Philippine Cryptocurrency Regulator Accused of Misappropriating Millions

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Raul Lambino, the administrator of the Cagayan Economic Zone Authority (CEZA) — the special economic zone that licenses cryptocurrency exchanges operating in the Philippines — has come under fire for allegations of corruption.

On Feb. 20, The Manila Times published a story citing purportedly leaked from the Philippine National Intelligence Coordinating Agency (NICA). The outlet claims that Lambino has unexplained wealth in the tens of millions of dollars. According to the NICA report:

“It is now the general belief of many from Pangasinan, especially among provincial political leaders, that Lambino is the most liquid and moneyed government official in the province.”

Lambino allegedly misappropriated millions from crypto companies

Lambino allegedly charges each cryptocurrency company applying to operate under CEZA $100,000 for principal licensing fees plus an application fee of $100,000. However, the intelligence report purports that Lambino records having only $3,000 in the receipt for these fees, suggesting that he is embezzling the other $97,000.

With 25 cryptocurrency companies operating within Lambino’s CEZA administration, the report suggests that the administrator has pocketed at least $4.8 million in application and licensing fees alone.

The report also claims that many companies have gifted 10% of their capital stock to corrupt CEZA officials.

CEZA resources allegedly dedicated to electing Lambino’s family

The NICA report purportedly claims that crypto and gaming companies pay Lambino a weekly stipend, contributing to Lambino’s illegitimate income of $98,000 each week that is earnt through “various schemes.”

Lambino has allegedly funneled the equivalent of tens of thousands of dollars into the electoral campaigns of his family members, and CEZA contracted staff to work on the campaigns. In the Philippines’ 2019 midterm elections, Lambino’s son Mark was elected as provincial vice governor, while his wife Marilyn won as mayor of Mangaldan. 

The report alleges that much of the campaigns’ funding was provided by Chinese investors with gaming or cryptocurrency interests.

Lambino is also accused of squandering his department’s treasury, with the report claiming that Lambino disbursed $36.4 million in previously unused and unprogrammed funds within 12 months of taking office. By July 2018, only $2.7 million remained. 

Corrupt crypto regulator catches the travel bug

NICA’s report asserts that Lambino has traveled abroad 22 times within a year, violating a ban on foreign travel for Philippine government officials. “Luxurious travels for the CEZA top management and their platoon of security personnel have become the norm,” the report states.

The CEZA administrator appears to now be preparing to bid for the Philippine congress in 2022, with NICA speculating that he may feel his time at CEZA is numbered:

“Surprisingly, his action became bolder in recent months for fundraising despite the pronouncement of PRRD (President Rodrigo Roa Duterte) against corrupt government officials. Apparently he could be sensing that he will be replaced anytime.”

The report asserts that Lambino has distributed television sets and groceries as gifts to citizens of the province of Pangasinan to secure support from voters.