August 4, 2016

The Philippine Deposit Insurance Corporation (PDIC) filed with the Department of Justice (DOJ) a criminal complaint against three former officers and employees of the closed Rural Bank of Caba (La Union), Inc. ("RB Caba") for qualified theft and for conducting business in an unsafe and unsound manner that resulted in estimated losses of about P1.69 million to the bank. The complaint filed on June 6, 2016 is under preliminary investigation of the DOJ.

RB Caba is a single-unit bank ordered closed by the Monetary Board and placed under receivership of the PDIC on December 10, 2015.

The respondents Josefina D. Fangon, former Manager/Consultant; Evelyn N. Alcantara, former Cashier; and Eileen G. Cabanban, former savings bookkeeper were charged for taking advantage of their positions in the bank with a common purpose of personally benefitting from the savings of several depositors of RB Caba.

Respondents are facing 11 counts of qualified theft under Articles 308 to 310 of the Revised Penal Code. Qualified theft involving the amount of P1.69 million is a non-bailable offense and is punishable by reclusion perpetua or imprisonment of 20 to 40 years. Meanwhile, conducting business in an unsafe and unsound manner is in violation of Republic Act (RA) 3591, as amended or the PDIC Charter, and of RA 8791 or the General Banking Law of 2000. The offense is punishable by imprisonment of 6 to 12 years or a fine of not less than P50,000 but not more than P10 million, or both, at the discretion of the court.

In its complaint, PDIC alleged that for a period of eight years, from 2007 to 2015, and without authority from the bank, the respondents appropriated money generated as deposits for their own benefit. The elaborate scheme, according to the investigation conducted by PDIC, involved the non-recording of deposits in the books of the bank, deposit lapping or the fraudulent practice of concealing theft of cash from a customer's payment by stealing cash from the next customer's payment, and misreporting of deposit and withdrawal transactions in the bank's books of 11 deposit accounts that respondents allegedly manipulated.

Depositors of these accounts identified respondents Fangon and Alcantara as the ones who received their cash deposits from 2007 to 2015. Examination of the depositors' passbooks and the bank's ledger as of bank closure showed discrepancies totaling P1,685,504.39. Meanwhile, as savings bookkeeper, Cabanban was responsible for posting of day to day transactions on passbook and manual subsidiary ledgers to the bank system.

Filing of charges against officers of the closed RB Caba is in support of PDIC's efforts to bring to justice parties that engage in acts that will put depositors and the Deposit Insurance Fund (DIF) at risk. 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. The PDIC is mandated to generate, preserve, maintain faith and confidence in the country's banking system, and protect it from illegal schemes and machinations.

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The Philippine Deposit Insurance Corporation (PDIC) was established on June 22, 1963 by Republic Act 3591 to provide depositor protection and help maintain stability in the financial system by providing deposit insurance. Effective June 1, 2009, the maximum deposit insurance coverage is P500,000 per depositor. All deposit accounts by a depositor in a closed bank maintained in the same right and capacity shall be added together. A joint account shall be insured separately from any individually-owned deposit account.

PDIC news/press releases and other information are available at the website, www.pdic.gov.ph.