CONTINUOUS cash transactions of businesses that were shuttered during the lockdown and large donations to pandemic relief efforts without supporting documents are just some red-flagged transactions seen during the pandemic, the Anti-Money Laundering Council (AMLC) said.
The AMLC released the COVID-19 (coronavirus disease 2019) Financial Crime Trend Analysis Typologies Brief, which discussed findings from suspicious transaction reports with an estimated value of P2.7 billion in the eight months to August.
“As more suspicious reports covering the periods of the pandemic, however, were analyzed, typologies related to the pandemic have emerged. Case narratives are explicitly citing COVID-19-related schemes and red flags, such as sending/receiving large funds allegedly for pandemic relief efforts, and continuous receipt of cash transactions, despite business closures due to the lockdown,” the AMLC said.
“As (covered persons) become more cognizant of these red flags and unusual transaction behaviors coupled with the adjustments in their transaction monitoring tools, the AMLC expects that suspicious filings related to the pandemic will further increase,” it added.
The AMLC cited schemes that involved large transactions allegedly from government units as payment for pandemic-related services and products.
One case involved an individual who received at least P2 million in cash deposits, claiming he was a hotel coordinator for the Overseas Workers Welfare Administration but was unable to provide acceptable supporting documents. The AMLC also noted the amount of transactions appeared to be “structured.”
Another case involved a woman who opened a savings account in Iligan City in November 2019. The AMLC said a “blacklisted individual” attempted to deposit P4.5 million into the woman’s account as COVID-19-related donations for Marawi residents. However, the individual was unable to provide supporting documents. Later, the woman’s account was also found to have received a total of P1.4 million, with more than half having been withdrawn via ATM or used to make purchases.
The AMLC also cited suspicious transactions involving businesses that were supposed to have been affected by the lockdown but continued to record financial transactions such as cash deposits and withdrawals.
It noted the case of a businessman involved in the food court and restaurant business, whose bank account received P140 million in cash deposits from January to June 2020 when most restaurants were not allowed to operate due to the lockdown.
The AMLC also noted schemes where fraudsters pretended to be affiliated with government units or use the name of government officials in order to solicit donations from the public.
In one case, an alleged fraudster used the name of a provincial governor to solicit P622,000 for COVID-19 relief efforts. Another case involved individuals who posed as employees of the Department of Public Works and Highways (DPWH) and solicited P150,000 for pandemic relief efforts from a DPWH contractor.
Another scheme employed during the pandemic is the transfer of large deposits allegedly due to business or employment changes that are not consistent with client account information.
In some cases, suspicious transaction reports were also filed for small-value, fast-moving funds sent to multiple accounts that were immediately cashed out with no justification.
The central bank waived convenience fees for online fund transfers earlier this year to encourage cashless transactions and as a relief measure during the pandemic. This appeared to have been exploited by money launderers and perpetrators that found more ease in carrying out their transactions digitally.
“Aside from the breach of internal company policies, there are also clients who use their personal accounts to cater to the needs of their immediate community as payment gateways and retail lending services, which are normally accorded by money service businesses, the AMLC said.
The dirty money watchdog urged financial institutions to ensure proper Know-Your-Customer or Customer Due Diligence policies remain in place and to assess clients’ risk rating periodically amid the rise in suspicious financial transactions.