Thursday, July 30, 2009

Land of the Rising Scam

Celso de los Angeles is just the latest in a Who's Who gallery of Filipino rogues and scoundrels that have fleeced Filipinos of their money and savings. He is not the first but he seems to be the one who has practically perfected the art.

The pyramid scam hogged the headlines in 2002 when investment firms, most of them not even registered with the SEC, swindled more than a million investors of an estimated P100 billion. Companies such as Multitel, MMG Holdings, Tibayan Group of Companies, Glasgow and Maria Theresa Santos Trading duped people into investing P10,000-P300,000 with promised 10-15 percent annual returns.

Multitel, owned and operated by the pyramid queen Rosario Baladjay,used counselors who recruited investors. Successful recruitments meant a 1 to 20 percent commission for the counselors, who also brought in subcounselors. Celso used marketing agents who inveigled preneed planholders to convert their plans into DYM certificates and convinced savers to deposit in the Legacy rural banks. While Baladjay's scheme ran for three years (1999 to 2002), Celso's flourished for a record 11 years (1997 to 2008). But in three years, Baladjay amassed a whopping P20 billion while Celso "only" siphoned off a conservative P14 billion.

In 2008, a racket which spun off from Multitel also stole P2 billion-worth of investments from its victims. Cyrus Yap Hao, who worked with Baladjay in Multitel, introduced his own pyramid scheme through a company called Royal Manchester Five. FrancsSwiss also solicited investments ranging from $1,000-$10,000 with payment done online through the different websites of FrancSwiss, duping investors of another $150 million.

Baladjay was convicted in 2003 based on numerous estafa cases, and so was Maria Theresa Santos. Both are believed to be incarcerated in the Correction Institute for Women. Eric Mateo of Mateo Trading was arrested in early 2008 while Hao left the country in March 2008 but he was eventually nabbed by the NBI, but Jesus Tibayan is still at-large. Nobody knows any recents news about Mateo, Hao and Tibayan, but a recent news reports has given us a clue:

MANILA, July 2 — Acting Department of Justice (DOJ) Secretary and concurrent Solicitor General Agnes Devanadera ordered on Thursday DOJ prosecutors to fast-track the investigation of all financial and business scam cases awaiting resolution.
Correlating the unresolved cases in the DOJ and other prosecution offices to the recent conviction of former NASDAQ chairman Bernard Madoff, "this will generate the feeling of impatience to the general public and the complainants of the business and financial cases," Devanadera pointed out.

The Acting DOJ chief ordered Acting Chief State Prosecutor Severino Gana, Jr. to direct Asst. Chief State Prosecutors Miguel Gudio and Leah Armamento and City Prosecutor Emilie delos Santos to speed up the investigation of such cases similar to a Ponzi scheme committed by Madoff.

"Let us show immediate results," Devanadera stressed as she urged DOJ prosecutors for the successful prosecution of the accused. (PNA)

Two million-peso questions: Does Devanedera's memo indicate that the former Secretary of Justice sat on these cases? Any bets that this new directive will cover Celso?

Saturday, July 25, 2009

Schemes to Keep Celso Away from the Courts

Have you read the news report about a DOJ hearing that was moved to August 4 because of the belated swearing-in of a PDIC lawyer? The case was filed by PDIC against Celso in behalf of 10 investors who lost P56 million to Celso's scheme. Although it is not clear to us how and why PDIC is involved in a case which does not concern legitimate bank deposits, it seems that PDIC is doing the right thing since we presume that PDIC will pay the huge court docket fees which have been a deterrent to victims who would like to seek justice against Celso. With this move, PDIC is signalling that it is serious in prosecuting Celso and his cohorts.

Cagayan de Oro (CDO) preneed victims, who have some money left, have filed two cases (with one more on the way as of this writing) of syndicated estafa against Celso, and was the reason why Celso was served two warrants of arrest while in the hospital. Last month, we heard that Cebu victims had planned to file a similar case but could not come up with the costly filing fees. If you remember, there was talk that Senator Mar Roxas would ask the DOJ and the courts to waive filing fees for Legacy victims, but obviously, this did not prosper. Then the DOJ inexplicably came out with a ruling that all Legacy cases, except for CDO, should all be consolidated for filing in Makati courts, even though most victims were located in the Visayas and Mindanao. This deterred a lot of victims who would have to undergo the time-consuming, expensive and long-distance court cases that would be heard in the Makati courts. Thank God that the CDO cases were filed before the DOJ ruling came out; otherwise, up to this date, not a single warrant of arrest would have been served to Celso.

But what happened to all those ballyhooed cases that BSP and PDIC filed much earlier? Nothing, so far. It is ironic that cases filed by private individuals shelling out the last of their private funds, resulted in immediate action by the courts, while cases filed in Makati courts by government agencies (the sames ones who as regulators allowed and tolerated Celso's fraudulent schemes) have not even gone beyond a first hearing at the DOJ. Do you know that the Aug. 4 would be closed-door, with the media kept out of the proceedings? Seems to prove the theory that there are powerful individuals behind Celso: who would do anything to keep Celso's mouth shut until death (if he really has cancer) causes him to bring those names with him to the grave. There a lot of people who would like to see Celso buried together with those nameless ones, who have for too long plundered the government coffers, and now the savings of the poor.

Friday, July 24, 2009

Postponing Delaying Insurance Corp

A claimant reported that in a July 21 afternoon visit to the PDIC office, one of so many unproductive follow-ups on the status of his claims, he saw an old woman creating a drama scene: berating and shouting at the staff. She could not understand why PDIC was insisting that her children, who were in Singapore, and her friends, had to personally appear to file claims. The old woman just wanted that she alone (not even her husband who she claimed was sick) could do the filing for all of them.

The informant could not help but notice that the old woman was clutching a bunch of yellow claim slips, leading the former to think that "she might have invited the entire barangay to deposit (sic) in Legacy banks" and doubt "whether those were real persons or just fictitious names as the number of claims filed by her is questionably humongous."

If an ordinary depositor would have cause to think that this woman is really the owner of most of those deposits, then imagine what the PDIC would conclude, especially since their charter specifically provides that in determining the amount due to a depositor, "there shall be added together all deposits in the bank
maintained in the same right and capacity for his benefit either in his own name or in the name of others." It is a foregone conclusion that the old woman will not get her way and that even if she presented all her friends, there is no guarantee that PDIC will pay all the claims. Remember the PDIC lawyer? He said that they have ways and means to go beyond what the personal info sheets indicate for the deposits in order to find out who really is the beneficial owner of questionable accounts.

It is understandable that cases of using dummies and preneed check conversions are delaying the validation of accounts, and therefore holding up (some people say grinding down) the payout of claims. However, it has been almost eight months since the closure of banks and checks are just trickling in. It is almost inconceivable that a claimant is paid for one account, while other accounts (in the same bank) opened at the same time as that paid account is still being verified- same situation for his family members who opened accounts together with the paid claimant. There have been more instances where PDIC has required affidavits of one sort or another, than cases of actual payments made. We personally know of one family who received one check for one account but was asked to submit affidavits for 15 accounts, all in the same bank.

Claimants, even those who have been partially paid, have come to the realization that even though PDIC wants to pay valid depositors, it does not have enough liquid funds. It relies on its monthly assessment collections, which average about P600 million a month, net of taxes, to fund its issued checks. So if its payables for all the 13 Legacy banks is about P10 billion (not including the claims for the closed 13 non-Legacy banks), then expect that payouts will drag out for the next 14 months. But wait! Isn't PDIC mandated by its charter to pay within 6 months from the date of filing? It has to, and therefore expect PDIC to soon issue bonds to raise money or finally force PBCom to sell it shares in order to get back its P7.64 billion investment in the bank. If it cannot raise funds soon enough, then the acronym PDIC will come to mean: Postponing Delaying Insurance Corp.

Saturday, July 18, 2009

Divine Retribution

The doctors say that Celso requires a total of 27 radiotherapy sessions, and therefore would need more than 20 days stay in St. Luke's hospital (this hospital has gained a reputation as the sanctuary of fugitives and scammers and should be called St. Locos). Celso is allegedly suffering from diabetes and hypertension, diseases that in combination with a cancer would spell a short short life for the patient. Of course, the question is: Does he really have cancer? I mean cancer of the throat because we already know that he has cancer of morals, aside from having the diseases of greed and lust.

In this age of photoshop, it is very easy to be skeptical of pictures. All those pics of Celso with tubes in his trachea and stomach are met with doubt, notwithstanding the pronouncements of his doctors and the PNP physician. However, we believe that Celso may actually have cancer, considering that we have noted that malefactors and scoundrels have been felled by dread diseases. Recall that the late SEC commissioner Jesus Martinez, accused of graft and protecting Celso, died of cancer. Before that, FG had to be operated for aortic aneurysm. And just recently, PGMA reportedly had to undergo an operation to remove cysts from her breast/s. Malacanang had taken great pains to announce that the tumors were benign, but if we are to be consistent with our theory... What about JocJoc? Well, if our theory of divine retribution will hold true to form, it is just a matter of time.

Thursday, July 16, 2009

Celso is a Negotiable Criminal

Legacy bank-issued CTDs are definitely non-negotiable instruments but Celso's detention in a prison cell is obviously negotiable. All that Celso had to do was get himself admitted in St. Luke's hospital (which would be easy enough), get diagnosed as one with a dread disease, and then undergo medical treatment. And that is what Celso did: if we are to believe news reports, he was a patient in St. Luke's, was undergoing chemotherapy, and then inexplicably obtained medical clearance from his doctor to leave the hospital.

What was so important for Celso to leave the confines of the hospital and go to Sto. Domingo to assume his duties as mayor? Would someone undergoing treatment for cancer risk the long travel from metro manila to Sto. Domingo, a town in Bicol to report to the municipal office? I don't think so... Celso had to go to that town to do something. Hide more documents? Retrieve cash from his safe to pay off his protectors? Well, it must have been important, to risk his health and expose him to arrest. And if we believe again the news reports, Celso collapsed while in town, and had to be returned to St. Luke's.

Pictures show Celso with tubes in his throat and stomach, to underpin his lawyer's claim that though a warrant of arrest has been served to him, he cannot be moved from the hospital. Then a PNP doctor is brought in, and confirms that Celso has to stay put in the hospital to undergo 20 sessions of radiotherapy. Celso must have brought back cash from his house in Sto. Domingo and dispensed them freely, and obviously, successfully. Of course, Celso is not used to giving out cash: he was used to issuing CTDs that were not actually funded. Now that his banks are closed, and his credibility shot, he has to pay cash to get his way.

However, thinking about it, we would gladly see Celso in the hospital getting all the treatments to get him healthy, fit enough to serve his sentence in jail. Death would be too easy for this criminal, but the question is: would our (flawed) criminal justice system dish out the long prison sentence that Celso deserves? Rethinking, I guess death is a surer sentence.

Sunday, July 12, 2009

Legacy CTDs are non- negotiable instruments. Period.

We were able to have an hour's chat with a PDIC lawyer and relayed to him a recent case of denial of an acquaintance of a DEADBOL member. The woman, a San Miguel retiree, had deposited in Dynamic bank (the one legacy bank where PDIC had admitted that its verification process had stalled due to the magnitude of missing documents). She had recently received a letter from PDIC stating that one of her claims for a 250k time deposit was denied because it was not listed in the bank's master list. The PDIC denial letter referenced Sec. 4 (g) which provided that "no owner/holder of any negotiable certificate of deposit shall be recognized as a depositor entitled to the rights provided in this Act unless his name is registered as owner/holder thereof in the books of the issuing bank. (As amended by R.A. 9302, 12 August 2004)."

We told him in no uncertain terms that certificates of time deposits issued by the defunct Legacy banks were not negotiable instruments. We provided him the legal references including excerpts from Supreme Court cases and specifically cited a passage by the esteemed Professor of Law, Atty Timoteo Aquino, who in his book stated that ‘The rule has always been that the instrument in order to be considered negotiable must contain the so called “words of negotiability” – i.e., must be payable to “order” or “bearer.” These words serve as an expression of consent that the instrument may be transferred by negotiation. This consent is indispensable since the maker assumes greater risk under a negotiable instrument than under a non-negotiable one.’ Section 1 Act No. 2031, otherwise known as the Negotiable Instruments Law, enumerates the requisites for an instrument to become negotiable and it is clearly spelled out in requirement d) Must be payable to order or to bearer.

In the absence of the actual denial letter, the PDIC lawyer surmised that it may have been a promissory note or another paper, but not a CTD. And that PDIC uses different templates for different cases. However, the deadbol member clarified the matter with the claimant, and affirmed that the denial letter was in a general format: it stated CTD and PDIC (office of Atty Elaine Deticio) and the CTD number was handwritten on the blank portion in the letter.

If true, then PDIC will surely lose any legal case that based its denial on the negotiability of a Legacy bank CTD. However, the good news is that a denied claimant can seek reconsideration with the PDIC claims settlement office, and that PDIC is willing to consider other evidences of funds inflow, provided by the claimant. It is best to remind everybody concerned that in 2000, there was a precedent wherein PDIC accepted and paid out CTD claims of deposits made to the Rural Bank of San Miguel, even those without supporting bank records. If a bank depositor is sure that his or her money was actually deposited in the banks, then he or she is practically in almost-solid ground. We say almost, because this is the Philippines, and one can never be sure.

Mayor Celso is back.

Have you heard that Celso de los Angeles has reported back for duty as mayor of his small town in Bicol? Yes, just last week, radio broadcasters were matter-of-factly relaying this development in the life of Philippines' counterpart of Madoff. But unlike the latter who in less than six months of his indictment was sentenced to 150 years of life imprisonment, Celso has not even appeared in court for a first hearing. Sure, BSP and PDIC have announced five or six cases of syndicated estafa and other violations against Celso but none have prospered beyond the initial filings.

Even ex-billionaire Stanford has already been indicted, less than a month after his arrest. If one recalls, Stanford disappeared and was in hiding for months before his arrest. Here, all Celso had to do was show up for a few moro-moro senate and congressional hearings, and then admit himself in St. Lukes hospital for a supposed biopsy and subsequent diagnosis of throat cancer. Why hide when one can lie in comfort in a 5-star room. The hospital is known as a refuge of criminals who want to escape the public eye and warrants of arrest, and everybody expected Celso to follow suit, and indeed he did. We talked with a top PDIC lawyer who has made it his cause to prosecute Celso, and he said that he could only say with 70% certainty that Celso actually has cancer. Either way, Celso got his wish and the villain has crept back out of the hole, and is worming himself back to politics. I would not be surprised if he continues on with his plan to run for governor of the province in May, 2010.

Justice in this country practically does not exist. How can it? We heard the admission of Sec. of Justice, Agnes Devenadera,that the DOJ has pending cases of over 11,000. And to become part of that backlog, one has to spend a fortune to file a case. Pre-need victims of Cebu have been unable to file a P190 million syndicated estafa suit against Celso because of the petitioners' failure to post 1.9 million pesos of filing fees, and because of this, Celso's lawyer has asked the court to dismiss the case. What a travesty of justice!

In the Philippines, the wheels of the gods grind exceeding slow, and that is all what happens, nothing after that.