Republic of the Philippines

PHILIPPINE NATIONAL POLICE

Criminal Investigation and Detection Group
Regional Field Unit 7
Camp SoteroCabahug, Gorordo Avenue, Cebu City
Tel/ Fax # 032-2320058 Email: 7rcidu@cidg.pnp.gov.ph

MEMORANDUM

FOR : Director, CIDG

Camp BGen. Rafael T. Crame, Quezon City
(Attn: GOC-OMD)

FROM : Regional Chief, CIDG RFU7

SUBJECT : Special Report on the Implementation of SW against

YONZHENG WU of XIN JUANG JEN CHING LTD, INC
for Violation of PD 1602 in Rel. to RA 10175

DATE : September 10, 2019

1. This pertains to the Pronouncement of PRRD in allowing the thriving of

Offshore Gaming Operations in the Country but subject to regulation by PAGCOR.
The Philippine Offshore Gaming Operations (POGO) in the country, according to
PAGCOR,remitted almost P12 billion to the national government from 2016 to 2018
alone. This year, the government is expecting P8 billion more from the taxes paid
by the POGO operators. The 10% revenue collected from the offshore gaming goes
to charity programs and other related charity programs and services of the
Government. These, could be materialized if POGO operators faithfully paid their
taxes due for the government.

2.POGOs are companies that provide online gambling services to foreigners.

It must be registered and licensed by the Philippine Amusement and Gaming
Corporation (PAGCOR). The Philippines beingthe cheapest alternative destination
where online gambling is legal, many foreign based operators draw interest to
engaged the services of PAGCOR-accredited local gaming agent and service
providers for its offshore gaming operations in the country. POGOs has contract
agreement between Business Process Outsourcing (BPO), a special Class of
BPO that provide services to legitimate licensed gaming operators abroad and do
not in any way handle betting but purely product marketing and customer relations
and are not servicing any of PAGCOR POGO licensees and have at least ninety
(90%) Filipino workforce. On the other hand, the Customer Relation Services
Provider (CRSP) will provide customer service to the players/bettor and to cater
their various needs through direct contact and interaction by means of remote
communications devises.
 However, in reality, BPOs and CRSPs become competitors of POGO, they
are directly involved in betting operation ontheir maintained websites, handles
advertisements, received payments, allow websites be accessible in the Philippines
which is a gross violation of PAGCOR offshore policies, and worse the
Government was deprived of the 10% share they got from their illegal online
gambling operations.

3. That sometime on October last year, this RFU received a report that
22bet.com website operated by XIN JUANG JEN CHING LTD, INC is engaged in
online gambling activity operating as an offshore gaming based in Mactan, Lapulapu
City.Accordingly, the website caters not only to foreign clients or bettors but to the
locals as well. Based on the Philippine Amusement and Gaming Corporation
(PAGCOR) Offshore Gaming Regulatory Manual, As per Regulation 1, authorized
players refer to “any individual who is physically in a country other than the
Philippines; this excludes Filipino citizens even if abroad and individuals in territories
where online gaming is prohibited.”Even if a Filipino citizen wants to participate in
POGO sites, he wouldn’t be able to. All POGO gaming websites are blocked in the
Philippines (or they should be). The rules are clear in Section 3 of Regulation 2 that
the operator “shall not allow its gaming website to be accessed within the territory of
the Philippines or in territories where online gaming is prohibited” and “shall not allow
placing of bets and paying of winnings to occur within the territorial jurisdiction of the
Philippines.”The report is in contrast with the regulation of PAGCOR in the case of
22bet.com website.

4.In connection with that report, the undersigned made a coordination at

Malacanan palace to to conduct a discreet surveillance and investigation together
with the intel personnel of (BID} personnel region 7 and were able to get and
confirmed one of the gambling website used.
Initially, the investigators were able to locate its exact location. Based on the
surveillance, the XIN JUANG JEN CHING LTD, INC is occupying the 2nd up to the
12th floor of the Tower One Plaza Magellan, Mactan Newtown, Brgy. Mactan,
Lapulapu City, Cebu and managed by a certain YONZHENG WU. Several Chinese
looking individuals were seen coming in and out of the building, elicitation conducted
to some Filipino hired as janitress and errands reveals that they were indeed
Chinese Nationals working as Call center agents manning computers, laptops, and
smartphones with playing cards, dice, billiard balls, and other gaming icons in their
respective screen monitors.

5.Acting on the previous pronouncement of the PRRD that he favored

POGO as it generates more taxes for the country hence this operation was
realized. The efforts of CIDG RFU7 was aimed to support the wisdom of PRRD
to generate more funds for the countries continues development.

On the 1st Week of September 2019, RFU7 detectives was able to access
and register in 22bet.com website, made payments, play and bet at the said website.
The result was used as one of the requirements in the Application for Search
Warrant against the company for operating Online Gambling prohibited under Sec. 1
para (a), sub para (1) and (2) of PD 1602 in relation to Sec. 6 of RA 10175.
 Rules on cyber warrants am nos. 17-11-03 sc section 2.2 states that:

On the other hand, an application for a warrant under this Rule for violation of
Section 6, Chapter II of RA 10175 (all crimes defined and penalized by the Revised
Penal Code, as amended, and other special laws, if committed by, through, and with
the use of ICT) shall be filed by the law enforcement authorities with the regular or
other specialized regional trial courts, as the case may be, within its territorial
jurisdiction in the places above-described

6. On September 6, 2019 an Application for Search Warrant was filed and

raffled at thesala of 7RTC Br-10, Cebu City, same was approved and signed by Hon.
Judge SOLIVER C. PERAS, 1ST Vice Executive Judge, 7th Judicial Region, Regional
Trial Court in Cebu per A.M. No. 17-11-03-SC.

7. At about 3:30 in the morning of September 7, 2019, a briefing was

conducted at HQRFU7 attended by the joint personnel of HQRFU7, CIDG Lapulapu
City FU, CIDG MandaueCity FU, CIDG Cebu City FU, RMFB7, RACU7, RIU7, RID7,
Cebu CPO, and Lapulapu CPObefore proceeding to Tower One Plaza Magellan,
Mactan Newtown, Brgy. Mactan, Lapulapu City, Cebu to implementSearch Warrant
No. 0183-09-0619-10 for Violation of Sec. 1 para (a), sub para (1) and (2) of PD 1602
in relation to Sec. 6 of RA 10175 against YONZHENG WU of XIN JUANGN JEN
CHING LTD INC.

8.At about 5:30 in the morning of same date, the aforementioned joint
operating teams arrived and implemented Search Warrant No. 0183-09-0619-10 at
the 2nd to 12th floor of Tower One Plaza Magellan, Mactan Newtown, Brgy. Mactan,
Lapulapu City, Cebu resulted in the arrest of 182 suspects (134 male and 48
female) and seizure / confiscation of 1,355 computer sets, 1,314 laptops, 4,850
smartphone, four (4) DVRs (Centralized)and other electronic devices used in the
operation of online gambling in the guise of a legit offshore gaming operations.

9. On September 10, 2019 at about 11:40 AM, all the arrested suspects were
subjected to inquest proceedings conducted by Assistant City Prosecutors
ANTONIO C. ASENIERO and SHELAMAR E. SALIGANAN-ABADIA, both of
Lapulapu City Prosecutors Office.

10. At about 9:40 PM of same date, all the vaults which were part of the
evidence were released to the Lawyers of XIN JUANG JEN CHING LTD, INC per
instruction of the Higher Headquarters.

11. The 134 male suspects were temporarily billeted at Zapatera Gym, Brgy,
Zapareta, Cebu City while 47 female are billeted at Dragon Inn Hotel, E. Chavez St.,
Brgy. Lorega, Cebu City while one (1) female suspect in the name of Peng Wen
Juan is confined at UC Med Hospital.
 12. As part of the procedure involving cyber offenses, this unit will be applying
a warrant to disclosed computer data in order for the acg to conduct forensic
examination on the recovered evidences.

This operation if not visualized in a bigger perspective, is just a mere simple

gambling operations. But if the small hole cracked by CIDG RFU7 be concretized will
led to huge opening for investigation that will surely contribute to the increase of
revenue that will be generated by the PAGCOR. Morever, deeper investigation if
pursued in this instant case would probably discovered other cyber offenses such as
but not limited to fraud, cyber sex, human tracficking, blackmails.

CIDG RFU7 operation against this company that is protected by high profile
persons is not an economic sabotage because at the very first place the government
is not earning the 10 % for its taxes. The Concern agencies cannot demand taxes
beyond what is due to a license and credited CRSP/BPO company. But in reality this
company is operating like a license POGO does.

This unit should be commended instead, because this operation will have a
positive impact in terms of increase in the revenue collection of the government. As
companys hiding behind the BPO/CRSP accreditation but operating as a license
POGO may either stop their illegal activities or have their companies secure an
appropriate license.

12. For information.

LITO ENGKIG PATAY
Police Colonel

Attachment/s:
- STD OPN OF POGO
 STD OPN OF POGO

POGO

CONTRACT/AGREEMENT
CRSP MENT BPO

CLIENT/
- Not in any way handle
BETTOR
betting but purely product
marketing and customer
relations
 REALITY

ONLY FEW FAITHFULLY

POGO PAID TAXES

CRSP BPO

- Competitor of POGO
- Direct Betting
- Advertisement
- Payment
- Website are Accessible in the
Philippine
- NO 10% Government share
CLIENT/
BETTOR