A.

Money Laundering

I. Introduction

Money laundering is making “dirty” money look clean and appear legitimate. It is a process used by
criminal organizations to illegally obtain money effectively. Criminal enterprises create ways of
laundering the money to conceal the illegal nature of how it is obtained. It intends to disguise money
made illegally by working it into a legitimate financial system, such as bank or business. Money
laundering is a serious financial crime that is employed by white collar and street-level criminals. Most
financial companies have Anti-Money-Laundering (AML) policies to detect and prevent this activity. But
despite having anti-money laundering policies, financial companies were unable to stop the increase of
money laundering activities. Each year, huge amounts of funds are generated from illegal activities such
as drug trafficking, people smuggling, tax evasion, and theft, arm trafficking and corrupt practices. There
are many kinds of frauds in the past and might be there in the future but this process of hiding money has
affected the economies of various countries.

Rizal Commercial Banking Corporation (RCBC) is one of the trusted commercial banks in the
Philippines which is owned majority by the Yuchengco Group of Companies (YGC), one of the oldest
and largest conglomerates in Southeast Asia covering over 60 businesses. Since its establishment in 1960,
RCBC has been a pillar of the banking industry, providing a wide range of financial services to its
customers through its retail and investment bank, microfinance unit, foreign exchange brokerage house,
leasing company and overseas remittance tie-ups. The Bank in synergy with its YGC affiliates SunLife
GREPA Financials (SLGFI) and Malayan Insurance Company, Inc. (MICO) also offers investment-linked
life insurance products, auto, fire, personal accident, and other non-life insurance products. RCBC is also
committed to uplifting its customers’ lives through corporate social responsibility and environmental
sustainability programs. RCBC knows that the company’s true wealth lies in its continuous commitment
to serve the best interest of its customers. Proving that there’s more to its riches than gold, the bank has
put to heart its purpose of providing professional and personalized services to clients, corporations, and
other members of the communities it serves. And this sense of duty, above anything else, sets RCBC’s 50
years of service in gold.

One of the major issues the RCBC faced is money laundering where the two core of the corporate
governance which are the accountability and transparency where violated. RCBC handled the issue by
saying that they are working with a third-party investigator, and that executive officials are not involved.
RCBC fined 1 billion pesos for their lack of accountability and transparency through the said cases. They
have let this issue prevail therefore; they should also bear its consequences. They failed to report it to the
authorities sooner, thus proves there is a problem with transparency as these types of issues prevail.

II. Content/Body

The Department of Justice (DOJ) has filed a money laundering case against officials of Rizal
Commercial Banking Corporation (RCBC) in connection with the $81-million stolen by hackers from the
Bank of Bangladesh in 2016.

Charged before the Makati City Regional Trial Court were RCBC Retail Banking Group (RBG)
executives Raul Victor Tan, its former head; National Sales Director Ismael Reyes, Regional Sales
Director Brigitte Capiña, Customer Service Head Romualdo Agarrado and Senior Customer Relationship
Angela Ruth Torres.

“The resolution found the five officers of the RCBC Retail Banking Group remiss in their duties and
thereby facilitated the offense of money laundering,” Justice Undersecretary and DOJ Spokesperson
Markk Perete said.

The DOJ denied the motions for reconsideration of the five respondents saying they were found
instrumental in the lifting of the hold on four accounts where money stolen from the Bangladesh Bank
was remitted. They were also found instrumental in the withdrawal of the funds, among other acts.

The DOJ resolution noted that the officers allowed the transactions to push through even if “the red
flags were all over.”

The DOJ agreed with the Anti-Money Laundering Council (AMLC) that the “willful blindness
doctrine” applied to this case.

Citing Supreme Court jurisprudence, the resolution defined the “willful blindness doctrine” as “the
deliberate avoidance or knowledge of a crime, especially by failing to make a reasonable inquiry about
suspected wrongdoing, despite being aware that it is highly probable.”

“There is no better way to describe the acts of respondents than this,” read the resolution adding that
with the notices received on the possible fraudulent transfer of huge sums of money, the respondents
should have taken an investigation.

“By the very nature of their work in handling millions of pesos in daily transactions, the degree of
responsibility, care and trustworthiness expected of bank employees and officials are greater than those of
ordinary clerks and employees.”
 “Their complacent attitude in handling the suspicious remittances is unacceptable and rocked the
integrity of our banking system,” stated the resolution.

Sought for comment, RCBC’s Legal Counsel, Atty. Thea Daep said “we are confident that they will
be vindicated since our investigation, conducted by independent third parties, concluded they had no
knowledge about the alleged money laundering activity at all.” “We expect the complaint to be dismissed
consequently,” she added.

Previously, RCBC Jupiter Branch Manager Maia Santos-Deguito was found guilty for 7 counts of
violation of the Anti-Monetary Laundering Act.

Makati RTC Branch 149 Judge Cesar Untalan imposed a penalty of up to seven years imprisonment
for each count.

She was also required to pay not more than 200 percent of the value of the laundered amount or
almost $110-million.

III. References

https://www.rappler.com/business/doj-files-money-laundering-cases-vs-rcbc-executives

https://www.google.com/amp/s/newsinfo.inquirer.net/1121943/5-rcbc-execs-charged-in-bangladesh-
money-laundering-case/amp

https://www.rappler.com/nation/maia-deguito-appeal-makati-court-conviction