Tuesday 25 September, 2018
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SC allows prosecution of bank officials in P97M fake insurance claims

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The Supreme Court (SC) on Tuesday gave its go-ahead for the immediate prosecution of Legacy Banks owners, some 86 depositors, and a bank branch manager who were accused of duping the government through fraudulent deposit insurance claims worth P97.73 million.

In an 18-page decision penned by Associate Justice Presbitero Velasco Jr., the SC ordered the reinstatement of the June 3, 2016 resolution by then Justice secretary Emmanuel Caparas which found probable cause to charge spouses Manu and Champa Gidwani, Rizal Commercial Banking Corporation (RCBC) Bacolod Main branch manager Andrew A. Jereza and 86 others for the crimes of estafa through falsification of documents, perjury, and money laundering.

The SC set aside the January 31, 2017 decision of the Court of Appeals (CA) reversing Caparas’ resolution and ordered the dismissal of the complaint.

The SC ruled that CA erred in holding that Caparas gravely abused his discretion in reversing an earlier resolution issued by then Justice Undersecretary Jose Justiniano which upheld the DOJ Task Force’s recommendation to dismiss the complaint against the respondents.

The case started when the Bangko Sentral ng Pilipinas (BSP) ordered the closure of 13 rural banks controlled by the Legacy Group of Companies (Legacy Banks) and placed them under receivership of PDIC.

The Gidwanis together with 86 other individuals represented themselves
to be owners of 471 deposit accounts with Legacy Banks and filed
claims with PDIC.

The claims were processed and granted, resulting in the issuance of 683 Landbank of the Philippines (LandBank) checks worth P98.73 million in favor of the 86 individuals.

Despite that the checks issued were crossed-checks “payable to the payee” account only, the said individuals did not deposit the crossed checks in their respective bank accounts.

Instead, the checks were credited to a single account with RCBC owned by the Gidwanis, allegedly in connivance with Jereza.

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