Cost of Legacy mess so far: P11-B

By Rafael Santos, ABS-CBN News

Posted at Nov 09 2010 08:50 PM | Updated as of Nov 10 2010 09:01 AM

MANILA, Philippines - As investigation and validation of the deposit accounts in 12 Legacy Group rural banks near completion, the Philippine Deposit Insurance Corporation said it has already shelled out a total of P11 billion to depositors as of October 2010.

This amount represents 77% of the total P14.2 billion worth of deposit insurance claims filed by clients against depositors and investors of various rural banks that belong to the nationwide network of the controversial Legacy Group of Companies.

In a briefing on Tuesday, PDIC President Jose Nograles said they have validated 125,416 deposit accounts with claims amounting to P13 billion. These represent 93.1% of the number of insured deposit accounts in the rural banks, and 93% of insured deposits, respectively.

Nograles added that aggregate claims worth P 788 million were turned down because of fraudulent transactions or non-existent accounts.

The PDIC said most of the fraudulent transactions involved the 'siphoning' of funds from active deposits that the bank then used for other purposes.

It determined that most of the money deposited into the Legacy Group were legitimate and that honest clients were lured by unusually high interest rates on bank deposit accounts.

Independent audit firm Punongbayan and Araullo, which helped comb through the bank records and in building evidence for the case against De los Angeles, et al, computed damages at P8.4 billion.

A total of 26 cases, including syndicated estafa raps, have been filed against Legacy Group chief Celso delos Angeles and the company's officers. De los Angeles, a banker-turned-town mayor, is currently in jail.