The Philippine Deposit Insurance Corporation (PDIC) filed with the Department of Justice charges of syndicated estafa against 11 former Directors, officers and employees of the closed LBC Development Bank (LBC Bank) as well as two employees of LBC Development Corporation, an LBC Affiliate that is also a stockholder of LBC Bank, for misappropriating P60 million in LBC Bank’s funds generated from the public by way of deposits.
Respondents were likewise charged with falsification of commercial documents under Article 172 of the Revised Penal Code, and for conducting business in an unsafe and unsound manner in violation of Republic Act 3591, as amended or the PDIC Charter.
LBC Bank is a 20-unit thrift bank ordered closed by the Monetary Board and placed under receivership by the PDIC on September 9, 2011.
The complaint docketed as XVI-INV-15H-00315 charged Ma. Eliza G. Berenguer (nee Ma. Eliza V. Gonzales), former President and Chairman of the Board; former Directors Juan Carlos G. Araneta, Fernando G. Araneta, Santiago G. Araneta, Joaquin G. Garcia and Antonio W. Longa; Ofelia F. Cuevas, former Vice President – Treasury; Apolonia L. Ilio, former VP – Finance; Andrea S. Asegurado, former Head – Finance Accounting Unit; and two unidentified signatories each from LBC Bank and LBC Development Corporation of conniving to defraud the bank an aggregate amount of P60 million through a two-pronged scheme.
The complaint alleged that respondents caused LBC Bank to obtain a P30 million loan from a commercial bank and they did not record it as a liability in LBC Bank’s books. The loan proceeds were allegedly diverted by the respondents to LBC Development Corporation, which in turn, used the amount to reduce the outstanding balance of the advances of the LBC affiliates, e.g. LBC Express and LBC Mabuhay, to make it appear that these affiliates paid back the advances made by LBC Bank in their favor. Furthermore, it was alleged that respondents used LBC Bank’s funds, which were primarily derived from the solicitation of deposits from the public, to pay for the unrecorded P30 million loan.
In the complaint, it was alleged that, as of bank closure, all advances to the LBC affiliates, including those which funded their remittance operations, aggregated to P5.4 billion.
The filing of syndicated estafa charges against Berenguer et al. is a welcome development in PDIC’s vigorous pursuit of legal action against erring bank owners, officers and personnel that aims to deter unscrupulous individuals from taking advantage of the deposit insurance system and to protect the interests of the depositors and the Deposit Insurance Fund, PDIC’s funding source for payment of deposit insurance.
