The Philippine Deposit Insurance Corporation (PDIC) filed on October 10 with the Department of Justice (DOJ) a criminal complaint for syndicated estafa against six former officers, including the President and Chairman and relatives of controlling stockholders, of the closed Rural Bank of Milagros (Masbate), Inc. (RBMI). The Monetary Board placed the Rural Bank of Milagros under PDIC receivership on November 29, 2007.

The PDIC filed charges of syndicated estafa through falsification of commercial documents, in violation of the Revised Penal Code, against RBMI former officers Rosie V. Besonia (Vice President, Manager and Stockholder), Mizel S. Tarantan (Corporate Secretary, Cashier and Stockholder) and Larry Descalzo Estrella (President, Chairman and Stockholder), Emmie Tamayo Estrella (Stockholder); and family relatives of controlling stockholders, Luis Romero Estrella and Eugene Tamayo Estrella, who were also borrowers of the bank.

In its complaint, the PDIC alleged that respondents, in conspiracy with one another, with abuse of confidence reposed in them as directors, officers, stockholders and related interests (DOSRI), diverted and converted the bank’s funds aggregating Php0.86 million initially as loans to the Estrellas. These loans were approved by respondents Besonia and Tarantan from July 14 to November 29, 2006.

The PDIC complaint further indicates that after the loan proceeds were received by the Estrellas and recorded as loans receivable in the bank’s books, the said loans were subsequently fraudulently removed from RBMI’s outstanding liability records through the falsification of official receipts, accounting tickets, proofsheets, and loan schedule days prior to the bank’s closure. This was done to make it appear that the loans had been paid when in fact, no loan payments were received by the bank.

Affidavits of two former RBMI bookkeepers that are attached to the complaint state that there was no actual cash transacted to pay for the loans of the Estrellas, and that days prior to the bank’s closure, there were no more financial transactions in RBMI. The bookkeepers attested that it was upon the instruction of Besonia and Tarantan that they signed the official receipts as proof of payment.

The Corporation continues to pursue legal actions against bank officials and personnel who have been found to have engaged in unsafe and unsound banking practices, which pose grave threats to the stability of the country’s banking system. 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 pursuit 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, as well as to maintain financial stability.

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