Thursday, May 10, 2012

Syndicated estafa - G.R. No. 187919

G.R. No. 187919

"x  x x.


Anent the issue as to whether or not Gilbert Guy, et al. should be charged for syndicated estafa in relation to Section 1 of PD No. 1689, which states that:

SEC 1. Any person or persons who shall commit estafa or other forms of swindling as defined in Article 315 and 316 of the Revised Penal Code, as amended, shall be punished by life imprisonment to death if the swindling (estafa) is committed by a syndicate consisting of five or more persons formed with the intention of carrying out the unlawful or illegal act, transaction, enterprise or scheme, and the defraudation results in the misappropriation of moneys contributed by stockholders, or members of rural banks, cooperatives, “samahang nayon(s)”, or farmers associations, or of funds solicited by corporations/ associations from the general public.


We hold that the afore-quoted law applies to the case at bar, for the following reasons:

Under Section 1 of PD No. 1689, the elements of syndicated estafa are: (a) estafaor other forms of swindling as defined in Artilce 315 and 316 of the Revised Penal Code is committed; (b) the estafa or swindling is committed by a syndicate of five or more persons; and  (c) defraudation results in the misappropriation of moneys contributed by stockholders, or members of rural banks, cooperatives, “samahang nayon[s],” or farmers associations or of funds solicited by corporations/associations from the general public.[36]

 First, as defined under Section 1 of PD No. 1689, a syndicate “consists of five or more persons formed with the intention of carrying out the unlawful or illegal act, transaction, enterprise or scheme.” Five (5) accused, namely, Gilbert G. Guy, Rafael H. Galvez, Philip Leung, Katherine L. Guy, and Eugenio H. Galvez, Jr. were, (a) all involved in the formation of the entities used to defraud AUB; and (b) they were the officers and directors, both of RMSI and SPI, whose conformities paved the way for AUB to grant the letter of credit subject of this case, in AUB’s honest belief that SPI, as Gilbert Guy, et al.represented, was a mere division of RMSI. As already discussed, although Eugenio Galvez, Jr. was not a director of SPI, he, together with Gilbert Guy and Philip Leung, actively participated in the scheme through their signed correspondences with the bank and their attendance in the meetings with executives of AUB.[37] Rafael Galvez and Katherine Guy, on the other hand, were the directors of RMSI and SPI who caused and authorized Gilbert Guy and Philip Leung to transact with AUB.[38]
   
Second, while these corporations were established presumably in accordance with law, it cannot be denied that Gilbert G. Guy, Rafael H. Galvez, Philip Leung, Katherine L. Guy, and Eugenio H. Galvez, Jr. used these corporations to carry out the illegal and unlawful act of misrepresenting SPI as a mere division of RMSI, and, despite knowing SPI’s separate juridical personality, applied for a letter of credit secured by SPI’s promissory note, knowing fully that SPI has no credit line with AUB. The circumstances of the creation of these entities and their dealings with the bank reveal this criminal intent to defraud and to deceive AUB.  
Third, the fact that the defraudation of AUB resulted to misappropriation of the money which it solicited from the general public in the form of deposits was substantially established.[39] Section 3.1 of the General Banking Law defines banks as “entities engaged in the lending of funds obtained in the form of deposits.” The Old General Banking Act (R.A. No. 337) gave a fuller picture of the basic banking function of obtaining funds from the public by way of deposits and the lending of these funds as follows:

Sec 2. Only entities duly authorized by the Monetary Board of the Central Bank may engage in the lending of funds obtained from the public through the receipt of deposits of any kind, and all entities regularly conducting such operations shall be considered as banking institutions, xxxx.

Gilbert Guy et al. want this Court to believe that AUB, being a commercial bank, is beyond the coverage of PD No. 1689. We hold, however, that a bank is a corporation whose fund comes from the general public. P.D. No. 1689 does not distinguish the nature of the corporation. It requires, rather, that the funds of such corporation should come from the general public.  This is bolstered by the third “whereas clause” of the quoted law which states that the same also applies to other “corporations/associations operating on funds solicited from the general public.” This is precisely the very same scheme that PD No. 1689 contemplates that this species of estafa “be checked or at least be minimized by imposing capital punishment involving funds solicited by corporations/associations from the general public” because “this erodes the confidence of the public in the banking and cooperative system, contravenes public interest and constitutes economic sabotage that threatens the stability of the nation.”[40]    

 Hence, for the stated reasons, we applied the law in People v. Balasa,[41] a non-stock/non-profit corporation – the Panata Foundation of the Philippines, Inc.  We held that PD No. 1689 also applies to other corporations/associations operating on funds solicited from the general public.

In People v. Romero,[42] we also applied the law to a stock corporation engaged in marketing, the Surigao San Andres Industrial Development Corporation.  Likewise, inPeople v. Menil,[43] we applied the law to another marketing firm known as ABM Appliance and Upholstery. 

In these cited cases, the accused used the legitimacy of their entities to perpetrate their unlawful and illegal acts. We see no reason not to apply this law to a banking institution, a corporation imbued with public interest, when a clear reading of the PD 1689 reveals that it is within its coverage.
x x x."

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