State-run Philippine Deposit Insurance Corporation (PDIC) has filed a syndicated estafa with the Department of Justice (DOJ) against former officials of the closed Banco Filipino Savings and Mortgage Bank.
Accused of committing syndicated estafa in violation of Presidential Decree 1689 (1980) were: Albert Aguirre (former vice chairman), Teodoro Arcenas (former chairman and president), and 31 other former officers, employees and consultants of Banco Filipino.
In its complaint-affidavit, PDIC alleged that the respondents abused the confidence as bank directors/officers and conspired and misappropriated some P669.6 million from the money members of the public had deposited at Banco Filipino to pay for their travels abroad from January 2000 to July 2003.
“The syndicated estafa led to bank losses. Even after the bank was ordered closed on March 17, 2011, the respondents failed to return the amount,” PDIC alleged in the complaint-affidavit.
PDIC filed the complaint on July 5. It now waits a date for hearing by the DOJ Task Force on Financial Fraud.
Banco Filipino, which began operation in 1964, is a 62-unit bank. It was first ordered shut in January 1985, but the Supreme Court allowed it to reopen in 1991. And it resumed operations under the comptrollership of the Bangko Sentral ng Pilipinas (BSP) as decreed by the Supreme Court. In January 2000, considering its good financial health the bank was freed from BSP comptrollership.
PDIC alleged that based on investigation, the syndicated estafa was committed after BSP’s comptrollership was lifted. And, as the bank suffered a net loss of P1.778 billion and a net asset decline of almost 50 percent in the three-years since 2000, Banco Filipino was placed again under BSP comptrollership.
On March 17, 2011, when the Monetary Board ordered the bank’s closure again, PDIC discovered several anomalous expenditures incurred by the bank starting 2000 until July 2003 on account of travel expenses of the bank’s directors, officers, consultants, and employees in the total amount of P669.6 million. Of this, P621.2 million was not liquidated.
In addition, P48.4 million was spent for the activities of Los Tamaraos Polo and Equestrian Center Inc., an affiliate company of respondent Aguirre, and sponsorship of a tournament in London, England as well as personal expenses such as clothing, toiletries, perfume and accessories, groceries, freight services, vehicle repair and maintenance, license registration, drugstore purchases, and medical fees.
Investigation of the expenses discovered they were not at all related to the business of Banco Filipino.
The respondents, however, claimed, their travel expenses were incurred to prepare for Banco Filipino’s operations as a universal bank, conduct image building activities, expand contacts, and explore unspecified business opportunities.
The latest closure of Banco Filipino resulted in estimated losses of some P669.6 million to the bank.
PDIC had earlier filed criminal complaints against former directors, officers and employees of Banco Filipino for conducting business in an unsafe and unsound manner, in violation of the PDIC Charter.
“The filing of charges is in support of PDIC’s efforts to bring to justice parties who engage in acts that will put depositors and the Deposit Insurance Fund (DIF) at risk,” it stated.
The PDIC is mandated to generate, preserve, maintain faith and confidence in the country’s banking system, and protect it from illegal schemes and machinations. It said it would continue to pursue legal actions against bank officials and personnel who engage in unscrupulous banking practices that pose grave threats to the stability of the country’s banking system.