Tuesday, October 28, 2008

The Money Washing Machine

It is not unusual in the police and military officers that we find from them millionaires or even billionaires after their retirement from the service. They accumulate wealth from behind the scene and concealed sources while portraying a picture of honest and incorruptible officials. In their retirement, they maintain the power and financial gains to influence subordinate officials and a ready capital either for luxurious living or for the pursuit of elective and more lucrative position in the government.

I smell a mode of systematic scheme of money laundering in the actuations of senior officers of the Philippines National Police implicated in a mess that media termed as “euro generals.” From what I know of money laundering scheme, it is a system wherein a financial transaction is buried in a haystack of legal and illegal means to elude the paper trails, its source and identity , and where the money is to be kept. Its complex network of origin is hard to detect and when the layering stage –this refers, as what Wikipedia describes, to obscure the link between the initial entry point and the end of the laundering cycle- is completed it will return to a legitimate form and its integration to the country’s financial system.

Former Philippine National Police (PNP) comptroller Eliseo dela Paz –as his retirement took effect while on travel- together with his wife were held at the Moscow airport last October 11 for possessing an undeclared amount of money as much as 105,000 Euros equivalent to P6.9 million and exceeding the allowable limit of $10,000 or roughly 8,000 Euros or P495,000. PNP officials immediately declared that the money is a contingency fund for emergency purposes and originated from authorized “cash advance” of PD Dela Paz. Upon his return to Manila, the statement was changed and that the money is from PNP Intelligence Fund to buy security equipment. With these statements, there is already an attempt to obscure the money trail with the use of word “security” and therefore its fund origin cannot be divulged for security reasons. However, the recent investigation showed that the Philippine peso was converted to Euro through a small money changer by an intermediary and in smaller transaction to avoid scrutiny and suspicion. I am convinced that this may be a form of smurfing –a term also associated with money laundering- wherein a large financial transaction is being parceled to a smaller one to conceal where it came from and to avoid detection by regulators or law enforcement agencies.

Through the persistent demand of the Philippine Senate to investigate the “Euro generals”, the PNP Chief Director General Jesus Verzosa, as stated from GMA News, ordered the filing of criminal and administrative charges to former comptroller Eliseo dela Paz and three other PNP senior officers for “committing irregularities in the funding, release and disbursement of the P6.9 million worth of cash advances dela Paz carried for the Interpol delegation in Russia.” But Dela Paz did not appear in the Senate Investigation Committee despite a subpoena issued to him.

I smell something fishy. Al Capone has been flying his kite, “Capital Flight,” and he used the term “laundromats” to hide ill-gotten wealth through placement in the money washing machine. Do I sound something unusual and fishy? Ha...Ha-Ha!

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