draining development.pdf - Khazar University

How Well Do Anti–Money Laundering Controls Work in Developing Countries? 395not have been classified as a PEP by a domestic bank, and it is implausiblethat domestic regulators or prosecutors would, in that era, have takenaction against bankers for failing to conduct AML actions in relation toRaul’s businesses.Case 3. Joseph Ejercito Estrada served as vice president to Fidel Ramosand then as president of the Philippines. He began his term on June 30,1998, but was ousted in less than three years, having been accused ofamassing over US$11 million in kickbacks from illegal gambling andtobacco excise taxes. Proceeds from these kickbacks were allegedly usedto finance companies formed to purchase real estate for Estrada.One of these companies was allegedly St. Peter’s Holdings, which was99.8 percent owned by Jose Luis Yulo, the former president of the PhilippineStock Exchange and a close associate of Estrada. On October 6,1999, a P142 million check was allegedly drawn from an account ofVelarde, a friend of Estrada at Equitable PCI Bank, and deposited intoYulo’s personal account at the Bank of Philippine Islands branch. Yulothen withdrew P50,000 from his account to open a corporate accountfor St. Peter’s Holdings, where he later deposited the P142 million.St. Peter’s Holdings purchased the Boracay Mansion in New Manila,Quezon City, for P86 million. The home was then used by LaarniEnriquez, allegedly one of Estrada’s mistresses. Yulo also executed threecashier’s checks made payable, one, for P86,766,960.00, to Vicente ASMadrigal (a former senator and power industrialist whose daughter currentlyserves in the Senate) and two others. The St. Peter’s Holdings bankaccount only had P2,000–P5,000 after the P142 million transaction. It isnot clear if or how illicit funds were acquired by Velarde to make paymentsto Yulo’s account.Estrada allegedly acquired over 18,500 square meters of real estate inluxury subdivisions, as well as other valuable property using similartransactions through other corporate vehicles. On the other hand, he didnot appear to engage in the massive development contract corruptionschemes that were a noted feature of the Marcos regime.Case 4. Following the election of the Workers Party candidate Luiz InácioLula da Silva as president of Brazil, the government attempted tosolidify its power in the legislature, where it did not have a working