

Funk said the AMLC is also constrained in investigating bank deposits of suspected jueteng lords since a Supreme Court ruling requires their organization to first secure a court order before having access to an account.

He said the ruling also requires AMLC to first inform the account owner that his account is being investigated, which usually stops the investigation.

The AMLC official said he is proposing several amendments to the Anti-Money Laundering Act including allowing their group to investigate bank deposits of suspected jueteng lords without informing the account owner as well as allowing lawyers to report suspicious transactions of their clients.

He said that aside from lawyers, dealers of artworks will also be allowed to report suspicious transactions to the AMLC.

Systematic way to beat jueteng

Secretary Jesse Robredo of the Department of the Interior and Local Government, meanwhile, said he is confident that jueteng can be eliminated based on his own experience as a local executive for the past 19 years.

He gave several recommendations in beating the numbers racket including: strengthening the small-town lottery (STL) as a preferred alternative, improving law enforcement, incentivizing local officials and operators in supporting STL, and weaning the people away from a gambling culture.

Robredo said giving higher cash prizes for STL will lure jueteng bettors to choose the legal numbers game over its illegal counterpart.

He noted that STL should not be patronized because the law says so, but because it is the preferred, competitive alternative.

Asked about rumors linking Department of Interior and Local Government (DILG) Undersecretary Rico Puno to the illegal numbers game, he said he heard about the reports during his first few weeks in the DILG, and had already talked to his subordinate about it.

He, however, added that he has found no evidence proving that Puno is receiving jueteng payola.