Flood Control Scandal Linked to POGOs and Crypto Laundering

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Cybercrime investigators identified what they describe as a clear connection between the Philippines’ multibillion-peso flood control corruption scandal and cryptocurrency transactions linked to Philippine offshore gaming operators (POGOs).

Flood Control Funds Siphoned Through Crypto via POGOs

According to a report, Cybercrime Investigation and Coordinating Centre (CICC) Acting Executive Director Renato Paraiso revealed that investigators traced digital asset movements involving the same exchanges and individuals previously tied to POGO-related operations. 

He noted that these personalities also appeared in transactions connected to the alleged diversion of public funds intended for flood mitigation projects.

“There’s a definite link because these are the same exchanges or the same personalities that are converting USDT or cryptocurrency accounts for the people that we are suspecting are involved in POGO operations, as well as these personalities involved in this flood control scandal.”

Renato Paraiso, Acting Executive Director, Cybercrime Investigation and Coordinating Centre

Paraiso then stressed that it already turned over its findings to a government task group tasked with recovering assets linked to the scandal, adding that the Anti-Money Laundering Council (AMLC) recently froze several USDT and other digital currency accounts tied to suspicious activities traced to individuals under investigation.

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Recently, the executive confirmed that suspects in the Philippines’ flood control scandal are laundering illicit funds through cryptocurrencies.

•  Cooperation with compliant crypto platforms has allowed authorities to recover some USDT, while roughly ₱12 billion in bank accounts and properties linked to the scandal have been frozen.
• In another report, it was revealed that suspects laundered ₱50 million to ₱100 million per transaction through cryptocurrency using middlemen, cold wallets, P2P transactions, and VPNs to bypass bans on platforms like Binance.

Crypto Being Used for Money Laundering

Authorities said the laundering patterns mirror those seen in kidnapping, drug trafficking and online scam cases. Paraiso described cryptocurrency as increasingly becoming the preferred medium for criminal operations.

Former CICC Executive Director Alexander Ramos said that while the agency had long monitored digital currency flows in major criminal cases, the possibility of crypto being used to move corruption proceeds is emerging as a new concern. 

“But we have not tackled issues of currencies that were being taken out because of corruption.. Is it a possibility? Maybe… These scam centers were converting their revenues into cash… One of the things we were looking at was cryptocurrency.”

Alexander Ramos, Former Executive Director, Cybercrime Investigation and Coordinating Centre

He suggested that some laundering activity may be operating as a “service for hire,” facilitated by syndicates still active in the country.

Ramos also urged investigators to scrutinize casino operations. He said reports indicated that some public works officials allegedly converted their kickbacks into casino chips before cashing them out and depositing the proceeds as gambling winnings, a method that could be combined with crypto conversions.

Earlier this year, unlicensed casino junket operators were reportedly used to convert the ransom money in the Anson Que case into cryptocurrency, prompting the Philippine National Police to subpoena two local virtual asset service providers and freeze around ₱4.5 million in USDT. Authorities said funds moved through unregulated e-wallets and exchanges.

Crypto and POGO

In 2023, confiscated SIM cards, mostly seized from a POGO facility in Pasay, were found linked to e-wallet and cryptocurrency scams. These amounted to roughly ₱1 billion, according to the Department of Information and Communications Technology. Officials said many of the 25,000 SIMs held significant balances and were used by criminal groups to store proceeds from online fraud.

In September 2024, the Philippine police raided a suspected cryptocurrency scam hub in Parañaque City. The operation targeted AIA Company, which posed as a licensed POGO but was unregistered with the SEC, and allegedly ran cryptocurrency investment and love scams while filming indecent content on-site. 

A month after, Alice Guo, former mayor of Bamban, Tarlac, was under investigation for alleged ties to an organized crime network involved in cryptocurrency scams, money laundering, and human trafficking across Southeast Asia and beyond. Reports indicate her ventures in POGOs may have facilitated these operations, with international agencies and recent local raids in Pampanga uncovering trafficked victims and illegal crypto-related activities.

This article is published on BitPinas: Flood Control Scandal Linked to POGOs and Crypto Laundering

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