SCUTTLEBUTT

High-stakes cash cow

The mayor of a first-class municipality in a Manila suburb is under fire for green-lighting the construction of a new cockpit arena in the town. A source who refused to be named said the cockpit will be built on property owned by a relative of a high-ranking official of the town.

Some residents have expressed strong objection to the cockpit because it is being built near a school, a residential area, and commercial establishments. Many are worried this source of many vices would be a threat to the peace and security of the community.

The source said he is not against projects that would bring progress to the town as long as these have a positive effect on all residents and are in accordance with the law. The question is for whom is this project intended? Who will benefit from it?

The source noted the cockpit construction is being rushed even with the strong opposition from the locals. The town already has a cockpit so there is no need for another one unless the public welfare has become secondary to personal interest.

Airlines in FATF crosshairs

The powerful Financial Action Task Force (FATF) is looking into international airlines whose crew are being used as a conduit for laundering earnings from underworld operations, a local official with direct contact with the anti-dirty money organization said.

The source said that money laundering is done through the airline crew purchasing high-value merchandise as the syndicates exploit their mobility and access.

Syndicates recruit airline crew members, including pilots and flight attendants, to act as intermediaries since they frequently travel internationally, often have layovers in different countries, and face less scrutiny at customs due to their profession.

The dirty money, typically in cash, is provided to the crew members before a flight, discreetly in their home country or during a layover in a jurisdiction with weak financial oversight.

During layovers, the crew use the cash to buy luxury and high-value items like jewelry, watches, designer goods, electronics, and even gold. These purchases are made in cash to avoid traceable bank transactions.

Duty-free shops at airports and high-end stores in cities with lax cash-reporting rules are ideal places.

According to the source, the crew then bring the purchased items back to the country of origin or another destination.

Airline crew often have personal baggage allowances and may face lighter customs checks, reducing the risk of detection.

The dirty cash is thus “converted” into luxury items, assets that are legitimate.

Once the merchandise reaches its destination, it is sold — either through legitimate channels, like luxury resale markets or on the black market.

The proceeds are deposited into bank accounts or kept as cash, now appearing as income from a sale rather than the original illicit source.

Alternatively, the goods could be gifted or transferred to others as part of the laundering scheme.

The crew makes purchases across multiple countries or splits transactions among several peers, making it harder for the authorities to track the money’s path.

If questioned, crew members could claim the purchases were personal, using their income and travel perks as a cover.

The operation is hard to trace in countries with liberal customs procedures, but most countries require declarations for bringing into their territory cash and goods over a certain value, which is $10,000 in the US, and high-end stores might report large cash purchases.

Such ops are a tacit but lucrative side hustle for many aviation workers.