The central bank has filed cases before the Department of Justice against officers and employees of rural banks under the Legacy Group.
Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco, in a statement, said 18 officers, employees and agents of four rural banks belonging to the Legacy Group were charged with 116 counts of falsification of public and commercial documents, plus two counts of false statements.
The banks were identified as Rural Bank of Parañaque, Rural Bank of DARBCI in South Cotabato, Rural Bank of San Jose in Batangas and Bank of East Asia.
BSP said the complaints filed were the second wave it lodged against Legacy banks. BSP filed last January 5 criminal charges against 16 Legacy officers, employees and agents for 49 counts of falsification of public and commercial documents plus one case each of false reporting and false statement.
Involved in the first wave of complaints were officers and personnel from Rural Bank of Paranaque; Rural Bank of San Jose in Batangas; Dynamic Rural Bank in Calatagan, Batangas; and Rural Bank of DARBCI in South Cotabato.
"The cases were filed as BSP's investigations uncovered massive diversion of funds by said banks using fictitious loans," Tetangco said.
Tetangco said that during the validation process, many of the bank's borrowers denied having obtained loans from the closed banks while others admitted having signed blank documents in consideration of commission fees ranging from P10,000 to P15,000 for supposed loans amounting to millions of pesos.
Tetangco said that falsified documents were discovered that were used to support alleged loans. Public documents reportedly falsified included Mayor's Permits and Department of Trade and Industry Registration Certificates. The fictitious loans were allegedly used to siphon money from the banks.
Named in the charge sheets were Rural Bank of Parañaque president Virgilio A. Odejar and vendor Marcos G. Ong; Rural Bank of San Jose, Inc. president Zacarias A. Carticiano, officer-in-charge Teodora E. Comple, compliance officer Jose Girlo P. Caramat and Roy Hilario, President of Fusion Capital Corporation.
From Rural Bank of DARBCI Inc., the BSP filed cases against bank president William Escalante, bank manager Romarico B. Tanedo, bank cashier Phoebe S. Babor, Jacqueline M. Araneta (accountant), Joey C. Corpuz (Loans Head), Filomena Duhaylungsod (Loan Officer) and agents Rebecca Corpuz, Enrique Sillo, Joy Melody Narvaez, and Perfecto Narvaez.
From Bank of East Asia, BSP filed complaints against bank president Ernest Q. Jurado, Sr. and agent Jerry Piape.
The founder and owner of the Legacy Group, Sto. Domingo, Albay Mayor Celso delos Angeles, was not included in the second wave of cases.
The filing of cases before the DOJ against officers and employees of the rural banks under the controversial Legacy Group would initiate the process for the possible filing of criminal charges before a court.
BSP deputy director Nestor Espenilla said that if not for the case filed by the Legacy Group of rural banks that invoked deposit secrecy on the examiners of the BSP, the group could have been stopped as early as 2007.
"We have been examining this group since 2005 and in 2007, we examined them again and our findings were validated," said Espenilla. "Not only were they validation, the situation had actually turned even worse because by then, the banks in the group were already severely undercapitalized."
Espenilla said the Legacy banks were put under the so-called prompt and corrective action category where they were compelled to resolve their issues once and for all.
"The unsafe and unsound practices they were involved in were, notwithstanding our orders, still being perpetrated," he said. "We had enough reason to take drastic action and put them under receivership."
Espenilla said the BSP was only able to move against the Legacy Group in late November when the Supreme Court issued a temporary restraining order against the Court of Appeals.
"People should know that it was a struggle all the way," Espenilla said. "We were not harassing these banks, and we were not sleeping on our jobs."
Espenilla said the Legacy banks were caught using manufactured official documents ranging from trade certificates to mayor's business permits which were then used for fictitious loans.
"Getting deposits from the public was only the first part of the scheme," Espenilla said. "The second essential part is taking that away and fictitious loans were just one scheme. There were many others."
Espenilla said the depositors of the banks of Legacy Group now had only the PDIC as their only recourse by claiming their deposit insurance of up to P250,000.