In Porac, Pampanga, near the border of Angeles City, stands the Grand Palazzo Royale, a sprawling compound that houses a resort, a golf course, and a country club – or at least that’s what old satellite images from Google Maps show.

In 2019, three interconnected companies arrived on the scene and turned the compound to a self-sustaining estate, like a mini-city, that has a restaurant, grocery, karaoke bar, pharmacy, and salon. But most of all, it had Lucky South 99, a shady Philippine Offshore Gaming Operator (POGO) whose workers claimed to have been trafficked and tortured.

Documents reviewed by Rappler, and statements from the operative unit that’s at the forefront of the current POGO crackdown, paint a picture of how in-sync and organized POGOs are – and how long it takes and how tortuous it is to pin them down for their alleged illegal activities.

Rappler has also confirmed that Lucky South 99 engaged the services of a convicted pork barrel scam player, Dennis Cunanan, to run its corporate communications and government relations arm.

Are the regulators simply incompetent, negligent, or worse, complicit?

“At the end of the day, I’m sure there has to be a bigger investigation on the matter. At this point we have no evidence pointing the other way. We’re agnostic and neutral about that, but at one point somebody needs to look into that,” Winston Casio, spokesperson of the Presidential Anti Organized Crime Commission (PAOCC), told Rappler in an interview with John Nery on In The Public Square.

Lucky South 99

Before Lucky South 99 arrived in Porac, the Grand Palazzo Royale looked like a typical big resort in Pampanga, with the same palatial designs, weighed down by wear and tear over the years. An October 2018 Google Street View reveals the traces of intended grandeur, with quirky marble fixtures and a faux armored knight to boot.

The compound was initially estimated to be 10 hectares wide, but it could actually be bigger because authorities have not been allowed to reach some restricted areas. The previously raided Baofu compound in Bamban, Tarlac is seven hectares, and the Grand Palazzo Royale is “thrice as big,” said PAOCC chief Undersecretary Gilbert Cruz during the Kapihan sa Manila Bay forum on Wednesday, June 12.

The Lucky South 99 building, which is in the Thai Royal Court of the compound, according to its business records, was set up in July 2019.

It began when a realty development firm, Whirlwind Corporation, moved from the adjacent Fil-Am Friendship Hi-way in Angeles City to the Thai Court compound in Porac. Whirlwind got incorporated with an initial capital of P312.5 million, by Filipinos Josefina Balisacan, Stephanie Balisacan Mascarenas, Raymond Calleon Co, Randel Calleon Co, and Chinese national Duanren Wu. They all invested P62.5 million each.

Two months after, in September 2019, Lucky South 99 Outsourcing Inc. registered with the Securities and Exchange Commission (SEC) with a paid-up capital of P15 million. Stephanie Balisacan Mascarenas of Whirlwind, was also a Lucky South incorporator and its biggest investor (P9 million). The rest of Lucky South incorporators were Filipinos Michael Bryce Balisacan Mascarenas and Rodrigo Bande, and Chinese Jing Gu and Xiang Tan, all with equal investments of P1.5 million each.

Whirlwind leased the compound to Lucky South 99 and Xinsheng IT Start-Up Park, Rappler learned. Based on documents Rappler reviewed, these two companies are connected through one person: Katherine Cassandra Ong.

Ong was identified as a representative of Xinsheng, according to an informed source, and it was Ong, too, who applied for Lucky South’s Letter of No Objection (LONO) with Porac city hall. The LONO application – a requirement by Philippine Amusement and Gaming Corporation (Pagcor) to establish a gaming site – was granted in November 2019 after it was signed and approved by Porac City Mayor Jaime Capil.

By 2022, Lucky South’s 99’s Board of Directors was replaced with new members, according to SEC documents. None of the original incorporators remained as officers. The new president, with 40% shares, was Singaporean Zhang Jie, according to the company’s 2022 general information sheet. The other new officers are Filipinos Ronelyn Baterna (30%), Norman Macapagal (10%), Lowe Yambao (10%), and Jessie Tallos (10%).

According to other government documents we obtained, Dennis Cunanan, a Kapampangan who was also engaged by Lucky South 99, is the president of the Advantage Management Consulting Philippines Inc (AMCPI) which has field operations in Angeles City, Pampanga. Although convicted of graft, it is a bailable offense so he is entitled to freedom while appealing convictions. He has been acquitted of other scam charges.

Cunanan used to head the now-abolished Technology and Livelihood Resource Center (TLRC), a government owned and controlled corporation (GOCC), which was found to be instrumental in funneling lawmakers’ discretionary funds to the fake projects of businesswoman Janet Napoles. Also referred to as the “pork barrel scam queen,” Napoles remains in prison after her conviction and charges of plunder, a non-bailable offense.

“Mr. Cunanan’s consultancy work with the POGO sector is entirely legitimate and was done within the bounds of the law. Mr. Cunanan served solely as an independent consultant. His involvement was limited to providing consultancy on corporate communication and government relations services,” said Cunanan’s lawyer in a statement sent to Rappler on Thursday, June 13.

“At no point did he hold any executive or managerial position, nor was he involved in the day-to-day operations or strategic decisions,” said the statement.

Lucky South goes North

After the rescue of tortured workers in Lucky South on June 4, Capil said he “lauds the efforts of the PAOCC in helping us combat these heinous crimes.”

“We fully condemn any act of torture, violence or any form of crime within our territory,” he added.

But it wasn’t just the local government that the shady POGO got past. We got verified information that in 2020, Lucky South also secured offshore gaming licenses to operate in two locations in Laoag City, Ilocos Norte, home province of President Ferdinand Marcos Jr.

Lucky South voluntarily canceled its Laoag licenses on March 22, 2023. Lucky South 99’s license for the Thai Royal Court, on the other hand, expired in October 2023, which Katherine Cassandra Ong tried to renew via another application.

On May 22, 2024, at the height of investigations into the Bamban POGO and Mayor Alice Guo, Pagcor denied Lucky South 99’s application citing “concerns” related to the Bamban case.

“During the Senate hearing…it was found that numerous companies including Lucky South are involved in illegal operations in Zun Yuan Technology Inc.’s premises in Baofu compound, Bamban Tarlac,” Pagcor’s Offshore Gaming License Department explained to Lucky South.

But by this time, the compound had already effectively established an empire: 46 buildings overall, 26 of which have yet to be searched, all taller than the Bamban compound.

“Probably what needs to be looked into is what the regulators’ capability should be,” said Casio.

Pagcor stations its personnel in the premises of these POGOs, and in the Baofu compound raid in Bamban, Casio said they got there in time for the exchange of shifts of the Pagcor staff. “[Their] presence is not enough,” said Casio, “I doubt they are involved. Kulang lang ang capability nila (they just lack the capability).”

‘We’ve been burned many times’

The Lucky South 99 operation was not a raid, nor was it technically a rescue, as PAOCC had to couch it using the soft term, “welfare check,” since their search warrant “did not contain the persons and items to be searched and seized.”

A search warrant names the alleged trafficked workers. Philippine laws require search warrants to specify what needs to be searched or even seized. When cops go beyond the coverage of a warrant, they risk wasting efforts because the seized items would eventually become inadmissible in court.

Court documents showed there was a back-and-forth between law enforcement and Judge Belinda Rama of Malolos in the nearby province of Bulacan. It was Rama who, on June 4, granted the search warrant application of the Criminal Investigation and Detection Group (CIDG) – PAOCC’s law enforcement partner – to search for workers of Lucky South suspected of being trafficked.

PAOCC went to the site on June 4 after getting the initial search warrant, but they saw more than a hundred foreigners leaving the compound. The following day, on June 5, CIDG went back to the Malolos court as part of the procedure to report back to the court.

But they told the court the search warrant was not implemented because “the occupants of the subject premises sought to be searched [had] already fled…[en masse].” This is the time the June 4 search warrant was retracted. Judge Rama thought it best to conduct a clarificatory hearing, but ultimately decided to deny the application.

Judge Rama said there “was no compelling reason” why her court in Malolos had to grant the warrant, when it was outside her jurisdiction. CIDG said they were trying to avoid a leak, but Judge Rama said there “was no sufficient evidence” of a leak.

Cruz said this was not the first time they believed their operation was compromised.

“This is not the first time we were burned, this is the third time. Suwerte lang kami na every time na nasusunog ang trabaho, nakakarating pa rin kami, in the case of Porac, may mga inabot pa po kami na illegal workers,” said Cruz in the Kapihan forum. (We are just lucky that every time our operation is compromised, we still get there in time, in the case of Porac, we got there in time to see the illegal workers.)

Following the Porac warrant fuss, Senator Sherwin Gatchalian said POGOs may have infiltrated both law enforcement and the judiciary. Supreme Court spokesperson Camille Sue Mae Ting told reporters that the High Court will probe into these allegations.

‘Hiding in plain sight’

“[POGOs] are hiding in plain sight,” said Casio.

There are around 49 licensed POGOS in the Philippines, most of them in Metro Manila, according to PAOCC. It’s been reduced to that number because “more or less 300 POGOs did not renew,” said Cruz. PAOCC has so far dismantled eight illegal POGO hubs.

Technically, they are not called POGOs anymore, but IGL or Internet Gaming Licensees. This name change was implemented by Pagcor in October 2023, and weeds out service providers.

Still, Cruz said, these shady companies are still able to employ illegal ways to run their scams: fugitives get into the country, and into these hubs, with a brand new identity supported by government IDs.

In Porac, more Chinese service uniforms have been discovered, including one that bears the logo of the China’s People’s Armed Police (PAP). In one building, a Chinese flag was found standing next to the Philippine flag.

China has been working closely with Philippine law enforcement personnel – the Chinese embassy in Manila has also been publicly supportive of the POGO raids.

Law enforcement officers in Manila told Rappler that their Chinese counterparts have, for the most part, been helpful partners in anti-POGO operations. Documents obtained by Rappler show that it was the Chinese embassy in Manila that helped confirm the identity of its citizens caught in the raid, including the six wanted fugitives.

Because of the veil of regularity of these businesses, with Pagcor saying in a recent statement that IGLs contributed P5 billion to their 2023 revenues and that “we should not demonize our licensed gaming operators,” PAOCC operates on the basis of human trafficking.

They receive a distress call, or process intelligence, and they apply for search warrants to rescue victims. Human trafficking is also the basis for the charges they pursue. There’s been no robust mechanism yet to target illegal POGOs using the framework of financial crimes, or even immigration crimes.

What PAOCC does after every raid is to seek forfeiture of assets, based on violations such as trafficking and torture.

It’s a slow way, but better than nothing.

“Alam naman nating lilipat sila, pero at least nababawasan natin at nasasaktan natin sila kahit papaano,” said Cruz. (We know they’ll just relocate, but at least we lessen their number, and we hurt them even just a little bit.) – with reports from Bea Cupin, Jairo Bolledo, Joann Manabat