06. C FOAD II Supplemental Audit Report Deposits Accounts of Apollo Quiboloy and Related Parties

Page 1: Introduction and Report Overview

• Sender: The Assistant Vice President - Field Operations Audit Department II

• Recipient: The Secretariat – Accountability and Assessment Committee

• Subject: Supplemental Audit Report on Deposit Accounts of Apollo Carreon Quiboloy (ACQ) and Related Parties

• The report includes data related to the accounts of ACQ Solomonic Builders Development Corporation across Bajada and Kapatagan branches.

• Confidentiality Notice: The document is confidential and restricted for internal use.

Page 2: Special Audit Report Overview

• Class and Department: CLASS B, Land Bank of the Philippines - Internal Audit Group

• This report emphasizes the confidentiality of the information contained and the requirement for it to remain internal.

Page 3: Background Information

• Related Parties and Audits:

  1. Audit report dated September 13, 2024, regarding deposit accounts of ACQ Quiboloy and related parties.

  2. Additional details concerning Hismajesty Bottling Plant Inc. and Glorafel Salinas Manaday, alongside newly discovered names during validation procedures:

     • Isai Laguna Vargas

     • ACQ College of Ministries Inc.

• Confidentiality Reminder: The information regarding Land Bank’s personnel is confidential.

Page 4: Audit Procedures

• Procedure Overview:

  1. Transactions were reviewed using Audit Command Language Analytics (ACL).

  2. Customer information and KYC documents sourced from Enhanced Simplified Account Opening (eNSAO) and Integrated Documents Retrieval System.

• Specific Findings:

  1. Validation of Hismajesty Bottling Plant Inc. showed substantial cash deposits with some instances not approved by branch officers.

  2. Details of Cash Deposits:

     • 17 instances of cash deposits above ₱500,000, totaling ₱11,676,382, with many not documented.

Page 5: Additional Findings

• Analysis of Transactions:

  • 65% of cash deposits from the bottling business were noted, while some checks issued were to government accounts.

• Savings Account: G. Manaday has a savings account linked to business activities, with significant cash deposits and withdrawals noted over time.

Page 6: Concerns over Account Validations

• G. Manaday's transactions and linked accounts relate to multiple institutions, raising flags for potential risk and necessitating scrutiny of KYC processes.

• Withdrawal and Deposit Activity: Account opened for business purposes with intricate transaction history.

Page 7: ACQ Solomonic Builders Development Corp

• Business specifics include significant ownership stakes related to other entities involved, impacting relation to financial activities noted previously.

• Account Specifics:

  • Engaged in construction, with a history of collections linked to public projects and compliance issues.

Page 8: Examination of Financial Activities

• Highlighting concerns about anomaly in the transaction trace and tagging issues related to high-risk identifiers.

• Suspicious Transaction Reporting: Noteworthy activities that warranted assessment through Suspicious Transaction Report mechanisms due to conflicts.

Page 9: Detailed Transactions Analysis

• On-us Check Deposits: Identified the sources of large payments and construction projects impacting account balances.

• Cash Deposits Analysis: Majority of significant deposits raised compliance concerns, highlighting potential risks in transaction monitoring.

Page 10: Withdrawal and Encashment Procedures

• Highlights of encashments showing disparate correlation to known accounts, indicating potential laundering risks.

• Required Documentation: Documentation for large cash transactions under scrutiny.

Page 11: Account Relationship Analysis

• Specific concerns raised regarding checks presented that did not align with documented entities in bank records.

• Credited Transactions: Assessing shared services by entities related to noted risks.

Page 12: Valuation of Business Activities

• Summary of businesses involved showing intricate relationships to banks, necessitating further evaluations based on risk tagging.

Page 13: Overview of Account Activities

• Account Monitoring: Flow of transactions needing tighter controls given recent findings and alerting potential compliance issues.

Page 14: Watchlist and AMLD Interactions

• Identification of misleading entries in systems resulting from naming conventions and needing adjustments.

Page 15: Construction and Related Project Payments

• Documented payments linked to projects undertaken, demonstrating the need for diligence in financial oversight processes.

Page 16: Additional Individual Accounts

• Discussion on unrelated individuals revealed through audits indicating limited relationships with banking activities but are flagged as high risk.

Page 17: I. Vargas Specific Account Review

• Accumulating transaction history presenting momentum breakdowns, needing closer regulatory inquiries.

Page 18: ACQ College and Key Officer Analysis

• Involvement with negative media resulting in stricter watch over associated accounts and banking relationships flagged.

Page 19: Summary of Findings

• Conclusions regarding substantial deposits and withdrawals raising compliance flags for both ACQ SBDC and associated individuals necessitating further audits and controls.

Page 20: Operational Recommendations

• Recommendations aimed at ensuring adherence to stringent monitoring for accounts cited within reports to uphold compliance.

Page 21: Annex A - System Feedback Form

• Highlight concerning the need for sustained internal review on system performance and regulatory alignment adjustments.