• Thu. May 30th, 2024

Six Filipinos Indicted for Domestic and International Money Laundering in Southern California

ByGeorge Bao

Jul 31, 2018

LOS ANGELES – A Filipino woman and her family members were indicted by a federal grand jury Tuesday for conspiring to funnel in and out of the United States approximately $20 million in Philippine public funds obtained through a multi-year bribery and fraud scheme, the U.S. Attorney’s Office announced.

Four defendants together with approximately 20 Philippines legislators and other government officials not charged in U.S. indictments converted to their own benefit hundreds of millions of dollars in Philippine public funds through the intricate scheme and then transmitted approximately $20 million from that scheme into the United States to purchase assets, including real property and luxury vehicles.

The defendants fraudulently converted money from a lump-sum discretionary “Priority Development Assistance Fund” granted to each member of the Philippines Congress as well as other government funds designed to benefit poor Filipinos.

The money was paid to dozens of non-governmental organizations controlled by Jannet Napoles pursuant to contracts that required the money to be spent on development projects. The projects were not performed. Instead, the money was diverted to kickbacks for the legislators and other government officials, and for the personal use of the Napoles family.

Approximately $20 million of those funds were diverted to money remitters in the Philippines and then wired to Southern California bank accounts where the money was used to purchase real estate, shares in two businesses, two Porsche Boxsters, and finance the living expenses of three family members residing in the United States: Jeane Napoles, Reynald Lim, and Ana Lim.

The charges handed down Tuesday pertain to events beginning in September 2012 and continuing through August 2014. In September 2012, an audit discovered the fraud. In July 2013, the fraud and the U.S. proceeds were exposed in the Filipino press. In August 2013, Jannet was arrested by Philippine authorities and Napoles family bank accounts were frozen in the Philippines. Thereafter, Napoles and her family members attempted to quietly liquidate the assets in the United States, secretly repatriate most of the resulting funds back to the Philippines and to other accounts in the U.S. and United Kingdom, and disburse some of the funds to Jeane Napoles, who used the money to finance her lifestyle and open a fashion business.

“Even after Jannet Napoles made a highly publicized statement admitting that she had bribed Philippine legislators in connection with these ‘ghost projects,’ the defendants attempted to convert the proceeds of this crime to their own use,” said United States Attorney Nick Hanna. “The efforts of the Philippine and American investigators demonstrates that there are consequences to abusing the public trust and we hope to deter such conduct in the future. To do this, we will work with our Philippine counterparts to secure the extradition of the defendants to the United States.”

According to court documents, approximately $12.5 million in Southern California real estate has been seized by the United States Attorney’s Office and is subject to a civil forfeiture case pending before United States District Judge James V. Selna. If the court orders the assets forfeited, the United States will work with Philippine officials in an attempt to return the stolen funds back to the Philippine government.

U.S. authorities have received ongoing cooperation and substantial assistance from the Philippine government, including the Department of Justice, the Office of the Ombudsman, the Anti-Money Laundering Council, and the Commission on Audit, which responded to official requests pursuant to the Mutual Legal Assistance Treaty between the Philippines and the United States and through the Financial Crimes Enforcement Network.

This case is being investigated by the Federal Bureau of Investigation.

The case is being prosecuted by Assistant United States Attorney Daniel O’Brien, Deputy Chief of the Public Corruption and Civil Rights Section.

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