Some Filipinos working out of the southern Philippine city of Cagayan de Oro have found an almost perfect way to bail the country out of its $45 billion foreign debt and Ps145 billion ($3.08 billion) government budget deficit: German and Argentinian bonds.
Not only that, they also have US Federal Reserve Bonds and dollar bills as part of their funding sources.
Well, this is almost perfect, except that the Bangko Sentral ng Pilipinas (Central Bank of the Philippines) is not happy about this group's open market operations.
Combined police, central bank and US Secret Service agents busted this international crime syndicate engaged in trafficking counterfeit currencies, and seized over $2 trillion of fake US treasury bonds.
In a press conference on Wednesday, Deputy Director General Leandro Mendoza, chief of the Philippine National Police (PNP), reported that a suspect was arrested during a raid in Cagayan de Oro City last Saturday (Oro is Spanish for gold). The suspect was identified as Archie Mingco.
According to Police Superintendent Nestor Gualberto, Mingco and his missing cohorts will be charged with counterfeiting under Article 166 of the Revised Penal Code.
Revealing some kind of monetary genius, the syndicate had a very diversified bond and cash portfolio. Fake bonds worth $773.7 billion were seized by operatives from Mingco's house. Gualberto said some of the bonds had been sold in Mindanao, the third largest island of the Philippine archipelago. The police are also looking at the possibility that other counterfeit bonds have been smuggled out of the country.
The bond portfolio included $1.6 billion in fake Argentinian currency, $10 million fake German bond certificates and $1500 counterfeit Japanese yen. The syndicate's total holdings were $2,157,044,400,000. It is not known if they paid income taxes on these bonds.
The Criminal Investigation and Detection Group of the Philippine police said the large denomination bonds may have been intended for a "lost treasure' scam, whereby the syndicate sells these bonds purportedly as part of a treasure hunt recovery in Mindanao to gullible buyers.
The US Secret Service was represented by David Popp during the press conference in Camp Crame, the headquarters of the Philippine police.
The fake bonds and bills were found to be of "very good quality," but some of the bond denominations do not exist. The US bonds, totaling more than $2 trillion, were in denominations ranging from tens of thousands of dollars to $500 million. Bonds of other countries were in denominations as small as $30.
Another suspect, Renato Waban (alias Jacky Waban), escaped the police dragnet. Of the $2 trillion, about $1.383 trillion worth of counterfeit bonds were seized from his house. Operatives are still seeking five other suspects, but believe they have busted the world's biggest counterfeiting syndicate, a distinction not entirely out of tune given that the world's biggest thief distinction is held by a former President.
With Mingco's bond portfolio management experience, he has a bright career as central bank governor given that Governor Rafael Buenaventura is facing criminal charges from former officers of Urban Bank, one of Manila's biggest banks that Buenaventura shut down last year.
Or, he may apply as Secretary of Finance as he has shown ingenuity in contrarian sourcing of funds, what with Argetinian bonds in his portfolio.
On the other hand, with his expertise in disappearing from his house during the raid, Waban is believed to be changing careers and will contact David Copperfield shortly.
