Challenges of money muling probes
Acting on the petition of the Anti-Money Laundering Council (AMLC), the Court of Appeals issued last week a freeze order on the bank accounts of several officials from the Department of Public Works and Highways and executives of construction companies who were allegedly involved in anomalous flood control projects.
The AMLC admitted that, ahead of the issuance of that order, it heard reports of massive withdrawals from various bank accounts of contractors and their family members.
That should not come as a surprise because when the issue of “ghost” and substandard flood contracts initially hit the headlines, some members of Congress called on the AMLC to look into possible violations of the Antimoney Laundering Law by contractors who cornered those projects.
Knowing the devious character of those contractors, by the time the freeze order came out, their bank accounts may have already been drained except for the required minimum balance to keep them current.
The Bangko Sentral ng Pilipinas (BSP) said it would look into those withdrawals to see if they partake in money-muling activities that the Anti-Financial Account Scamming Act prohibits.
Money muling is committed when a person obtains, receives, deposits, transfers or withdraws proceeds that are known to have come from crimes, offenses or social engineering schemes.
A social engineering scheme is committed by a person who obtains sensitive identifying information of another person through deception or fraud, resulting in unauthorized access and control over that person’s financial accounts.
Undoubtedly, since banking and related financial transactions these days (and for decades) are initiated, completed and recorded digitally, the BSP would be able to trace all transactions made in the frozen accounts before the freeze order was issued.
Reviewing those transactions for possible ties to money muling would not be a walk in the park, considering their volume and the number of banks that may be involved, but it can be done if the BSP makes available the needed logistics for that purpose.
But the challenge is in proving in court that the transactions meet the criteria of money muling as defined in the law. For starters, the bank deposits have to be proven to have been illegally sourced or obtained by the registered owners of the bank accounts.
That would require proof beyond reasonable doubt about the contractors’ involvement in, for example, submission of false accomplishment reports and receipt of the amounts appropriated for the incomplete, substandard or phantom projects.
For these charges to stick, the prosecution may need photos of the projects after they were supposedly completed and paid for, including the testimony of witnesses who are professionally qualified to testify on the quality of the materials and workmanship of the projects.
Then there is the need to prove that the alleged mules knew that the proceeds from the accounts they transacted in were products of crimes or offenses committed by their owners.
That is something that cannot be presumed simply because their owners are under investigation for alleged involvement in questionable flood control projects. The presumption of innocence in criminal cases still stands.
Since the act of money muling requires a predicate crime, that is, an offense had been committed prior to the taking of the fruits of that crime, the latter has to be established first before charges can be filed against the suspected mule.
And even if that requirement is met, the mule can claim that the withdrawals that he or she made were, for example, in payment for the account owner’s outstanding debts to him or her.
In other words, there was no intent on the mule’s part to violate the law against money muling. Note that, as a rule, intent to commit a crime is an essential element in crimes punished by special laws, such as money laundering.
