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2 ex-PVAO chiefs, 2 others charged with graft

June 8, 2011 6:04pm
Four former officials of the Philippine Veterans Affairs Office (PVAO), including erstwhile administrators Artemio Arugay and Wilfredo Pabalan, have been slapped with graft charges before the Sandiganbayan.

The charges were filed in connection with the P26.33 million allegedly siphoned off from PVAO funds that were supposedly earmarked for monthly pensions of veterans from January to August 2003.

Pabalan was charged with two counts of graft along with former PVAO chief accountant Leovegildo Santos while Arugay and consultant Enrique T. Sintos were named in a separate graft case.

“The respondents were responsible for the transfer of PVAO funds totaling to P26,327,278.14 from a government accredited bank to a non-accredited bank and for the use of funds for purposes other than the payment of pensions for which the funds were reserved," the Office of the Ombudsman said in its 26-page resolution recommending indictment of all four respondents.

The cases were based on the resolution submitted by graft investigator Cherry Chiara L. Hernando that was approved on September 27, 2010 by then Ombudsman Merceditas Gutierrez. The informations, however, were filed only on Wednesday without any explanation as to the six-month delay.

The Ombudsman based the cases from the findings of the Commission on Audit, which found out that a memorandum of agreement was signed between Pabalan and Centennial Savings Bank (CSB) president Eduardo C. Visperas vesting CSB with accreditation as a “depository entity" of PVAO for old age, death and disability benefits.

“The irregularity of this MOA was evident by the fact that it was not dated, was not notarized, and did not pass through the scrutiny of the COA auditor as required," the Ombudsman resolution noted.

The prosecutors said regardless of these deficiencies, a PVB manager’s check for P9,831,330 was drawn from the PVAO account on January 14, 2003 and deposited two days later into a newly-opened CSB savings account. That same day, Sintos opened a CSB checking account that received a P3.7 million cash transfer a day later from the CSB savings account.

Four days after, the remaining balance of P6,131,330 was broken down into several other new deposit accounts at the CSB Head Office including three that were later on found to be under the names of fictitious persons. However the same accounts were used to “deposit and withdraw huge amounts relating to funds of the PVAO."

Documents obtained by investigators also revealed that on July 3, 2003, PVB Savings Account no. 00201-00681-6 incurred an overdraft that was covered by cash a deposit for P16,872,500 the following day.

Curiously, a check for exactly the same amount was also drawn on the very same day from PVB Checking Account No. 00201-000733-0 which was supposed to hold amounts from returned checks that were not received by recipient veterans or their families.

The said amount was then broken into six PVB checks and deposited into two CSB Accounts at the Head Office (no. 01111001-5) and Murphy branch (no. 01111003-5).

Graft investigators said the system of juggling funds from one account to another to cover-up shortfalls on accounting by taking advantage of the clearing period of checks constitutes “kiting scheme," which is considered fraudulent.

“The act of the PVAO officials in opening an account with CSB, a non-accredited bank, facilitated the cash manipulations and transfer of funds from one bank account to another, without complying with the requirements of the law, rules and regulations on proper documentation of government expenditures," the Ombudsman declared.

In recommending indictment, the Ombudsman dismissed Arugay’s explanation that his act of authorizing the withdrawal of P9.83 million from the PVAO account was not irregular because it was allowed by PVAO-COA and the PVB.

It said both Arugay and Pabalan showed “bad faith and/or gross inexcusable negligence in manipulating the PVAO funds" and for disregarding established procedures for disbursement of government funds.

Santos and Sintos were held liable for acting “evidently in conspiracy" with the two former administrators in using PVAO funds for purposes other than payment of pensions. — KBK, GMA News
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