State-owned Philippine Deposit Insurance Corp. (PDIC) has filed a criminal complaint against the former officers of the closed Rural Bank of Subangdaku Inc. (RBSI) in Cebu for the alleged creation of P2.6-billion fictitious loans.
As the statutory receiver of the closed rural bank, the PDIC filed the criminal complaint with the Department of Justice (DOJ) on January 13 against the former president and the former loans manager of the closed bank for the “creation of fictitious loans and for conducting business in an unsafe and unsound manner.”
The RBSI was placed under PDIC receivership by the Monetary Board in 2009.
In its complaint, PDIC alleged that respondents Paz Radaza, the former president and member of the RBSI cre- dit committee, and Julius Eullaran, bankwide loans manager, conspired and caused the creation of 6,051 fictitious loans amounting to almost P2.6 billion from 2004 to 2008 that comprised about 97 percent of all loans supposedly released by the RSBI Head Office during that period.
The complaint further stated that the respondents forged official receipts and made it appear that payments were being made to the bank, when in fact, no payment was received.
“These supposed payments were used to provide the purported source of the fictitious loan proceeds,” the PDIC stated.
The insurer also noted that based on the sworn affidavit of the bank’s former loan officer, respondents Eullaran and Radaza ordered their subordinates to create fictitious loans, with “no questions asked,” based on the list that respondent Eullaran provided, which contained information to be used in creating the fictitious loans.
“This claim was supported by the findings of the expert forensic accounting team from Alba Romeo & Co. that PDIC engaged to assist in the investigation,” it added.
Results of the forensic investigation also showed that 5,470 of the 6,051 fictitious loans did not contain the required credit information.