If you are to believe the main cast of the POGO (Philippine offshore gaming operators) scandal — Alice Guo and Cassandra Li Ong — they are young Chinese-Filipino women who were just very business savvy.
But a year’s worth of government investigation has revealed evidence of an alleged criminal enterprise that can produce tens of millions of pesos each day per scamming hub, according to operatives.
While it is not yet clear who designed the criminal POGO masterplan — since it seems that the scamming infrastructure has long existed in the country — Guo and Ong remain at the center of human trafficking and money laundering suits. Lawmakers are hoping that both will eventually squeal and name bigger fish.
In the meantime, the pieces of the puzzle reveal an intricate enterprise. These details are based on documents independently obtained by Rappler, presented by senators, and filed before prosecutors. Guo has not addressed many of these issues, often invoking her right against self-incrimination during her first appearance in the Senate on Monday, September 9, since her arrest in Indonesia.
There are two hubs that have been raided:
Both Guo and Ong claim they were just lessors. Ong told the House of Representatives that she is not close to Guo, and their relationship stops at Ong being the girlfriend of Guo’s brother, Wesley. Guo told the Senate that Ong introduced her to the supposed big boss of the Porac operations, Duanren Wu. (Wu is the incorporator of Whirlwind, and Ong’s godfather.)
What do the documents and testimonies say?
Although Whirlwind is based in Pampanga, it registered its company in the Securities and Exchange Commission (SEC) extension office in Tarlac, according to their 2019 incorporation records. Stephanie Mascareñas, who is registered as an incorporator of both Whirlwind and Lucky South 99, told the House they got their papers notarized in Bamban. “Wala po ako ‘nung nag-notarize. Sa pagkakatanda ko, nag-notarize siya sa Bamban (I was not there when they notarized. If I recall, they notarized it in Bamban),” said Mascareñas.
When Guo incorporated Baofu in May 2019, with Chinese fugitive Huang Zhiyang and Zhang Ruijin of the Singapore money laundering case, the company did not have enough capital “to afford the construction of the buildings worth hundreds of millions, or even billions, which were purportedly leased to Hong Sheng and Zun Yuan,” according to the money laundering complaint filed against Guo and Ong at the Department of Justice (DOJ).
This is where Ong helped, according to investigators, because the 24-year-old allegedly was “also a silent partner in the Bamban Pogo, as she was the one who contributed in the construction of the Baofu compound,” said the same complaint.
Here is how the hubs operate, according to operatives, as the POGO licensee is not the sole company. Instead, it rents out its infrastructure, strong internet connection in the bundle, to sub-licensees. These are Business Process Outsourcing (BPOs) acting as service providers.
Ong indicated this design, too, to the House Quad Committee. “Hindi ako part ng POGO operations…kasi si Lucky South pinaparenta lang niya sa mga POGO po.” (I am not part of the POGO operations, because Lucky South only rents it out to POGOs.)
This layered design, which allows many sub-licensees, was unique to the POGO as invented by the Philippine Amusement and Gaming Corporation (Pagcor) under former president Rodrigo Duterte. This was according to Katrina Ponce Enrile of the Cagayan Economic Zone Authority (CEZA) which claims to have pioneered a profitable model for offshore gaming pre-Duterte.
“POGOs sub-licensing model also allowed these all fly-by-night and scam operators to proliferate as Pagcor is no longer able to track how deep the sub-licenses go,” said Enrile during a July 31 House hearing.
In the case of the Bamban hub at least, Guo added more layers. She had always admitted to owning multiple family-owned firms related to piggery, meat, and embroidery, and which she claimed, was the source of her wealth. One of those companies, QJJ Farm, deposited a total of P100 million worth of checks to Baofu, split over 10 transactions in just two days, from June 23 to 25 in 2020.
“These transactions had no rational and underlying trade obligation between a piggery farm and a real estate company. The most logical interpretation of these transactions would either be QJJ Farm is financing Baofu or QJJ Farm is the pass-through entity for Baofu,” said the money-laundering complaint.
Investigators also found that Baofu stopped using the formal banking system after September 2020, while Zun Yuan never opened any bank accounts. This bolsters their belief that QJJ was used as a pass-through.
Another red flag for QJJ Farm is that it was used by Guo to deposit a total of P8 million in 2016 and 2017 to a company that is considered by the Anti-Money Laundering Council (AMLC) as a “person of interest for illegal drug activity,” according to the Court of Appeals’ resolution approving the request to freeze 90 bank accounts, 12 real properties, 12 vehicles, and one helicopter belonging to Guo and other business partners.
The Bamban hub was worth at least P6 billion before it was raided and shut, according to Senator Sherwin Gatchalian.
This money flow led investigators to this conclusion: “Alice Guo and her cohorts intended to create layers and layers of corporations to make it appear that they were engaged in profitable and legitimate businesses, but in fact, they are not.”
Rappler earlier reported that Guo, according to court certifications, lied when she claimed that she divested from Baofu before she ran and won as mayor of Bamban in 2022.
Ong, on the other hand, would have you believe that being an officer of the leasing company, and not the POGO licensee, isolates her from all the mess. She insisted on this even as she admitted that she was the one who tried to renew Lucky South’s license with Pagcor.
She did so because if Lucky South loses business, Whirlwind also loses business. In fact, Whirlwind’s only reason for existence is for Lucky South to exist. That’s according to Harry Roque, former Duterte spokesperson, who figures in this scandal because he helped Ong set a meeting with Pagcor executives.
“Siguro naman maiintindihan ninyo na kapag may nangyari sa umuupa sa iyong property, na wala namang ibang purpose kundi para sa POGO, mawawalan ka ng kita,” said Roque during the July 31 hearing at the House.
(Maybe you’d understand the fact that if something happens to the one renting your property, which has no other purpose than for POGO, you will lose profit.)
In fact, Ong herself said Whirlwind and Lucky South used to be one entity. “Nung una po, ‘yung Lucky South and Whirlwind po iisa, pero nung huli naibenta na po si Lucky South. [Naibenta] last year,” said Ong. (At first, Lucky South and Whirlwind were one, but eventually Lucky South was sold. It was sold last year.)
Were the operations of Bamban and Porac synced? Apart from the fact that Whirlwind’s papers were processed in Tarlac, both POGOs hired the same person to be its consultant to transact with government — Dennis Cunanan, a former government official convicted (and acquitted in some cases) for his role in the pork barrel scam. Documents obtained by Rappler prove his consultant capacities for both Hongsheng and Lucky South.
What is not clear is between the two, who helped who? Who had the original idea? Based on SEC incorporation papers, Guo’s Baofu incorporated first, on May 3, 2019, after which Whirlwind incorporated on August 2, 2019.
However, documents also showed that even before Baofu was incorporated in May, Guo was already signing deeds of sale as early as February that year to acquire the lands in the compound.
By April, those deeds of sale had transferred to Baofu even though the company had yet to register with the SEC, according to the complaint. “The 05 April 2019 transactions were the basis of the transfer of the Certificates of Title to Baofu, as the same were attached to the Certificate Authorizing Registration issued by the Bureau of Internal Revenue. Emphasis must be made that Baofu is not yet incorporated. However, it already acquired properties through respondent Alice Guo,” said the complaint.
The direction of the Senate’s investigation to get to the bottom of the POGO scandal is also headed in the direction of Guo and Bamban. Senator Jinggoy Estrada believes the big boss to be Huang Zhiyang, Guo’s co-incorporator in Baofu. Huang Zhiyang was also incorporator of Sun Valley, a previously raided POGO in Clark, Pampanga.
Rappler’s sources inside and outside government who are privy to the gaming world believe that if not the big boss, the POGO patron in the Philippines is somebody else. It is someone who’s known to senators, and it appears that Senator Risa Hontiveros knows this person, too.
She said on June 26: “May kinalaman sa isang napakalaking imbestigasyon ng Senadong ito noong nakaraang Kongreso pa, ilalabas po natin ito sa tamang panahon.” (This is connected to an old big investigation by the Senate in the previous Congress, and we will reveal it at the proper time.)
Are scam hubs a Philippine invention? Definitely not. The Philippines was just the next destination of criminal syndicates when China and Cambodia started a massive crackdown on casino scams in the Golden Triangle. In fact, AMLC noticed an uptick in casino-related suspicious transactions in 2020, after Pagcor resumed issuing POGO licenses. (It was paused because POGOs had attracted scrutiny that year).
Guo is facing at least four criminal investigations, one of which (for graft) has already been filed in court. The three others for qualified trafficking, money laundering, and tax evasion are pending before prosecutors. Ong is facing criminal investigations for qualified trafficking and money laundering, also both pending before prosecutors.
President Ferdinand Marcos Jr. has banned all POGOs, and even those with no criminal scam operations have been instructed to wind down before the year ends. – with reports from Joann Manabat/Rappler.com
