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Thursday, March 28, 2024

Court convicts two Legacy bank execs

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Two former officers of a bank connected with the Legacy Group of the late Celso de los Angeles were convicted by the Metropolitan Trial Court of Manila branch 22 for submitting false financial reports to the Bangko Sentral ng Pilipinas.

The Bangko Sentral said in a statement Tuesday Zacarias Carticiano and Jose Girlo Caramat, former president and compliance officer, respectively, of the Rural Bank of San Jose (Batangas) Inc., were convicted under the New Central Bank Act for submitting two financial reports that falsely represented an enhanced financial position of the bank.

The Bangko Sentral said it conducted an on-site examination of RBSJI from Nov. 13, 2008 to Dec. 4, 2008, after which RBSJI declared a bank holiday. During the examination, the bank submitted to the Bangko Sentral examiners two documents—its consolidated statement of condition and its statement of condition, bearing the signature of Caramat for and in behalf of Carticiano.

“RBSJI stated in these documents that its real and other properties acquired [ROPA] as of September 2008 amounted to P429,293,722.25, as opposed to its previous report that in August 2008 its ROPA was P7,293,722. It was this sudden and massive increase in the balance of the ROPA amounting to P413,000,000.00 in a span of one month only that prompted the BSP to investigate,” the bank regulator said.

The Bangko Sentral said investigation showed that Carticiano, in behalf of the bank, had acquired five parcels of real estate properties for P3,790,080, as shown by a deed of absolute sale dated Aug. 28, 2008, but that it had recorded these in its book as P413,000,000.

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It said the value was based on an appraisal of the properties done by Valueworld Appraisers Inc. An engineer from the BSP Asset Management Department, however, found the  market value of the same properties to be P3,750,864.00.

“It was Carticiano who allowed the use of Valueworld’s valuation and the consequent overstating of the ROPA when he executed a Deed of Assignment dated 11 September 2008 covering the same five (5) parcels of real properties for P413,000,000.00, and it was Caramat who prepared the CSOC and SOC, which he signed for and in behalf of the former and submitted to the BSP,” the Bangko Sentral said.

Carticiano and Caramat were each sentenced to pay a fine of P100,000.

“The convictions of Carticiano and Caramat are the first convictions obtained thus far in a wave of cases filed in 2009 by the BSP against multiple banks connected with the Legacy Group of the late Celso de los Angeles. Officers of these Legacy banks were charged with using falsified documents and fictitious loans to siphon money from the banks,” the Bangko Sentral said.

De los Angeles founded the Legacy Group, which operated rural banks, a pre-need firm and financing companies that offered high interest rates to attract clients, most of them were small merchants, wage earners, tricycle drivers and pensioners.

When the network collapsed, it reportedly owed as much as P30 billion to some 130,000 depositors.

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