PDIC files estafa cases vs 'fake' Legacy depositors


Posted at Jan 03 2013 05:01 PM | Updated as of Jan 04 2013 01:02 AM

MANILA, Philippines - The Philippine Deposit Insurance Corporation (PDIC) has filed estafa cases with the Department of Justice against 88 individuals who allegedly participated in a conspiracy to defraud the government by as much as P97.73 million. 

In its complaint, the PDIC alleged spouses Manu and Champa Gidwani and 86 other alleged "depositors" had misrepresented themselves as insured depositors of the Legacy banks. 

"PDIC vigorously pursues legal action against these parties that circumvent the deposit insurance scheme for their personal benefit. The quest for justice against erring depositors is an important undertaking of PDIC to protect the Deposit Insurance Fund, PDIC’s funding source for payment of insured deposits," the PDIC said in a statement. 

The Gidwani couple were found to conspired to falsify commercial and official documents, in an attempt to perpetrate deposit insurance fraud. 

The scheme involved acts of misrepresenting themselves to be the owners of certain deposits; filing claims for deposit insurance and receiving deposit insurance payments from the PDIC when they are not the true owners of the said deposit accounts maintained with the Legacy banks. 

In December 2008, the Monetary Board ordered the closure of Legacy banks, considered the biggest financial scam in the Philippine banking system. The PDIC paid an estimated P12 billion in deposit insurance payments to Legacy depositors.

The deposit insurance fraud was discovered when a bank branch in the Visayas region accepted 683 "crossed checks" issued by PDIC as deposit insurance payments to the 86 individuals who claimed to be Legacy depositors. The checks were deposited to a single account despite PDIC’s specific instruction that the checks should be deposited to the payees' account only. 

Further investigation showed the Gidwani couple and the 86 individuals maintained 471 accounts in various Legacy banks amounting to P118.19 million. These accounts were opened and funded through checks issued by an individual or through fund transfers from a single account. 

The probe also showed 10 "depositors" with a combined P20.96 million in deposits were employees or household help of the Gidwani couple. 

Under the PDIC Charter, all deposits in a bank maintained in the same right and capacity of the depositor for his benefit either in his own name or in the name of others shall be consolidated into one deposit account entitled to the maximum deposit insurance coverage. 

At the time of the closure of the Legacy banks, the maximum deposit insurance coverage was P250,000.