Banks told to explain depletion of ‘frozen accounts’

Some banks are being asked to explain the depletion of the accounts of Price Richardson Corp. after these were ordered frozen by the Anti-Money Laundering Council (AMLC).

Sources from the Securities and Exchange Commission (SEC) told reporters that the Bangko Sentral ng Pilipinas (BSP) is now looking into reports that Price Richardson was able to withdraw money from its bank accounts despite the freeze order.

The source declined to identify the bank, but Price Richardson has several disputed accounts in Hongkong Shanghai Banking Corp., China Banking Corp. and Citibank.

Reports that Price Richardson was able to withdraw from the frozen accounts came just as AMLC sent a delegation to meet with the Paris-based Financial Action Task Force (FATF) which has the Philippines as a money-laundering haven.

The case of Price Richardson was supposed to be the test case for the newly-enacted Anti Money-Laundering Act (AMLA) and the council is under pressure not to botch up the case and jeopardize the country’s chances of being removed from the FATF blacklist.

According to the SEC source, the bank was asked to explain why only a little over a thousand dollars were still in the account by the time it was examined by the AMLC.

The source said AMLC wanted to know the timing of the withdrawals and whether the account moved before or after the freeze order was issued.

At the time the AMLC order was issued, Price Richardson reportedly had total deposits amounting to $89,000. At present, however, the source said the account only had a little over $1,000.

The source warned that the bank could be in serious trouble unless it explains satisfactorily the alleged discrepancy. Bank officials, the source explained, could be facing four months to seven years in prison for non-reporting, seven years to 14 years imprisonment for assisting in money laundering activities and more if they are caught engaging in the activity themselves.

The freeze order was issued last year and covers over P15 million stashed in five different banks under peso and dollar accounts of Price Richardson Corp.

The AMLA Council, made up of the SEC, the Insurance Commission and the Bangko Sentral ng Pilipinas, subsequently issued a 15-day freeze order last Tuesday to check on the disputed bank accounts, most of which are in HSBC, China Banking Corp. and Citibank.

Price Richardson, which was incorporated only in December 2000, was registered as an administrative services company offering clerical, bookkeeping, mailing and billing services.

But upon investigation, it was found out that its personnel — made up of 22 mostly Canadian and British nationals — deal in registered securities without the necessary licenses.