It is, as Winston Churchill would have put it, a riddle wrapped in a mystery inside an enigma.
So far this is what we have. Hackers arranged to move in 35 transactions some USD 950 million from the Bank of Bangladesh account with the U.S. Federal Reserve Bank to RCBC. Only 5 transactions totaling USD 81 million made it.
The said funds were routed to 5 fictitious accounts opened in RCBC’s Jupiter St. branch in May 2015 by its manager, Maia Deguito, with $2,500 provided by one Kim Wong, a casino junket operator. Wong believes the $81 million came from 2 fellow Macau junket operators, Mr. Gao and Mr. Zhize. Gao owed Wong P450 million. The dollars would partly go to paying this debt.
Of the $81 million, $15 million was then transferred to Philrem, a remittance company. The balance of $66 million was transferred to a “fictitious” RCBC account of one William Go which was subsequently also transferred to Philrem.
Philrem converted $61 million into pesos through RCBC for P2.9 billion. Philrem claims it distributed the pesos as follows: P1.3 billion to Solaire, P1.0 billion to Eastern Hawaiian Enterprises, a company owned by Wong; and P600 million in cash to one Weikang Xu, a casino associate of Wong. (Mr. Wong testified he received P380 million from Philrem, P20 million from Ms. Deguito and USD 5.0 million all in cash; or a total of about P600 million. Is this the same money allegedly sent to Xu?).
Philrem says it also handed USD18 million to Xu. Mr. Kim Wong refutes this although it is unclear how he would know.Did Xu lie to him about not receiving this money?
There was a balance of about $1.6 million which Philrem has not accounted for.
- Among all the banks in the world why was RCBC targeted to receive $950 million? Were elements in the bank “wired” to process this money? Who is Adrian Yuhuico, a resident of Forbes Park and “reserve bank officer”, who partied with Deguito?
2. Would a sum as large as $81 million been coursed through RCBC without a dry run i.e. were there similar transactions prior to this one?
3. Why was the RCBC “fictitious” William Go account needed to consolidate the $66 million? Why could the dollars not have gone straight from the five initial RCBC accounts to Philrem? When told, why did Go not immediately complain to RCBC higher ups about this “fictitious account?
4. Why was Philrem needed to process the money? Could RCBC not have converted the dollars into pesos -as in fact it ended up doing- and remitted them directly to the casino players? Was Philrem added to further layer the laundering?
5. How much money did Philrem make?
Based on the P81 million dollars it received from RCBC and the pesos/dollars it remitted to the casino players, Philrem made an estimated P32 million. Philrem admits to making P10 million in “handling fees” and to making a profit on the FX trade.
6. How much money did Branch Manager Deguito make?
Deguito reportedly boasted about having expensive lawyers to handle AMLA; covering the P5 million retirement of a colleague; and allegedly offered William Go P20 million to keep mum about his fictitious account. This tells you she must have made at least P100 million.
7. How much money did the casinos make?
Casinos work with junket operators to bring in high rollers. Junket operators are a casino within a casino in that they share “banca” profits on some agreed split in Kim’s case 47.5/52.5 with Solaire and 73.5/26.5 with Midas, a PAGCOR casino.
Solaire received P1.375 billion from Philrem most of which was converted into casino chips for high rollers who proceeded to lose about P1.275 billion. Based on the agreed split Solaire would have made P669 million, Kim P606 million before expenses (food, travel, accommodation and agents’ fees).
Eastern Hawaiian, a junket operator owned by Wong, received P1 billion from Philrem of which P550 went to high rollers who lost P510 million. On the agreed split between Eastern and Midas the former earned P375 million, the latter P135 million.
8. How much money did Kim Wong, Weikang Xu et al. make?
Kim could have earned a total of P981 million (P606 from Solaire and P375 million from Midas) from his share of high-roller losses. Additionally he received P400 million and $5 million (P235 million) from Philrem. Eastern received P1.0 billion of which he carved out P450 million, the money Gao owed him. Wong’s total possible take: P2.1 billion (before expenses) which he must have shared with Gao and Zhize.
Philrem claims to have delivered $18 million (P850 million) to Weikang Xu. The whereabouts of this money are unknown.
9. Will the Bangladeshis recover their money?
Kim Wong has publicly committed to returning P450 million in cash plus P40 million in chips or a total of P490 million; plus USD 4.6 million (P216 million). Will he also return his share of junket operator profits estimated at P981 million?
Philrem offered to return their handling fee of P10 million. Would it also return its FX profit which I estimate at P22 million?
Can Solaire and Midas be compelled to forfeit their casino profits estimated at P669 million and P135 million respectively? Solaire has P100 million in funds it has frozen.
There is $68,000 (P3.2 million) frozen in the accounts of the five initial depositors plus all sorts of loose change.
The total of the foregoing would be P2.530 billion ($54 million) minus expenses. If the missing $18 million can be traced the total recoverable amount could be $72 million leaving the Bangladeshis with a loss of $9 million.
10. To answer Sen. Enrile, how much did the hackers make and how did they receive it?
The hackers possibly made money:
a. From the $18 million unaccounted for and from other monies received from Wong & Co. Philrem could have been the remitting agent.
b. From monetization of the dead chips: The Chinese high rollers pay the junket operators some USD 41 million offshore. This is the dollar equivalent (@P47/$) of P1.925 billion in dead chips (P1.375 billion through Solaire and P550 million through Midas) given them in Manila.The operators remit this to the hackers.
From the above, the hackers made at least USD 59 million. The launderers made USD 22 million or 27% of USD 81 million, the going rate for money laundering.
11. Who are the links to the hackers?
Gao and Zhize, the Macao junket operators. Gao told Kim “big money” was coming in. Neither Gao nor Zhize are to be found.