Leading law firm victim of scam

By PURPLE S. ROMERO, abs-cbnNEWS.com/Newsbreak

Posted at Jan 05 2009 09:40 PM | Updated as of Jan 10 2009 07:50 AM

The biggest law firm in the country allegedly fell victim to a multi-million-peso scam.

Sources in other law firms told abs-cbnNEWS.com/Newsbreak that Sycip Salazar Hernandez Gatmaitan, one of the leading local law firms, was duped by a foreign client into advancing P50 million for a deal that would supposedly bring around P100 million to the firm’s earnings.

The law firm was reportedly promised five percent of its client’s $50 million-claim. However, in order to get their cut, the firm was first asked to advance P50 million.

We learned from our sources that the firm checked its client’s bank account before putting up the advance payment. However, the bank account allegedly disappeared into thin air after the law firm made the P50-million advance.

It is unclear to whom the payment was made and how the deal was explained to Sycip Salazar Hernandez Gatmaitan law office.

We repeatedly tried to get the side of Sycip Salazar Hernandez Gatmaitan by sending them questions through e-mail. We also visited their office Monday and tried to interview one of their partners, but our request was turned down.

We were told that the managing partner, Llewellyn Lanillo, had not yet reported to work.

Our sources told us that Lanillo approved the deal.

Falling down the pyramid

Scams have long robbed Filipinos, from the wealthy to the man on the street, of hard-earned money.

The pyramid scam hogged the headlines in 2002 when investment firms, some of them not even registered with the Securities and Exchange Commission, swindled more than a million investors of an estimated P100 billion.

Companies such as Multinational Telecom Investors Corp. (Multitel), MMG Holdings, Performance Investment Corp. (PIPC), Glasgow and Maria Theresa Santos Trading duped people into investing P10,000-P300,000 with promised 10-15 percent annual returns.

Multitel’s Rosario “Rose” Baladjay, touted as the “Queen of Pyramiding,” confessed in a Senate investigation in 2002 that she deceived people into putting at least P10,000 into her company by presenting a monthly four-percent interest rate and even a double-your-money scheme.

Multitel used counselors who recruited investors. Successful recruitments meant a 1 to 20 percent commission for the counselors, who also brought in subcounselors.

Those who were victimized reportedly include military and police officials.

The ruse was eventually discovered, however, after the number of recruits dwindled and the money stopped rolling. Baladjay was slapped with syndicated charges of estafa at the Makati regional trial court, while the Securities and Exchange Commission filed a cease-and-desist order against Multitel.

Spin off

In 2008, a racket which spun off from Multitel also stole P2 billion-worth of investments from its victims.

Cyrus Yap Hao, who worked with Baladjay in Multitel, introduced his own pyramid scheme through a company called Royal Manchester Five.

Up to P3 million in earnings and a house and a lot package were dangled to members who were made to recruit other victims. Investors were persuaded to put their money in currency trading in European countries.

Hao left the country in March 2008 but he was eventually nabbed by the National Bureau of Investigation.

In cyberspace, too

Such ploys found their way into the Internet in 2007, with FrancsSwiss tagged as one of the most notorious.

FrancsSwiss outlined a 4.5 percent return for 60 days or around 270 percent for investments ranging from $1,000-$10,000. Payment was done online through the different Web sites of FrancsSwiss.

Investors were made to believe that they would earn a 10-percent commission for every recruit.

Those behind the scam reportedly include Jaime Poliquit, Garry Espiritu, Edwin Sendana and Edward Ricalde from the Philippines, American Roger Smith and Singaporeans Raymond Chua and Bensy Fong.

That same year, PIPC lured Filipinos into foreign-exchange trading. PIPC amassed $250 million from investments amounting to as much as P6 million each.

Their cover was blown however when PIPC big man Michael H.K Liew, a Singaporean, closed his bank account in Hong Kong and took off with the investments.

Liew, along with four others, was charged with syndicated estafa in the Quezon City RTC in December 2007.

Text scam

Smaller scams also mushroomed in 2007, one of them particularly targeted overseas Filipino workers.

The Department of Foreign Affairs warned Filipino workers based in the United Arab Emirates about a text scam which used the name of Pres. Gloria Macapagal Arroyo.

The scam reportedly involved text messages which congratulate overseas Filipino workers for winning around $40,000 in a lottery-based scheme. Winners are informed that the cash prize comes from the President’s "Pangkabuhayan 2007 Para sa Kababayang Overseas Filipino Workers" livelihood program.

However, before they could claim their money, the victims are first made to pay a transfer fee worth $400 to Western Union so that they could allegedly easily remit their winnings from the contest organizer, the GMA Charity Foundation.