THE Supreme Court (SC) has given the go signal to prosecute for estafa the owners of Legacy Group’s rural banks, its 86 depositors and a bank branch manager for duping the government through fraudulent deposit insurance claims amounting to P98.73 million.
In an 18-page decision penned by Associate Justice Presbitero Velasco Jr., the SC’s Third Division ordered the reinstatement of the June 3, 2016, resolution issued by then-Justice Secretary Emmanuel Caparas. The resolution called for the filing of charges against spouses Manu and Champa Gidwani, Rizal Commercial Banking Corp. (RCBC) Bacolod Main Branch Manager Andrew A. Jereza and 86 others for estafa through falsification of documents, perjury and money laundering.
The High Tribunal set aside the January 31, 2017, decision of the Court of Appeals (CA) which reversed Caparas’s resolution and ordered the dismissal of the complaint.
In its January 31 decision, the appellate court did not give merit to the allegations of the petitioner, the Philippine Deposit Insurance Corp. (PDIC), because of its failure to prove that Manu is the owner of all the accounts subject of the complaint.
However, the SC ruled that the CA erred in holding that Caparas gravely abused his discretion in reversing an earlier resolution issued by then-Justice Undersecretary Jose Justiniano which upheld the Department of Justice Task Force’s recommendation to dismiss the complaint against the respondents.
It indicated that the CA prematurely ordered the dismissal of the complaint considering that it is still in the stage of preliminary investigation and has yet to be heard in a full-blown trial.
“Whether there indeed existed an agreement between respondent Manu and the individual depositors is a matter best left ventilated during trial proper, where evidence can be presented and appreciated fully. Suffice it to state for now that the Court herein finds probable cause to charge respondent for estafa and money laundering,” the SC declared.
The case stemmed from the order of the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) to shut down 13 rural banks controlled by the Legacy Group of Cos. and placed them under receivership of the PDIC.
The Gidwanis together with 86 other individuals represented themselves to be the owners of 471 deposit accounts with Legacy banks and filed claims with the PDIC.
The claims were processed and granted, resulting in the issuance of 683 Land Bank of the Philippines checks with the total face value of P98.73 million in favor of the 86 individuals.
While the checks issued were crossed-checks “payable to the payee” account only, the said individuals did not deposit the checks in their respective bank accounts.
Instead, the checks were credited to a single account with RCBC owned by the Gidwanis, allegedly in connivance with Jereza.
The PDIC discovered the anomaly when the checks were cleared and returned to it.
Caparas ruled that had the depositors truthfully divulged to the PDIC that the true and beneficial owner of the bank accounts was Manu, the PDIC would not have been duped into treating the bank accounts individually and separately. He said the PDIC would have only paid the Gidwani spouses P250,000 as the maximum deposit coverage pursuant to Section 4 (g) of the PDIC Charter and not P98.73 million.
Caparas ruled that the heavy influx of deposits to the Gidwani spouses’ account should have already prompted RCBC and Jereza to file a suspicious transaction report with the Anti-Money Laundering Council (AMLC).
In upholding Caparas’s resolution, the SC held that the former justice secretary “has the power and discretion” to assess the documents and pleadings submitted to him for review and come up with his own finding.
“He is not bound by the rulings of his predecessors because there is yet to be a final resolution of the issue; the matter is still pending before his officer after all. To hold otherwise would render the filing of the motion a futile exercise, and the recourse, pointless,” the Court pointed out.
“It was, therefore, plain error on the part of the CA to have ruled that SOJ [Secretary of Justice] Caparas virtually had no option but to affirm the findings of the DOJ Task Force and of SOJ Justiniano as to the alleged absence of probable cause to charge respondent,” it added.
Concurring with the ruling were Associate Justices Marvic Leonen, Samuel Martires and Alexander Gesmundo.