Wake Up, Philippines!

Anti-Money Laundering Council probing Legacy owner

Posted in AMLC, Money Laundering, Pre-need Plans by Erineus on February 25, 2009

MANILA, Philippines – The Anti-Money Laundering Council (AMLC) is investigating Celso de los Angeles, owner of the failed Legacy group of 12 rural banks and three pre-need companies, for alleged money laundering.

AMLC executive director Vicente Aquino told the House committee on banks yesterday that the council initiated the investigation upon request of the Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission (SEC).

He said the inquiry is based on two “predicate crimes” covered by the Anti-Money Laundering Law that the BSP and SEC claim De los Angeles and many of his company officers and personnel have committed.

“These are the crimes of violation of the Securities Regulation Code and estafa,” he said.

During the hearing, upon prodding by Albay Rep. Edcel Lagman, BSP officials promised to file a case for syndicated estafa against De los Angeles and his officers.

“The punishment for syndicated estafa is life imprisonment. And if the evidence is strong, bail is not available to the accused,” Lagman said.

He reminded BSP officials led by Gov. Amado Tetangco of the statement made by Deputy Gov. Nestor Espenilla that the Legacy group is a “syndicated organization” led by De los Angeles, which exploited “human nature and weak links” in the banking system.

“Mr. Espenilla made that statement two weeks ago. And yet, the BSP has not been able to file charges against the mastermind,” he said.

Tetangco said the statement, which he approved, “was based on our examination findings of the Legacy banks.”

He said BSP lawyers are now finalizing the estafa charges against De los Angeles and many of his Legacy officers.

Lagman also expressed dismay over the fact that nearly two months after taking over the shuttered Legacy banks, the Philippine Deposit Insurance Corp. (PDIC) does not know how much money the banks held when the BSP closed them in December.

PDIC president Jose Nograles informed the committee that they are still conducting an inventory of the deposits and assets of the Legacy banks.

“We are more interested in the cash because according to BSP’s findings, deposits were siphoned off to other Legacy companies through fake and questionable loans,” he said.

Nograles promised to give Lagman the information he needs in the next hearing on Monday.

Lagman warned Nograles not to be “hasty” in paying Legacy depositors lest the PDIC be perceived as covering up for De los Angeles.

The PDIC boss has estimated that his agency would pay Legacy depositors as much as P14 billion in insured deposits.

Responding to questions from Makati Rep. Teodoro Locsin Jr., De los Angeles denied BSP’s findings that deposits of his banks were transferred to other Legacy companies, including Legacy Motors, through fictitious loans.

He said the P3.7 billion that BSP claims Legacy banks paid to Legacy Motors for questionable motorcycle loans “never left the banks.”

“I have copies of BSP examination reports from 2004 to 2007. They never mentioned any fictitious loan,” he said.

At one point during the hearing, tempers flared when Camarines Sur Rep. Luis Villafuerte grilled Espenilla on his family’s shareholdings in the Rural Bank of San Jacinto in Masbate.

Opposition Rep. Rufus Rodriguez protested Villafuerte’s interrogation of Espenilla, saying it was not the subject of the inquiry.

“The focus of our investigation here is the failure of the Legacy banks and pre-need companies. I am one of the authors of seven resolutions calling for this inquiry,” Rodriguez said in a raised voice. – Jess Diaz

Updated February 25, 2009 12:00 AM