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The China connection in the Bangladesh Bank heist

Discussion in 'Bangladesh Defence Forum' started by Black_cats, Jun 13, 2018.

  1. Black_cats

    Black_cats SENIOR MEMBER

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    The China connection in the Bangladesh Bank heist (Part 1 of 2)

    http://www.manilatimes.net/the-china-connection-in-the-bangladesh-bank-heist-part-1-of-2/401893/

    BY BEN KRITZ, TMTON MAY 29, 2018BUSINESS COLUMNS
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    Ben D. Kritz

    WHEN the Senate “Blue Ribbon” committee held hearings on the Bangladesh Bank-RCBC scandal in early April 2016, one of the most anticipated witnesses was a colorful “businessman” of Chinese origin, Kam Sin Wong, otherwise known as Kim Wong.

    According to testimony from other witnesses, Wong, who had absented himself from the country for “a medical procedure” just as the story of the $81 million heist broke, had handled about $52 million of the stolen funds after they were extracted from the RCBC accounts, of which $21 million was passed through his own casino, the Eastern Hawaii Leisure Co. in the Cagayan Economic Zone in Northern Luzon, and $31 million delivered to him personally in cash by RCBC branch manager Maia Santos-Deguito and another mysterious Chinese man named Xu Weikang.

    Speculation is that Wong’s “medical trip” was for the purpose of conferring with his co-conspirators – or to get instructions – on what story to tell when he returned to the Philippines, now that the scheme had been discovered. Whatever his activities abroad, the story Wong had prepared to tell when he returned was so patently spurious that possibly nobody but a Philippine senator would believe it.


    After disputing the amount he had supposedly received from the stolen funds, Wong claimed ignorance of their provenance. The money he received, he said, which was only about $14 million, was partly a repayment of a $10 million debt for gambling losses owed to him by a business acquaintance, a junket operator from China named Gao Shuhua. The balance – the additional $4 million or so he’d received personally and the $21 million he vaguely acknowledged had passed through his casino’s accounts, but said had been distributed for junket operations in other places – was, as far as he’d been told, money that Gao and a business partner named Ding Zhize intended to invest in the casino business in the Philippines.



    Wong said he had met Gao in 2007, and that the latter had told him he and Ding had encountered difficulties in trying to set up a business in Macau. Needing a bank for his and Ding’s planned business investment in the Philippines, Gao asked Wong for a recommendation, and Wong introduced him to RCBC branch manager Maia Deguito at a lunch meeting at Wong’s office inside the Midas Hotel and Casino in May 2015.


    Deguito had come to mind, Wong said, because she had repeatedly pestered him to open an account whenever he bumped into her – he offered no other details as to how they’d met in the first place, or why their paths seemed to cross frequently – and that it was she and Gao who ginned up the four fictitious dollar deposit accounts that eventually received the money from Bangladesh.

    The next time he heard from Gao, Wong told the Senate panel, was on February 4, 2016 – the day of the heist – when Gao introduced him to his partner Ding and informed him that a large sum of money would be arriving the next day, asking Wong to keep tabs on its progress. Wong did so, calling the bank several times to inquire about the deposits, and on the evening of February 5 at Solaire Casino took delivery of P80 million from Philrem President Michael Bautista, who had been dispatched there by Deguito, and later P20 million delivered by Deguito herself (Philrem’s Michael and Salud Bautista had earlier said most of the money had been handled by Xu). In addition, Wong explained, Bautista had delivered P300 million plus $5 million to him in several installments between February 10 and February 14.


    Wong, playing the unwitting honest businessman role to the hilt, said that he had been shocked and distressed to discover he’d been duped into becoming involved in the heist by Gao and Ding, and offered to return $15 million of the money. The rest, unfortunately, had already disappeared. Wong and his attorneys later delivered the money to the safekeeping of the BSP in what turned out to be a minor media circus, even involving the rather comical discovery that one of the P1,000 bills in the large pile of currency was a counterfeit, which one of the attorneys replaced with one from his own wallet. After some legalistic mucking around by the Anti-Money Laundering Council (AMLC) over a “forfeiture order,” the money was eventually handed over to the Bangladesh authorities, and to this day is still the only part of the stolen $81 million that has been recovered.

    Despite Wong’s self-serving and dubious sounding story, he and the mysterious Xu Weikang were quickly exempted from any criminal charges by the Department of Justice for lack of evidence in late April 2016, shortly after the Senate hearings ended. That decision was confirmed in September of that year by the DoJ under President Rodrigo Duterte’s first Justice Secretary, Vitaliano Aguirre.

    The Bangladesh-RCBC scandal was not the first time Kim Wong had been in the public spotlight for his involvement, tangential or otherwise, in some kind of scandal. In August 2001, he appeared before a different Senate hearing investigating allegations of drug connections involving Senator Panfilo Lacson during Lacson’s stint as head of the Presidential Anti-Organized Crime Task Force. Then-Intelligence Chief Col. Victor Corpus had linked Wong, whom he accused of being involved in the drug trade, even implicating him in the murder of drug informant, to Lacson, but lost credibility when he showed the Senate committee a picture of someone he misidentified as Wong. Corpus was mocked in the press and the committee’s final report for having “the wrong Wong,” and the case evaporated. But one thing it did accomplish was to reveal the extensive web of friendly connections Kim Wong had established with the PNP and numerous political personalities.

    That intimate and cordial relationship with the Philippines’ power structure and ability to make useful connections – including an acquaintance with eventual RCBC head Lorenzo V. Tan, dating back to at least 2002 – made Wong a perfect manager for the collection operation of the stolen funds once they reached the Philippines.

    Wong, who had come to this country at age 11 from Hong Kong (in interviews, he has been somewhat vague about his origins), was a typical Chinese entrepreneurial success story; opportunistic and hard-working, he shunned formal schooling for commerce, and had built up a string of restaurant businesses in Manila by the time he landed in the public spotlight in 2001. By 2004, he was involved in the lucrative casino junket trade in Clark, and by 2006 had, along with some partners, set up the Eastern Hawaii Leisure Co. in CEZA.

    One of those investors was Gao Shuhua, a notorious gambling racketeer from Beijing who had just been released from prison in China and was looking for greener pastures beyond the reach of the humorless Chinese authorities. His story and that of his equally colorful partner Ding Zhize is covered in the next installment of this tale.
     
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  2. Black_cats

    Black_cats SENIOR MEMBER

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    The China connection in the Bangladesh Bank heist

    http://www.manilatimes.net/the-china-connection-in-the-bangladesh-bank-heist/402806/

    BY BEN KRITZ, TMTON MAY 31, 2018BUSINESS COLUMNS
    Twitter

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    Ben D. Kritz

    (Part 2 of 2)
    GAMBLING is a vast business in China, with most estimates agreeing the amount wagered exceeds 1 trillion yuan ($156 billion) annually. That is a remarkable figure, because almost all of it is completely illegal: China prohibits all forms of gambling, except in the administrative regions of Macau and Hong Kong. The government does tolerate (but doesn’t explicitly permit) some forms of online gaming; it also operates two state lotteries, but does not consider them a form of gambling, as the proceeds are used for various government programs.

    The huge Chinese appetite for gaming creates a headache for the authorities and two business opportunities for the entrepreneurial-minded. The first is purely illegal gambling – underground casinos, card games, mahjong, sports betting, and even shadow lotteries that in some places rival the official ones in popularity and revenue generated. The second, operating gambling junkets, is legal in letter if not quite in spirit, and this is where the Philippines’ ambitious cultivation of its gaming sector has exposed the country to a seamy side of life in China.

    Junket operators arrange trips for high-rolling gamblers from the Chinese mainland to places where gambling is legal; Macau is the most popular destination, followed by Australia, Singapore and South Korea; the Philippines, Vietnam and Cambodia are rapidly growing in popularity, and new locations in Japan (which legalized casino gaming in December 2016) and Saipan are also looking to capture a share of the junket business.


    Due to the near impossibility of separating junket-generated revenue from overall casino earnings, no one is even certain how big the market is, but as one indicator of its potential, Philippine casinos as of mid-2017 were reporting up to 110 percent increases year-on-year in gambling revenues, attributing almost all of it to the influx of visitors from China, according to a Bloomberg report.



    China views the junket business with a great deal of suspicion, and for good reason. At best, it represents a significant, problematic capital outflow from the country; at worst, and more often, it is a vehicle for money laundering by corrupt businesspeople and government officials. The Chinese government has done what it can to throw obstacles in the path of junket organizers and gaming operators. Pressure on Macau to disclose information about casino clientele led to a significant downturn in the business there beginning in 2015. A ban on promoting gaming by foreigners in China was highlighted by the arrest there of several employees of Australia’s Crown Resorts in June 2017; foreign operators have since learned to get around the ban by advertising their other features, such as events and concerts or resort facilities. China has also had some limited success in working with other countries’ authorities to crack down on illegal gambling; one of the more notable incidents was the arrest of more than 1,200 Chinese nationals working in an online gaming call center in Clark in November 2016.


    Still, these efforts amount to trying to stop a flood by throwing handfuls of sand at it, and leave plenty of opportunities for people like Ding Zhize, one of the two men named by Kam Sin Wong in his Senate testimony, to thrive in the junket business. Ding, who is originally from Chendai, China, first became noticeable in 2007 when he registered an “investment company” in Macau. This, along with several other similar companies Ding subsequently registered in Macau and China, was apparently a front for his main business, which was operating gambling junkets.

    An illuminating Bloomberg News story from August 3, 2017 and penned by Alan Katz and Wenxin Fan (the report deserves special mention for providing numerous leads for my own investigation) revealed that Ding had a particular specialty: Off-table betting, in which anonymous gamblers place bets at casinos through third-party bookmakers. The Chinese authorities consider off-table betting prima facie evidence of money-laundering activity, thus when the Chinese crackdown on Macau’s junket business began in earnest in 2015, Ding’s business there was all but derailed, although he personally avoided official scrutiny.


    That is where Gao Shuhua, with connections to the Philippine gambling industry through his own junket operations and a modest investment in Kam Sin Wong’s Eastern Hawaii Leisure Co., came in handy for Ding Zhize, offering the prospect of a clean location to reestablish what was, in effect, a money-laundering service.

    Gao’s appearance in the Philippines in late 2006 followed his release from an 18-month prison sentence in China for operating an illegal casino. In 2012, he was arrested again, this time for managing an extensive gambling ring that extended across 29 provinces. Gao, like his Philippine-based acquaintance Wong, apparently had some influence with people in high places. For reasons that were not disclosed, his four-year sentence for the 2012 charges was reduced to three years, and then by 2014, he reappeared in Macau to form an “investment company” of his own, records that conflict with official records in China that reflect Gao was released on “medical parole” sometime in 2015.

    At this point, the roles of the three main players in the collection operation part of the Bangladesh Bank heist were set, although they may not have yet been aware that their services would eventually be employed as part of the world’s biggest bank robbery. Using Gao’s Philippines connections, Ding could relocate his “laundry service,” and Wong would serve as the local guide and organizer. His first activity along those lines in May 2015 was to introduce Gao to RCBC branch manager Maia Deguito, who helped set up the spurious dollar deposit accounts that would receive funds from overseas.

    At the same time Gao and Wong were taking care of that, Ding was setting up a new company called “Ninin” (a name he frequently used for his “businesses”) in China that would serve as the final destination of laundered funds. Incorporated in May 2015 under his brother Xiaoming’s name, “Ninin” supposedly had 100 million yuan ($15 million) in capital, apparently in anticipation of money that never would arrive; it was dissolved by Xiaoming in July 2017, about four months after Ding Zhize’s arrest by the police in Xiamen. Nothing has been heard from Ding since, and beyond his arrest, no official records of his case seem to exist.

    The fourth member of the team, Xu Weikang, was described by the Bloomberg report as a “heavily indebted businessman” from Zhejiang, who when interviewed claimed to be a victim of identity theft. Following up those leads doesn’t reveal much more, other than to suggest that the debt might have been to Ding, who sent him ahead to the Philippines as Ding’s and Gao’s eyes on the money delivery operations in early February 2016.

    While the money was being extracted from the RCBC accounts, the two stayed behind in China to organize the junket players who would unwittingly do the actual work of churning the stolen funds through the Philippine casinos’ VIP rooms, arriving sometime around February 11.

    Along with Ding, Gao also vanished, courtesy of the Xiamen police department, arrested on unspecified charges in August 2016. When interviewed by Bloomberg, Gao’s wife reported that when she asked about getting him freed from custody, she was told by the arresting officers, “Don’t bother calling a lawyer.” Like Ding’s case, no information about Gao after his arrest seems to be available.

    ben.kritz@manilatimes.net
     
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  3. Flynn Swagmire

    Flynn Swagmire BANNED

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    We have to catch and punish internal madafakas first. Than we should think about outsiders...

    ঘরের শত্রু বিভিষণ ফকিন্নি গুলারে আগে বাংলাদেশ ব্যাংকের সামনে ঝোলানো দরকার।
     
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  4. Bilal9

    Bilal9 ELITE MEMBER

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    The last BB governor who retired in a haste - I believe he is suspect and got paid off handsomely.

    Also suspect is the security 'consultant' they hired from India. Forget that guys name. All gone.
     
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  5. SBUS-CXK

    SBUS-CXK SENIOR MEMBER

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    Sorry, I believe we can handle this matter.

    360截图20180613211634920.jpg
     
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  6. Bilal9

    Bilal9 ELITE MEMBER

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    So, did the govt. authorities get these guys (Gao and Ding) in China? From your statement, it seems like they did.

    @Cycle Macson mentioned that our own people in the National regulatory bank are suspects.
     
  7. SBUS-CXK

    SBUS-CXK SENIOR MEMBER

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    They are not in China, so need some time to arrest them.

    Besides, According to the Philippines investigators: they did not know that the money belonged to Bangladesh.

    Sorry again. 抱歉。
     
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  8. Bilal9

    Bilal9 ELITE MEMBER

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    No issues brother - things will get resolved sooner or later.
     
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