CA clears 88 in P98-M bank deposit scam

The Court of Appeals ( CA) has cleared 88 individuals earlier tagged by the Philippine Deposit Insurance Corp. (PDIC) in a P97.73- million scheme involving falsified bank deposit claims.

In a 16- page decision released last week, the CA’s 16th Division reversed the review resolution of the Department of Justice (DOJ) issued last year by acting secretary Emmanuel Caparas that found probable cause in the estafa and money laundering charges filed by PDIC against the insurance claimants.

The CA granted the petition filed by spouses Manu and Champa Gidwani, who were among those indicted by the DOJ before the regional trial court, and reinstated the findings of lack of probable cause by DOJ investigators.

The case stemmed from the closure in December 2008 by the Monetary Board of 12 banks affiliated with the Legacy scam for allegedly engaging in fraudulent banking schemes.

The PDIC spent some P12 billion to pay deposit insurance claims made by former depositors of the Legacy banks, which is touted as the largest financial scam in the banking system.

The PDIC accused the Gidwani couple and 86 others of falsely claiming to be former depositors of the defunct Legacy banks just so they could receive insurance payments.

It noted that the scheme, referred to as deposit insurance fraud, involved the respondents 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 deposit accounts with the Legacy banks.

The Gidwanis and the 86 other respondents, according to the PDIC, had maintained 471 accounts in various Legacy banks amounting to P118.19 million.

The accounts were simultaneously opened and funded through checks issued by only one individual or through fund transfers from a single account, the PDIC said.

The CA held that the PDIC failed to prove that the Gidwanis own all of the questionable bank accounts or financed their opening.