CA revives P4.5-B estafa case vs Urban Bank execs

The Court of Appeals has resurrected the P4.5-billion estafa case against the officers of the defunct Urban Bank led by its president, the late Teodoro Borlongan. In a 16-page decision penned by Associate Justice Remedios Salazar-Fernando, the CA’s Seventh Division ordered the Makati Regional Trial Court Branch 56 to reinstate the criminal complaints against respondents and to proceed with the trial of the case filed by the Department of Justice. The Makati court through Judge Reynaldo Laigo earlier issued a decision dated June 20, 2006 ordering the dismissal of the complaints due to the failure of the DOJ to charge an offense against them. The CA held that the sufficiency of the criminal complaints filed against the respondents had already been settled by the finding of probable cause by the DOJ panel of prosecutors, the Secretary of Justice and the other Makati court judges who initially handled the cases. “Private respondents who are officers of UBI and UII should not be allowed to go scot-free without shedding light to anomalous transactions involving billions of pesos which led to the closure of UBI and even the alleged suicide of accused Borlongan. The incidents impaired the public trust and confidence on the integrity and efficiency of the banking system," the CA said. Aside from Borlongan, named respondents in the case were Arsenio Bartolome, Corazon Bejasa, Nida Santos, Milagros Santiago, Rowena Punsalan, Mark Ching, Chulla Formanes, Loida Payonga and Amalia Ordas, all officers of Urban Bank and its affiliate company Urban Corporation Investments, Inc. (UII). They allegedly made illegal disbursements of funds amounting to P4.5 billion, leading to the closure of the bank in 2000. Aside from estafa, they were also held liable for violation of banking laws. The CA pointed out that prior to the dismissal of the cases, Judge Zeus Abrogar of Makati RTC Branch 150 issued an order dated February 8, 2001 in criminal case no. 00-2217 finding probable cause against all the respondents except Bartolome and Bejasa for the crime of estafa. On the other hand, in criminal case No. 01-406 pending before Branch 145, presiding Judge Cesar Santamaria also found probable cause and issued arrest warrants against all the respondents including Bartolome and Bejasa. When the criminal cases No. 00-2217 and 01-406 were consolidated with criminal case No. 01-407 pending before Branch 56 with Justice Nemesio Felix presiding, he also found probable cause and also set the arraignment of the respondents. On December 19, 2004, Judge Felix retired from the bench, thus, the case was transferred to pairing Judge Reinato Quilala, then later to Laigo. “These judges have studied the case thoroughly and they were one in declaring that there exists probable cause," the CA Said. “When all of them have the same finding that probable cause exists, one could only surmise that there is indeed a prima facie case against the private respondents, that there is sufficient ground to engender a well founded belief that the crime had been committed and the private respondents are probably guilty thereof and should be held for trial," the CA added. The appellate court further ruled that as officers of UBI and UII, the respondents were the ones who signed the documents involved in the dubious transactions. “For as long as the information is valid on its face, and there is no showing of manifest error or grave abuse of discretion on the part of the public prosecutors, the State should be afforded the opportunity to ventilate this case, even if only to restore the public’s trust and confidence on our banking system. This can only be done in a full-blown trial on the merits where evidentiary matters can be presented and considered," the CA said. Court records showed that in a special meeting of the Bangko Sentral ng Pilipinas-Monetary Board on April 26, 2000, it passed Resolution No. 634 ordering the closure of UBI and placing it under receivership of PDIC. The MB Resolution was made based on UBI’s declaration of “bank holiday" or temporary suspension of its operations on April 25, 2000 in order to find solutions to its momentary illiquidity. The BSP and the Philippine Deposit Insurance Corporation then filed a complaint with the DOJ for four counts of estafa under Article 315 of the Revised Penal Code. The complaints alleged that the UBI officers conspired to misappropriate the funds of UBI through the purchase of doubtful and substandard receivables from UII, to the prejudice of UBI, its stockholders, creditors and depositors. The purchases, according to the complaints, were done at the time when UBI was suffering from serious liquidity problems. These fraudulent transactions led to the closure of UBI. In seeking the dismissal of the cases against them, the respondents claimed that the complaints failed to allege that they misappropriated the UBI funds for their own benefit. GMANews.TV