Mother, Daughter Convicted in U.S. “Ghost Purchase” Fraud Scheme

A Filipino mother and daughter were sent to prison in the United States after authorities uncovered a brazen “ghost purchase” scam that allegedly stole more than half a million dollars meant for students in the Northern Mariana Islands.

Judge Ramona Manglona of the District Court for the Northern Mariana Islands sentenced Clarissa Adlawan, 55, to four years in prison, while her daughter, Giselle Butalid, 34, was sentenced to one and a half years behind bars after both admitted to procurement fraud and money laundering charges.

Federal prosecutors said the two used their company, One Legacy LLC, to siphon off federal grant money intended for the CNMI Public School System (PSS).

Investigators discovered that Butalid, a former PSS employee, allegedly forged documents to cover up so-called “ghost” purchases fake transactions for educational materials that were never delivered.

Instead of going to classrooms and students, prosecutors said the money allegedly funded luxury trips to the Philippines, expensive hotel stays, large cash withdrawals, and even the construction of a nine-room house in the Philippines.

Court documents revealed that the pair received payments worth $50,000 and $52,500 for online learning materials that PSS never actually ordered. Shortly after the payments cleared, the mother and daughter reportedly flew to the Philippines and withdrew around $10,000 in cash from ATMs.

Authorities also uncovered another fraudulent payment worth $113,020. Prosecutors said the money was quickly followed by cash withdrawals totaling about $65,000 before another overseas trip.

According to prosecutors, the final payout happened shortly after PSS confronted Butalid about her links to the companies involved in the transactions. Although she resigned, prosecutors claimed she stayed long enough to carry out one last fraudulent deal.

U.S. Attorney Shawn Anderson said the fraud went beyond stealing taxpayer money because students were the real victims.

“The defendants’ conduct went beyond defrauding government agencies. Ultimately, children were deprived of educational resources and opportunities to learn,” Anderson said.

Aside from prison time, the court ordered the forfeiture of the defendants’ properties and directed the pair to repay $548,788 in restitution.

Prosecutors also accused Adlawan of hiding information about the nine-room house allegedly built using stolen school funds. Because of this, the court denied her additional sentencing consideration despite her guilty plea.

Authorities warned that Butalid could potentially lose her U.S. citizenship because of the conviction, while Adlawan is expected to be deported to the Philippines after serving her sentence.