I’m vastly understating that number. We know that thieves planned to run that much through the Philippines gambling establishments. It’s a clear case of appeasing a local industry by writing loopholes in legislation.
A month ago, thieves began looting Bangladesh’s account at the New York Federal Reserve. The transfer of the money had been “fully authenticated” by an international financial messaging system, known as Swift. That means there may have been a security breach in Bangladesh. The thieves sent three dozen transfer requests. Four succeeded in moving $81 million. A fifth was stopped when the thieves misspelled the recipient’s name.
$81 million of the Bangladeshi money was sent to accounts at Rizal Commercial Banking Corp in the Philippines. According to reports, from there $29 million was directed to the account of a gambling junket operator identified as Weikang Xu at Solaire Resort & Casino, while approximately $30 million was delivered to Mr. Xu in cash. Another $21 million was transferred to a local online game company called Eastern Hawaii Leisure Co.
Casinos have always been an ideal spot for laundering money. You take cash or wires in, turn them into chips, then the chips are as good as gold. You can then cash in the chips and move money back out, looking clean and fresh.
The Philippines beefed up its anti-money laundering laws in 2013, but it decided not to add casinos to the list of covered entities. Lawmakers wanted the fledgling casino industry, and the jobs it promised to create, to flourish.
Of course, the Philippines is not alone in carving out casinos. Other countries have similar exemptions for their casinos. That makes them easier tools for money laundering.
Sources:
- A Hole in the Global Money-Laundering Defense: Philippine Casinos by Cris Larano in the Wall Street Journal
- The Screwed Pooch Edition of the Slate Money Podcast
- Bangladesh Bank Chief Resigns After Cyber Theft of $81 Million by Rick Gladstone in the New York Times
Roulette by Chris Yiu CC BY SA