The Philippine Deposit Insurance Corporation (PDIC), statutory receiver of the closed Rural Bank of Bacolor, Inc. (RBBI) in Pampanga, filed on October 18 with the Department of Justice (DOJ) a criminal complaint for large scale estafa, in violation of the Revised Penal Code, against three of the bank’s former officers, including the President, and a relative of RBBI’s controlling stockholders. The Monetary Board placed the Rural Bank of Bacolor under PDIC receivership on January 8, 2009. The bank had three banking units located in Bacolor, Madapdap and Sindalan, Pampanga.

PDIC complained that respondents Mary Lynn C. Naguit (President and Manager), Sylvia R. De Castro (Assistant to the President), Mary Jane C. Acol (Vice President and Internal Auditor), and Rico De Castro (family relative of the respondents) committed the crimes of large scale estafa, falsification of commercial documents, and creation of fictitious loans.

Based on the complaint, the respondents, in conspiracy with and mutually helping one another, misappropriated, converted and diverted funds aggregating Php21,418,096.06. These funds, instead of being used for the bank’s primary purposes, were siphoned off from the bank from the period May 2006 to December 2008. This was carried out by the respondents by obtaining funds through cash advances which were covered up through falsification of commercial documents such as application forms, promissory notes, disclosure statements and endorsements of cashier’s checks. With this, respondents made it appear that the funds were given to a total of 168 borrowers when, in fact, none of the supposed borrowers received the purported loan proceeds.

Furthermore, the affidavits of the former loan bookkeepers, cashiers and tellers of RBBI stated that respondents Naguit and Sylvia De Castro personally instructed them to create fictitious loans for cash advances and falsify commercial documents to cover up these cash advances. The former employees were also instructed to create fictitious borrowers and forge their signatures to make it appear that they were legitimate borrowers who intended to pay their loans. Respondents Acol and Rico De Castro were accused of directly receiving the proceeds from the fictitious loans.Findings of the investigation showed that the large scale estafa and misappropriation of funds were undertaken in all three banking units of RBBI.

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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