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Ex-Legacy execs: Celso active in schemes

By Butch Fernandez & Fernan Marasigan, Business Mirror | 03/03/2009 8:04 AM

 

SENATE probers confirmed on Monday the direct role of businessman Celso de los Angeles in designing the fraudulent investment schemes that lured thousands of investors to place billions of pesos of their savings in the now-bankrupt Legacy Group.

Sen. Mar Roxas II, chairman of the trade committee spearheading the inquiry, cited the testimony of a former Legacy Group marketing manager who narrated how de los Angeles “deliberately engineered his companies’ double-your-money programs to defraud investors of their hard-earned savings.”

“We have heard testimony [of former Legacy Plans vice president for marketing Myrna Axalan] that it was de los Angeles himself who cooked up the scheming programs, that deliberately planned to fool his investors, that he deliberately planned to steal the savings of parents who bought his preneed plans and the depositors who placed their monies in his banks,” Roxas said.

Roxas also referred to separate testimonies by other former officers of Legacy’s various companies, including Rural Bank of Bais Inc. president and chairman Paul Stephen Montenegro; Rural Bank of DARBCI Inc. member of the board Cynthia Belarma; and Bank of East Asia acting chairman Rolando Labrador.


Montenegro of the closed Rural Bank of Bais Inc.: dubious practices bared. NONIE REYES

“De los Angeles’s promos were so attractive that anyone would really be lured into investing their monies [in] Legacy. But all these turned out to be nothing. I pity the thousands of parents and depositors who were fooled by de los Angeles. It is important that we help them get their savings back,” the senator said.

Axalan, in her sworn affidavit submitted to Roxas’s committee, testified that
Legacy’s double- your-money schemes were “personally designed and created” by de los Angeles himself.

She admitted being lured into investing her own money into Legacy because of the promise of high returns for her investment. But, she complained that she eventually found out that these were “just mere devious ploys to defraud investors, including myself, and plan holders of our hard-earned money and savings, much to our great damage and prejudice.”

Roxas noted that Montenegro supported Axalan’s testimony in recalling one instance when his rural bank’s Cebu branch was supposedly directed by Legacy Manila to issue certificates of time deposits to an unspecified number of preneed plan holders. “But while there were entries of deposits, there was no money that came into the bank. This was for a mere three-day audit but this already involved P50 million.”  

Montenegro testified that de los Angeles also placed his own minions to oversee RBBI-Cebu’s transactions, explaining that “the three bank branches in Negros Oriental only had legitimate transactions but the one in Cebu, that was the hao-shiao (fake).”

At the same time, Labrador and Belarma confirmed their respective banks also got instructions to issue certificates of time deposits to depositors, whose names were allegedly dictated by Legacy Manila or Davao, but no monies were ever deposited to their companies. Belarma said Rural Bank of DARBCI’s deposit liabilities have ballooned close to P1 billion “but we have no actual deposits.”

“With these testimonies that we have just heard, it is very clear now that this was a scam. De Los Angeles has to be held liable for stealing the savings of his victims,” Roxas told reporters after the hearing, adding that “with the noose tightening on de los Angeles, the Securities and Exchange Commission should act fast to stop the businessman from disposing his personal assets or from fleeing the country.”

Roxas warned that the filing of charges against de los Angeles would not likely deter the Legacy owner from selling off his assets, as there is still no court order barring the businessman from disposing of the assets that should be used to settle claims of Legacy investors.

An earlier story by BusinessMirror’s Bicol correspondents said luxury cars and hundreds of motorcycles that used to be seen in the grounds of de los Angeles’s sprawling mansion were moved out within just a matter of days last month, after Roxas started publicly encouraging investors of Legacy to picket the properties of delos Angeles and force him to use his assets to return their money.

PDIC guarantee bill OK’d

Meanwhile, the House of Representatives approved on third and final reading on Monday night a bill doubling the Philippine Deposit Insurance Corp. (PDIC) maximum insurance coverage from P250,000 to P500,000.

Voting 172 with no objection and no abstention, the House in plenary session passed House Bill 5911 which seeks to strengthen the financial capability of PDIC by way of government guarantee to share in the payment of the increased maximum deposit-insurance coverage for the first three years.

Lakas Rep. Jaime Lopez of Manila, sponsor of the bill, said it will build up public confidence in the strength of the banking system.

“It is a proactive measure to avert the impact of the worsening global financial crisis now steadily creeping into our region,” said Lopez, following approval of the bill that had been mired in allegations that it was unfairly increasing the taxpayers’ burden simply to allow PDIC to service allegedly dubious claims of depositors. The allegation arose from reports that the de los Angeles banks encouraged depositors to split their funds into several accounts, and that some of the accounts were really contrived ones.

In the same Senate hearing on Monday, PDIC president Jose Nograles confirmed that the PDIC began paying Legacy depositors with claims amounting to P100,000 and below starting February 13 after it verified some 39,000 claimants.

Nograles informed the Roxas committee that PDIC is still in the process of validating Legacy claims amounting to P100,000 and above.

But Roxas raised concerns that PDIC should strictly scrutinize such claims as it is taxpayers’ money that is being disbursed in settling claims of duped Legacy depositors.

Under the sharing scheme approved in the new bill, payment of insured deposits in a closed bank shall be undertaken by the PDIC such that the first P250,000 shall be for the account of PDIC and in excess of P250,000 but not more than P500,000 per insured deposit shall be advanced by the PDIC but for the account of the national government, Lopez said.

In addition, the bill provides for tax subsidy for PDIC, such that all PDIC tax obligations shall be chargeable to the tax expenditure fund for five years from the effectivity date of the law pursuant to Executive Order 93.

“Provided that on the sixth year and thereafter, the PDIC shall be exempt from income tax, final withholding tax and value added tax on assessments [premiums] collected from bank members,” said Lopez.

On January 19, the Senate, via a roll call vote of 13-0, approved the counterpart measure on third and final reading.

Lopez said that despite the recent collapse of 15 rural banks—13 of which belongs to the Legacy group de los Angeles, the country’s banking system remains strong.

“But the current global financial crisis is getting worse and has even turn into recession. If this global economic meltdown deteriorates further and intrudes into our banking system, the stability of our financial system might be shaken. Hence, the need for a preemptive, proactive measure such as the action being taken by Congress,” Lopez said.

March 3, 2009 - Posted by | Philippine Newspapers/Web News | , ,

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