Ex-Ombudsman leads case versus Legacy owner

By CARMELA FONBUENA, abs-cbnnews.com/Newsbreak

Posted at Feb 27 2009 05:30 PM | Updated as of Mar 03 2009 02:18 AM

The controversial owner of the bankrupt financial services Legacy Group will be facing a legal fight against the man behind convictions of high profile individuals like ousted former president Joseph Ejercito Estrada and Armed Forces of the Philippines former comptroller Gen. Carlos Garcia

Legacy Group's politically savvy founder, Celso De Los Angeles, will be up against former Ombudsman Simeon Marcelo.

Marcelo is heading the legal team that filed a syndicated estafa case against Delos Angeles and six others who are involved in Legacy Group’s operations.

Bangko Sentral ng Pilipinas (BSP), the regulator that tried to close Legacy's 14 rural banks, hired Marcelo and his legal team.

BSP lawyer Juan de Zuniga Jr. confirmed Marcelo's involvement a text message: "[Marcelo] is our external counsel in the Legacy criminal cases. His law firm was authorized by the Monetary Board."

Strategist

Lawyer Elmar Galacio, who is in charge of the case, which the legal team filed before the Department of Justice on Thursday, referred to Marcelo as the 'strategist.'

“He’s the head strategist and tactician. I report to him for strategy,” Galacio said.

Marcelo and Galacio belong to the Villaraza Cruz Marcelo and Angangco law firm, which is among the country’s most influential law firms. It has been BSP’s counsel in various cases including the long-standing case against another controversial bank, Banco Filipino.

While BSP had long alleged that Delos Angeles is the “mastermind” of “an organized syndicate that from day one was created to exploit human nature,” this is the first case that BSP finally implicates him.

“It’s not an easy case. He works through fictitious third parties to siphon funds from the bank and then funnel the funds to corporations he control,” Galacio told abs-cbnNEWS.com./Newsbreak.

The other respondents are:

* Alexis Petralba, consultant of Delos Angeles
* Namnama Pasetes, chief finance officer of Legacy Consolidated Plan Inc. (LCPI)
* Carolina Hinola, chief executive officer of LCPI
* Roy Hilario, president of Fusion Capital Corp.
* Bruce Rafanan
* Virgilio Odejar

‘Criminal schemes’

The first case filed by the BSP against Celso Delos Angeles is based on a joint affidavit of lawyers Joven Huyo-a and Emerson Roxas of the BSP’s Office of Special Investigation. It showed an alleged intricate “criminal scheme” where Delos Angeles and his accomplices “acted as a syndicate.”

The case only looks into the schemes employed in Rural Bank of Darbci, one of the 13 rural banks under the Legacy Group.

Aside from documentary evidence, the allegations were supported by a total of 84 bank officers and individuals who signed affidavits narrating personal knowledge on the Legacy Group’s scheme.

The Rural Bank of Darbci allegedly amassed huge deposits through the “double your money in five/three years” scheme and then siphoned the funds using two other schemes—the “motorcycle loan program” and the “investment loan program.”

As of September 20, the BSP examiners found out that the bank’s actual cash position was less than P1 million when its total deposit liabilities was P830 million. It later declared a bank holiday.

More cases

More cases against Delos Angeles are expected to be filed as the law firm is still looking into the other banks under the Legacy Group.

From December 2008 to January 2009, the 13 rural banks under the Legacy Group voluntarily ceased operations and were placed by the BSP under receivership.

These banks have an estimated deposit liability of P24 billion. Of that, only P14 billion would be returned to some depositors whose bank accounts are worth P250,000 and below.

Taxpayers would have to shoulder that P14 billion price tag, which the state-funded Philippine Deposit Insurance Corporation is compelled by law to settle.

Galacio said his law firm will also handle all the other BSP cases involving the Legacy Group.