Economic sabotage raps filed vs 19 ex-bank executives

The Philippine Deposit Insurance Corp. (PDIC) has filed with the Department of Justice (DOJ) charges of syndicated estafa and economic sabotage against 19 former directors, officers and employees of the closed G7 Bank Inc. and a person related to one of the bank’s officers. The case was filed on May 9.

Charged with conspiring to misappropriate, convert and divert G7 Bank funds solicited from the general public for a total amount of P208.55 million were former G7 Bank Chairman Fidel L. Cu, Directors Allan S. Cu, Marietta C. Cu, Norma B. Cueto (also senior vice president [SVP]/treasurer), Lucia C. Pascual (also SVP and treasurer; and Credit Committee member); Independent Directors Ramon C. Borja and Candelaria R. Soler; Naga Business Center Head Dennis P. Cu (also Credit Committee chairman); Ma. Lourdes Ang, branch manager; Marilyn Manaoag, assistant treasurer; Jose Eduardo Imperial, Loan Division head; Oscar P. Ubalde and Cristeta R. Calinog, Credit Committee members; Gloria M. Templonuevo, Accounts Servicing head; Eduardo B. Samo Jr., Credit Services head; Sancho E. Zate, account officer; Gaudencia R. Recoso, processing staff; Eduardo de la Peña, messenger; and George Lim, father-in-law of Allan Cu.

The PDIC’s complaint arose from the findings of the forensic accounting team from SGV that from May to October 2007, Cu et al. falsified commercial documents and made it appear that 19 people and two corporations applied for 37 loans for an aggregate amount of P208.55 million. The fictitious loans endorsed by the Credit Committee were shown to have been processed to give a semblance of legitimacy.

Respondents were accused of conspiring to make it appear that the borrowers on record received net loan proceeds amounting to P191,740,250.30 through cashier’s checks and checks but these were found to be payable to “cash” and to respondents Lim and Recoso. The loan proceeds were received by respondents Recoso, Lim, de la Peña and Manaoag.

The alleged borrowers denied applying for the loans and this was supported by investigation findings that the loan proceeds were actually received by the respondents themselves. The complaint also alleged that the bank’s board members knew about the fictitious nature of the loans, which the board approved even before the loan applications were submitted by the alleged borrowers.

The PDIC continues to pursue legal actions against bank officials and personnel who engage in unsafe and unsound banking practices that pose grave threats to the stability of the country’s banking system.  Republic Act 3591, as amended, or the PDIC Charter mandates the PDIC to strengthen the mandatory deposit insurance-coverage system to generate, preserve and maintain confidence in the stability of the banking system, as well as protect it from illegal schemes and machinations.  In relation to its functions as co-regulator of banks, deposit insurer and receiver/liquidator of closed banks, the PDIC is authorized to conduct investigations and file necessary cases against erring bank officials and unscrupulous individuals. The quest for justice against erring bank owners, officers and employees is an important undertaking of PDIC to protect the Deposit Insurance Fund, PDIC’s funding source for payment of insured deposits.