SC upholds charges vs Legacy Bank execs

The Supreme Court (SC) has given the green light to indict the owners of Legacy Bank and 87 others in connection with the allegedly fraudulent deposit insurance claims that duped the government of P97.73 million.

In an 18-page decision promulgated in January, the SC reversed and set aside a 2017 ruling of the Court of Appeals (CA) that junked the charges of estafa through falsification of documents, perjury and money laundering against Legacy Bank owners, spouses Manu and Champa Gidwani, a bank manager and 86 depositors.

The SC reinstated the 2016 resolution of the Department of Justice (DOJ) that found probable cause in the charges filed by the Philippine Deposit Insurance Corp. (PDIC) and approved the filing of cases in court.

The SC said the CA erred in reversing the findings of the DOJ.

It said the appellate court dismissed the complaint prematurely on the basis of failure to prove that Manu was the owner of all the accounts subject of the complaint, instead of ordering a full-blown trial on the case. “Whether or not there indeed existed an agreement between respondent Manu and the individual depositors is a matter best left ventilated during trial proper, where evidence can be presented and appreciated fully. Suffice it to state for now that the Court herein finds probable cause to charge respondent for estafa and money laundering,” the ruling, penned by Associate Justice Presbitero Velasco Jr., said.

Associate Justices Marvic Leonen, Samuel Martires and Alexander Gesmundo concurred with the ruling.

The SC cited the authority of the secretary of justice (SOJ) to decide on the petitions for review filed before his office by assessment of documents and pleadings submitted to him.

“The secretary of justice is not bound by the rulings of his predecessors because there is yet to be a final resolution of the issue. The matter is still pending before his office after all. To hold otherwise would render the filing of the motion a futile exercise, and the recourse, pointless,” the SC said. “It was therefore plain error on the part of the CA to have ruled that SOJ (Emmanuel) Caparas virtually had no option but to affirm the findings of the DOJ Task Force and (Justice Undersecretary Jose) Justiniano as to the alleged absence of probable cause to charge respondent,” it added.

Records showed the PDIC filed the criminal charges after the monetary board of the Bangko Sentral ng Pilipinas ordered the closure of 13 rural banks controlled by the Legacy Bank and placed the firm under receivership of PDIC. The Gidwanis together with 86 other individuals represented themselves as owners of 471 deposit accounts with Legacy Banks and filed claims with the PDIC. The claims were processed and granted, resulting in the issuance of 683 checks by the Landbank of the Philippines amounting to P98.73 million in favor of the 86 individuals. Despite the checks’ issuance as “crossed-checks payable to the payee” account only, the respondents did not deposit them in their respective bank accounts. Instead, the checks were credited to a single account with the RCBC-Bacolod main branch owned by the Gidwanis, allegedly in connivance with bank manager Andrew Jereza. The PDIC discovered the anomaly when the checks were cleared and returned to it.