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Court orders imprisonment of 2 bankers for estafa

The Acting Presiding Judge of the Manila Regional Trial Court (RTC) found two bankers, father and son, guilty of estafa and ordered their imprisonment up to 14 years and that they pay damages in the amount of P3.03 million. The estafa case was filed by the Philippine Deposit Insurance Corporation, the Statutory Receiver of closed banks, and docketed as Criminal Case No. 03-211251.

Acting Presiding Judge Buenaventura Albert J. Tenorio, Jr. of the Manila RTC Branch 15 found Luis Co and son Alvin Milton Co, former President and Assistant Vice President of the closed Jade Progressive Savings and Mortgage Bank, respectively, guilty of estafa under Article 315 of the Revised Penal Code for defrauding the bank in the aggregate amount of P3,032,909 by making it appear that said amount was paid to Acme Investigation Services Inc. for surveillance and security services.

In his decision on February 28, 2013, Tenorio found beyond reasonable doubt that the Cos caused the disbursement of P3.032 million in bank funds to a security agency found to be non-existent and that the funds were traced to have been deposited to a fictitious bank account opened by the accused for their own personal use and benefit. Officers from the Philippine Association of Detective and Protective Agency (PADPAO) and the Security Agencies and Guards Supervision Division (SAGSD) of the Philippine National Police (PNP) testified that Acme Investigation Services Inc. is neither a member of PADPAO nor registered with the SAGSD. PADPAO is the umbrella organization of all security agencies in the Philippines. Judge Tenorio also added that said security agency was not registered with the Securities and Exchange Commission (SEC).

The accused were convicted and sentenced to suffer imprisonment for a minimum of four years up to a maximum of 14 years and 8 months. In addition, the Cos were also ordered to pay the closed bank, its depositors, creditors and the Bangko Sentral ng Pilipinas (BSP) the total amount of P3,032,909, the same amount subject of the estafa case.

Meanwhile, accused Luis Co was granted his prayer for temporary liberty given his option to either file a Motion for Reconsideration or file an appeal. On the other hand, a warrant of arrest has already been ordered to be issued against Alvin Co.

The Cos argued that they did not commit any deceit or fraudulent act to defraud the bank, and that their criminal liability cannot be established by the mere fact they were signatories to the documents presented in the case. Judge Tenorio, in his decision, said, “They cannot feign innocence by arguing that they are not expected to scrutinize every document presented to them.” He said that by holding key positions in the bank as president and assistant vice president, the father and son were expected to take responsibility in verifying whether the bank had an existing contract with Acme, given the amount the bank is paying the security agency on a monthly basis.

PDIC General Counsel Romeo M. Mendoza, Jr. welcomed the court’s decision stating that this supports PDIC’s overall mandate of helping maintain the stability of the banking system. “Filing the appropriate cases against erring bankers and prosecuting them are the lesser known functions of PDIC as Co-regulator of banks,” he said. “The purpose of this is to bring to justice the guilty parties and deter the others from erring, thereby protecting the country’s banking system.”

The Monetary Board ordered the closure of Jade Progressive Savings and Mortgage Bank and was placed under PDIC receivership in December 2000. The bank is currently under liquidation.

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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 permanent and continuing 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.

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