FBI: Mother-daughter fraud case traces money to house in Philippines

MANILA, Philippines — A mother and daughter originally from the Philippines were sentenced to federal prison in the Northern Mariana Islands after US prosecutors said they used a company to siphon school procurement funds that helped finance overseas travel, cash withdrawals and a house in the Philippines.

The US Attorney's Office for the Districts of Guam and the Northern Mariana Islands said Clarissa Adlawan, 55, was sentenced to 48 months in prison, while her daughter, Giselle Butalid, 34, was sentenced to 18 months in prison.

US District Court Judge Ramona Manglona handed down the sentences on May 6 in Saipan over their roles in a procurement fraud and money laundering scheme targeting the Commonwealth of the Northern Mariana Islands Public School System, a recipient of federal grant money.

Adlawan is a lawful permanent resident of the United States, while Butalid is a naturalized US citizen originally from the Philippines and a Saipan resident, according to prosecutors.

'Ghost' purchases

Prosecutors said Butalid worked for the CNMI Public School System and had access to its procurement process.

From October 2021 to August 2022, Butalid and Adlawan allegedly used their company, One Legacy LLC, to sell educational materials while concealing the conflict of interest from the school system.

Investigators later found that Butalid forged documents to hide that several procurements were "ghost" purchases, with the pair pocketing payments for materials the school system never ordered, according to the US Attorney's Office.

After receiving the funds, prosecutors said the defendants frequently traveled to the Philippines, stayed in luxury hotels, withdrew large amounts of cash and built a house there.

The US Attorney's Office cited payments of $50,000 and $52,500 to One Legacy for online learning materials that were never procured. Shortly after the payments, Butalid and Adlawan flew to the Philippines and withdrew about $10,000 in cash from ATMs.

Prosecutors also cited a $113,020 payment for another fraudulent purchase, followed by cash withdrawals totaling roughly $65,000 before another overseas trip.

Restitution, forfeiture

The court ordered Adlawan and Butalid to be jointly and severally liable for $548,788 in restitution. It also found that two properties they owned in the Philippines were subject to forfeiture.

Prosecutors said evidence showed Adlawan used stolen school funds to build a nine-room house in the Philippines.

"The defendants' conduct went beyond defrauding government agencies," US Attorney Shawn N. Anderson said. "Ultimately, children were deprived of educational resources and opportunities to learn."

Anderson said the government would continue seeking accountability through the repatriation of foreign assets held by the defendants.

On top of their jail sentence, Butalid and Adlawan were also each sentenced for one count of conspiracy to commit an offense against the United States and one count of money laundering conspiracy. Both were ordered to serve three years of supervised release and complete 100 hours of community service.

The investigation was conducted by IRS-Criminal Investigation, the Department of Interior Office of Inspector General, the FBI and the CNMI Office of the Public Auditor. — Camille Diola