REPUBLIC OF THE PHILIPPINES
DEPARTMENT OF JUSTICE
OFFICE OF THE CITY PROSECUTOR
MANILA
PHILIP H. PICCIO,
Complainant-Affiant,
- versus -
I.S. No. __________________
For: Syndicated Estafa
AMBASSADOR
ALFONSO
T.
YUCHENGCO, HELEN YUCHENGCO
DEE, ALFONSO S. YUCHENGCO III,
ALFONSO S. YUCHENGCO, JR.,
YVONNE S. YUCHENGCO, SUSANNE
YUCHENGCO SANTOS, RICARDO K.
CHUA, PORFIRIO S. DE GUZMAN,
JR., JOSE C. DELA CRUZ, FELIX B.
DESIDERIO, JR., MARCELO T. DY,
ERNESTO C. GARCIA, LIWAYWAY F.
GENER, NORMAN N. GONZALEZ,
JOSEPH I. GRIÑO, ARMANDO M.
MEDINA, MARIBEL A. OBIDOS, NILO
ONA, PATRICIO A. PICAZO, GUIA
MARGARITA
SANTOS
QUA,
EMETERIO ROA, JR., ARMELA
SANTIAGO, MARIA JEANETTE C.
TECSON, SAMUEL V. TORRES, AND
ADELITA A. VERGEL DE DIOS,
Respondents.
x---------------------------------------------------x
COMPLAINT-AFFIDAVIT
COMPLAINANT-AFFIANT PHILIP H. PICCIO, Filipino, of legal age,
married, with residence address at No. 40 Buchanan Street, North Greenhills,
San Juan, Metro Manila, after being sworn in accordance with law, hereby
deposes and states that:
1
The Parties
1.
Complainant-Affiant is the holder of one (1) fully paid Traditional
Pacific Educational Plans (hereinafter “PEPTRAD”), described as follows:
Beneficiary
Paola Nicola T. Piccio
Type of Plan
Traditional
Date & Place of Issue
Dec. 18, 1990, Manila
EPA No.
1085648-5
Copies of Complainant-Affiant’s respective plan and certificate are hereto
attached as Annexes “A” and “B”, respectively.
2.
Pacific Plans, Inc. (hereinafter “PPI”) is a domestic corporation duly
organized and existing under Philippine laws, with current office address at No.
9304 Kamagong corner Dungon Sts., Barangay San Antonio, Makati City.
However, during the pertinent period when the crime was committed, and as
stated in its January 5, 2005 General Information Sheet (GIS) and Articles of
Incorporation filed with the Securities and Exchange Commission, its principal
office is located at Y Tower I, 500 Q. Paredes Street, Binondo, Manila.
3.
Respondents are the Directors and/or officers of PPI who, as a
syndicate consisting of more than five (5) persons, carried out the unlawful and
fraudulent acts described herein. Specifically, they have defrauded herein
Complainant-Affiant and other members of the general public numbering at least
34,000 planholders by: 1) falsely pretending to possess power, capability and
capacity to assume the risks inherent in open-ended Traditional Educational
Plans and to honor its contractual obligations to its Traditional Educational
planholders “irrespective of cost at the time of availment”; and 2) inducing
Complainant-Affiant and other private citizens into signing contracts for
Traditional Educational Plans with PPI and
parting with their hard-earned
money, based on their fraudulent misrepresentation that they will assume the
risks inherent in open-ended Traditional Educational Plans and honor PPI’s
contractual obligations. Respondents are charged for committing the crime of
Syndicated Estafa under Article 315, Par. 3(a) and Article 315, Par. 2(a) of the
Revised Penal Code, as amended by P.D. 1689.
2
4.
The identified members of the Board of Directors and officers of
PPI from 1986, when the Company started selling and misrepresenting to the
public that it will assume the risks inherent in its open-ended Traditional
Educational Plans, until the present time when it reneged on its contractual
obligations, are as follows:
NAMES OF RESPONDENTS
a) Chua, Ricardo K.
b) Dee, Helen Yuchengco
c) De Guzman, Porfirio S.,
Jr.
d) Dela Cruz, Jose C.
e) Desiderio, Felix B., Jr.
f)
Dy, Marcelo T.
g) Garcia, Ernesto C.
h)
i)
j)
k)
l)
m)
Gener, Liwayway F.
Gonzalez, Norman N.
Griño, Joseph I.
Medina, Armando M.
Obidos, Maribel A.
Ona, Nilo
n) Picazo, Patricio A.
o) Qua, Guia Margarita
Santos
p) Roa, Emeterio, Jr.
q) Santiago, Armela
r) Santos, Susanne
Yuchengco
s) Tecson, Maria Jeanette C.
t)
Torres, Samuel V.
u) Vergel de Dios, Adelita A.
v) Yuchengco, Ambassador
Alfonso T.
w) Yuchengco, Alfonso S.,
Jr.
x) Yuchengco, Alfonso S. III
y) Yuchengco, Yvonne S.
ADDRESS
c/o Pacific Plans Inc., GPL Bldg., 221 Gen. Gil J. Puyat
Ave., Makati City
1150 Tamarind Road, Forbes Park, Makati City
33 Soriano St., BF Homes, Parañaque City
Tordesillas, Salcedo Village, Makati City
c/o Pacific Plans Inc., GPL Bldg., 221 Gen. Gil J. Puyat
Ave., Makati City
501 One Magnificent Mile-Citra, San Miguel Ave.,
Ortigas Center, Pasig City
23 Reynado St., T. Bella Homes, Tandang Sora,
Quezon City
3rd Floor, Grepalife Building, 221 Gen. Puyat Ave.,
Makati City
c/o Y Tower I, 500 Q. Paredes Street, Binondo, Manila
Y Tower II, 500 Q. Paredes St., Binondo, Manila
c/o Y Tower I, Q. Paredes St., Binondo, Manila
Alexandra Condominium, Pasig City
Y Tower II, 500 Q. Paredes St., Binondo, Manila
c/o Pacific Plans Inc., GPL Bldg., 221 Gen. Gil J. Puyat
Ave., Makati City
c/o Pacific Plans Inc., GPL Bldg., 221 Gen. Gil J. Puyat
Ave., Makati City
Wack Wack Cond., Mandaluyong City
549 Greenhills, Mandaluyong City
c/o Pacific Plans Inc., GPL Bldg., 221 Gen. Gil J. Puyat
Ave., Makati City
47 McKinley Road, Forbes Park, Makati City
501 One Magnificent Mile-Citra, San Miguel Ave.,
Ortigas Center, Pasig City
c/o 7th Floor, Yuchengco Tower I, RCBC Plaza,
6819 Ayala Avenue, Makati City
GPL Building, 221 Gil Puyat Ave., Makati City
29 Tamarind Rd., Forbes Park, Makati City
Yuchengco Drive, Pacific Malayan Village, Alabang,
Muntinlupa City
1202 Salcedo Place Condominium, Tordesillas,
Salcedo Village, Makati City
Alexandra Condominium, Pasig City
5. This Criminal Complaint also impleads “John Does” who participated in
the criminal acts described hereunder but whose exact identities and addresses
cannot yet be ascertained at the present time. Complainant-Affiant undertakes to
identify them during the course of these proceedings.
3
Acts Constituting Violations of
Article 315 Par. 3(a) and Article 315, Par.
2(a) of the Revised Penal Code
PPI
and
Respondents
induced
Complainant-Affiant and other private
citizens
into
signing
contracts
for
Traditional Educational Plans with PPI and
parting with their money, based on their
fraudulent misrepresentation that they will
assume the risks inherent in open-ended
Traditional Educational Plans and honor
PPI’s contractual obligations.
6.
Article 315, Par. 3 (a) of the Revised Penal Code states that
Swindling or Estafa is committed:
“3.
means:
Through any of the following fraudulent
(a) By inducing another, by means of deceit, to
sign any document….”
7. In 1986, PPI, through its Directors and Officers, sold its Traditional
Educational Plan (“PEPTRAD”) to the general public. In its Educational Plan
Agreement, PPI represented to the general public that, under its PEPTRAD
policies, it will pay, “irrespective of cost at the time of availment”, the tuition
and standard school fees for enrollment of the scholar, to wit:
“In consideration of the payment of the PreNeed Price (PNP), including handling charges if any,
and the fulfillment of the other terms and conditions of
the Education Plan Agreement, PACIFIC guarantees
to pay, irrespective of cost at the time of
availment, the tuition and other standard school
fees for enrollment of the SCHOLAR in the
Educational
Program
contracted
by
the
PLANHOLDER.” 1 (Emphasis supplied.)
A copy of the PEPTRAD Educational Plan Agreement which Complainant-Affiant
executed with PPI is attached hereto as Annex “A”.
1
Education Plan Agreement (Annex “A”), First Paragraph, Section I (“Consideration and
Guarantees”).
4
8. In its plan-agreements, advertisements, product brochures, letterhead
and other printed materials, PPI proudly carried the familiar blue hexagon logo of
the Yuchengco Group of Companies (hereinafter “YGC”) and boldly identified
itself as “a YGC Company”.
9. The Yuchengco Group of Companies is a formidable conglomerate of
some of the country’s top corporations, which include the Malayan Group, the
Grepalife Group, the Rizal Commercial Banking Corporation (hereinafter
“RCBC”) Group and the House of Investments Group, under which falls the EEI
Corporation, Landev Corporation, Funeraria Paz Sucat, Manila Memorial Park
Cemetery, Inc. and Mapua Institute of Technology.
10. The plan-agreements, advertisements, product brochures, letterhead
and other printed materials which were disseminated by PPI and its Directors
and officers to the general public capitalized on the financial muscle of the
Yuchengco Group of Companies and the renowned Yuchengco name to induce
and entice Complainant-Affiant and numerous other planholders, numbering at
least 34,000, to choose PPI’s Traditional Education Plans over comparative
products offered by other pre-need companies.
11. Relying on PPI’s guarantee that it will pay, irrespective of cost at the
time of availment, the tuition and standard school fees for enrollment of the
scholar, Complainant-Affiant was induced to part with his hard earned money
and purchase one (1) Traditional Educational Plan from PPI on March 2, 1992.
a) By
buying
an
educational
plan
from
PPI,
Complainant-Affiant obliged himself to regularly pay
for the monthly premiums due and the corresponding
penalties for late payments.
b) PPI’s obligation, on the other hand, is stated under
the Education Plan Agreement (hereinafter “EPA”),
wherein PPI guaranteed that it will pay, “irrespective
of cost at the time of availment”, the tuition and
standard school fees for enrollment of the scholar
(Annex “A”).
5
12. Complainant-Affiant invested in the PEPTRAD because he dreamt of
giving his child a better future by ensuring that his child receives quality
education. Little did Complainant-Affiant know that, after inveigling him to part
with his hard-earned money, PPI, through its Directors and officers, will now try
to avoid compliance with its contractual obligation to pay for the tuition and other
standard school fees of the beneficiaries of the PEPTRAD plans.
PPI fraudulently pretended to possess the
power and ability to assume the risks
inherent in its open-ended Traditional
Educational Plans and to honor its
contractual obligation to pay, “irrespective
of cost at the time of availment”, the tuition
and other standard school fees for
enrollment of its scholars.
13. Article 315, Par. 2(a) of the Revised Penal Code states that Swindling
or Estafa is committed:
“2. By means of any of the following false pretenses or
fraudulent acts executed prior to or simultaneously with the
commission of the fraud:
“(a) By using a fictitious name, or falsely
pretending
to
possess
power,
influence,
qualifications, property, credit, agency, business or
imaginary transactions or by means of similar
deceits.” (Emphasis supplied)
14. The elements of the crime of Estafa by means of deceit under
Paragraph 2(a), Article 315 of the Revised Penal Code are:
a) That there must be a false pretense, fraudulent act or
fraudulent means;
b) That such false pretense, fraudulent act or fraudulent
means must be made or executed prior to or
simultaneously with the commission of the fraud;
c) That the offended party must have relied on the false
pretense, fraudulent act, or fraudulent means; that is,
he was induced to part with his money or property
because of the false pretense, fraudulent act, or
fraudulent means; and
d) That as a result thereof, the offended party suffered
damage.
6
15. All the above-mentioned elements are present in the case at bar, thus
warranting the conviction of Respondents for the crime of Syndicated Estafa
under Article 315, Par. 2(a) of the Revised Penal Code, as amended by P.D.
1689.
16. As stated under the Education Plan Agreement, PPI, through its
Directors and officers, guaranteed that it will pay, “irrespective of cost at the
time of availment”, the tuition and other standard school fees for enrollment of
the scholars.
This misrepresentation and false pretense that it possesses
power, capacity and capability to assume the risks inherent in its open-ended
Traditional Educational Plans and to honor its contractual obligations thereunder
were made by PPI, through its Directors and officers, prior to or simultaneously
with the commission of the fraud in order to induce Complainant-Affiant and other
planholders to part with their hard-earned money. Complainant-Affiant believed in
PPI’s false pretense that it would assume the risks inherent in its open-ended
Traditional Educational Plans and honor its contractual obligation to shoulder the
tuition and other standard school fees for enrollment of the planholders’ scholars.
17.
PPI, through its Directors and officers, profusely assured
Complainant-Affiant and other planholders that they made the right choice in
purchasing the Traditional Educational Plans and that “no matter what the cost
is, no matter what happens, (their) child is assured of education”. Thus, in
its congratulatory letter to buyers of PEPTRAD plans, PPI acclaimed:
“You could not have made a wiser decision
when you decided to get a PACIFIC EDUCATION
PLAN (PEP) for your child. In so doing, you have just
made certain that no matter what the cost is, no
matter what happens, your child is assured of
education.
THIS PLAN IS AN INHERITANCE OF
KNOWLEDGE THAT YOU ARE HANDING TO YOUR
CHILD. IT IS OF INESTIMABLE VALUE. THERE
CAN BE NO GREATER GIFT.
PACIFIC EDUCATION PLAN offers more than
just an education. It assures your child’s future and
everything that comes with it.” (Emphasis supplied.)
A copy of a sample congratulatory letter from PPI is attached hereto as
Annex “C”.
7
18. The Education Plan Agreement or PEPTRAD policy itself expressly
guarantees as follows:
“In consideration of the payment of the PreNeed Price (PNP), including handling charges if any,
and the fulfillment of the other terms and conditions of
the Education Plan Agreement, PACIFIC guarantees
to pay, irrespective of cost at the time of
availment, the tuition and other standard school
fees for enrollment of the SCHOLAR in the
Educational
Program
contracted
by
the
2
PLANHOLDER.” (Emphasis supplied.)
A copy of the PEPTRAD Educational Plan Agreement which Complainant-Affiant
executed with PPI is attached hereto as Annex “A”.
19. The policy likewise provided for other benefits, such as cash awards
for scholastic achievement and insurance benefits (Please see ComplainantAffiant’s PEPTRAD Education Plan Agreement attached hereto as Annex “A”.)
20. Complainant-Affiant and the other planholders scrimped, saved and/or
borrowed to meet payments due on their respective PEPTRAD policies, which
are comparatively more expensive than the fixed value plans, in order to avoid
cancellation of the plans and forfeiture of their payments.
21. Any planholder who failed to pay any installment, regardless of the
reason for such failure to pay, was subjected to the following penalty provisions
of the Education Plan Agreement:
“VIII. GRACE PERIOD
PLANHOLDER is given a grace period of two
(2) months within which to pay any installment due. If
any installment remains unpaid beyond the grace
period, this Agreement shall be considered of no force
and effect. However, the PLANHOLDER shall be
allowed to reinstate this Agreement within a period of
two (2) years from date of default. Otherwise, this
Agreement shall be considered automatically
cancelled and all payments shall be forfeited in favor
of PACIFIC as liquidated damages.” 3
2
3
Education Plan Agreement (Annex “A”), First Paragraph, Section I (“Consideration and
Guarantees”).
Education Plan Agreement (Annex “A”), Section VIII.
8
Furthermore, reinstatement was conditioned upon full payment of all
overdue installments with surcharge from due date at the rate of 18% per
annum.” 4
22. On June 9, 2004, the Board of Directors of PPI, who included some of
the Respondents herein, passed a Board Resolution approving the sale of PPI’s
memorial, pension and fixed educational plans to Lifetime Plans, Inc., in
exchange for shares of stock in said corporation.
23. Subsequently, on August 12, 2004, Lifetime Plans was incorporated
as a wholly-owned subsidiary of PPI via an asset-for-share swap. PPI assigned
to Lifetime Plans all its pre-need plans businesses (except the long-discontinued
PEPTRAD) in exchange for one million (1,000,000) shares of stock of Lifetime
Plans, with a total par value of One Hundred Million Pesos (Php100,000,000.00).
A copy of PPI’s 2005 audited Financial Statements (which contain its audited
Financial Statements for the Years 2004 and 2005) is attached hereto as Annex
“D”.
24. Sometime in August, 2004, PPI, through its Board of Directors,
approved the sale of all its shares of stock in Lifetime Plans to PPI’s own
parent company, GPL Holdings, Inc., at a purchase price of only
Php205,137,860.00.
PPI, therefore, violated its representation to the SEC
that Lifetime Plans would be a wholly-owned subsidiary of PPI. Moreover,
PPI did not receive a centavo of the Php205,137,860.00 purchase price in
cash.
In his Affidavit of General Financial Condition, 5 PPI’s incumbent
President/Chairman Ernesto C. Garcia explained that the Php205,137,860.00
purchase price was offset against an alleged liability of PPI to GPLHI. 6
Strangely, however, while GPLHI is the parent company of PPI and is
clearly a related party to the latter, no mention of any such alleged liability
of PPI to GPLHI appears in the auditor’s notes on “Related Party
Transactions” in either the 2003 or 2004 audited Financial Statements of
PPI. Moreover, neither PPI nor Lifetime Plans disclosed to the SEC that PPI was
about to transfer its entire shareholdings in Lifetime Plans.
4
5
6
Ibid, Section IX(3).
PPI’s Petition for Corporate Rehabilitation with Prayer for Suspension of Payments, Annex
“E”.
Ibid., page 6, item 17C.
9
25. By virtue of the foregoing transfers and misappropriation of funds, trust
funds and assets from PPI to Lifetime Plans, PPI, through its Directors and
Officers, self-engineered its state of “financial distress” and artificially contrived a
“liquidity problem” for PPI to support its Petition for Corporate Rehabilitation and
Suspension of Payments and effectively deny Complainant-Affiant and the other
planholders of their full rights under their Traditional Educational Plans.
26. Thus, on March 31, 2005, the members of the Board of Directors of
PPI, who include some of the Respondents herein, passed a Board Resolution
approving the filing of a Petition for Corporate Rehabilitation with Suspension of
Payments in court. Subsequently, on April 7, 2005, without prior notice to the
planholders, PPI filed said Petition in Special Proceedings No. M-6059 before
Branch 61 of the Regional Trial Court of Makati City. A copy of said Petition is
attached hereto as Annex “E”.
27. In Special Proceedings No. M-6059, PPI, through its Directors and
Officers, seeks to impose upon PEPTRAD planholders a mandatory swap at a
lower yield of seven percent per annum (7% p.a.) to mature and be paid-out
date in the year 2010.
28. This clearly deviates from the agreement of the parties, as stated in
the Educational Plan Agreement (Annex “A”), that “PACIFIC guarantees to pay,
irrespective of cost at the time of availment, the tuition and other standard
school fees for enrollment of the SCHOLAR in the Educational Program
contracted by the PLANHOLDER” 7
29. Thus, after swindling the planholders off their hard-earned money,
PPI, through its Directors and Officers, now tries to avoid compliance with its
contractual obligations. The fraudulent scheme perpetrated by PPI was severely
criticized by SEC on pages 49-55 of its Comment dated May 16, 2005 which it
filed in Special Proceedings No. M-6059, stating: a)
that PPI’s Petition for
Corporate Rehabilitation filed before the RTC of Makati City is “part of a predesigned plan of Pacific”; b) that “the series of dispositions and acquisitions by
Pacific vis a vis its related companies is a FRAUDULENT SCHEME to keep its
assets away from the reach of the traditional planholders”; and c) that PPI has
been guilty of bad faith in its dealings with SEC and the BIR, to wit:
7
Express guarantee of PPI in the Education Plan Agreement or PEPTRAD policy (Annex
“A”), which PPI itself drafted.
10
“The sequence of actions undertaken by
Pacific prior to its filing of the instant petition plainly
shows that this petition is part of a pre-designed plan
of Pacific to relieve release of its not so profitable
business, which is the traditional education plans…
The hasty recourse to this Court appears to be
a ploy on the part of Pacific to Elude SEC intervention
and enable it to force its Swap Offer to the
planholders in the guise of a rehabilitation
proceedings. With the filing of the instant petition,
Pacific simple wanted to tie the hands of the SEC so
that it can no longer pursue administrative measures
to protect the investors, as it has been duty bound to
do…
The series of dispositions and acquisitions by
Pacific vis-à-vis its related companies is a
FRAUDULENT SCHEME to keep its assets away
from the reach of traditional planholders…
This, in addition to the abovementioned actions
by Pacific, exhibits the company’s BAD FAITH in its
dealings with the SEC and BIR…” 8 (Emphasis
supplied)
A copy of SEC’s Comment dated May 16, 2005 is attached hereto as
Annex “F”.
30. Subsequently, in an Order dated 24 May 2005 and a Resolution dated
24 June 2005, the SEC en banc revoked the Certificate of Incorporation of
Lifetime Plans, Inc., in recognition of the said corporation’s role in the fraudulent
transfer of PPI assets to put them beyond the reach of the rightful beneficiaries:
the planholders. Copies of the SEC’s Order dated 24 May 2005 and the
Resolution dated 24 June 2005 are hereto attached and made an integral part
hereof as Annexes “G” and “H”.
31. Now, PPI, through its Directors and Officers, conveniently claims that
it can no longer comply with its obligation to “pay, irrespective of cost at the
time of availment, the tuition and standard school fees for enrollment of the
scholar,” to the prejudice of Complainant-Affiant and other planholders who have
religiously complied with their obligation to pay their monthly premiums.
Consequently, Complainant-Affiant suffered actual damage and sleepless nights,
resulting from the non-payment of the full tuition fees and other standard school
fees for School Year 2005-2006.
8
Securities and Exchange Commission COMMENT dated 16 May 2005 (Annex “F), pp. 4955.
11
32. While PPI, through its Directors and Officers, claims that it is “illiquid”
and, therefore, needs to suspend payment to its planholders, its own audited
Financial Statements for the Years 2004 and 2005 show otherwise. Indeed,
PPI’s own audited Financial Statements for the Years 2004 and 2005 will show
that PPI is liquid and solvent. They also show that PPI’s Trust Fund has a
positive variance when compared to its Actuarial Reserve Liability, thus evincing
that it has sufficient funds to pay the benefits due its planholders and that it has
sufficient liquid assets to pay the same within the maturity periods of the plans.
A copy of PPI’s 2005 audited Financial Statements (which contain its audited
Financial Statements for the Years 2004 and 2005) is attached hereto as Annex
“D”.
33. That PPI is indeed liquid and solvent is confirmed by no less than the
Securities and Exchange Commission, the supervisory arm of the Philippine
Government, which reported on pages 32-49 of its Comment dated May 16, 2005
filed in Special Proceedings No. M-6059 (a copy of which is attached as Annex
“F” hereof) that:
a) “(P)er the documents submitted to the SEC in compliance
with its reportorial obligations, Petitioner is solvent and liquid.
Thus, resort to corporate rehabilitation is not necessary”
(See page 49 of SEC’s Comment attached as Annex “F”
hereof);
b) PPI is a “financially stable corporation capable of meeting its
obligations as they fall due” (See page 46 of SEC’s
Comment attached as Annex “F” hereof);
c) PPI’s 2004 audited Financial Statements show that, as of
December 2004: 1) its assets exceeded its liabilities and it
had a Solvency Ratio of 1.24:1.0; 2) its current assets
exceeded its current liabilities and it had a Liquidity Ratio of
1.77: 1 (See pages 33 and 47 of SEC’s Comment attached
as Annex “F” hereof);
12
d) “(A)s of December 2004, PPI exceeded its Trust Fund
Liquidity Reserve Requirement by P3,772,485,371.66”. (See
page 33 of SEC’s Comment attached as Annex “F” hereof);
e) “The company has been declaring stock and cash dividends
since 1989”. (See page 40 of SEC’s Comment attached as
Annex “F” hereof);
f) Based on the Table of Projected Benefits and Trust Fund
Contributions submitted by PPI on October 29, 2004, PPI is
capable of meeting its projected obligations until the year
2014. According to SEC, “in fact, its trust fund exceeds its
projected benefits by P1,209,062,409.26, which does not
even include interest income that should accrue annually on
the trust fund and possible foreign exchange gain that may
be earned by the Napocor bonds, the main asset of the trust
fund.” (See pp. 47-48 of Comment attached as Annex “F”
hereof).
34. Based on the foregoing findings by SEC, PPI is not a “financially
distressed corporation”, as it misrepresents itself to be. SEC, therefore,
concluded that:
“All these audit findings reveal a healthy
financial status of Pacific…and its deliberate attempt
to evade the payment of its contractual obligations by
diverting its funds to the payment of dividends to its
stockholders to the prejudice of the planholders.”
((See page 45 of SEC’s Comment attached as Annex
“F” hereof).
35. Pursuant to the Order dated April 12, 2005 issued by the Court in
Special Proceedings No. M-6059, PPI released tuition support for the first
semester of School Year 2005-2006. Such tuition support, however, fell short of
the full tuition and PPI’s contractual obligation to pay “irrespective of cost at the
time of availment”.
Likewise, little or no tuition support was given for the
second semester of school year 2005-2006. Consequently, Complainant-Affiant
suffered actual damage and sleepless nights, resulting from the non-payment of
the full tuition fees and other standard school fees for School Year 2006-2005.
The tuition and other standard school fees for enrollment of the planholders’
13
designated scholars which PPI failed to pay, thus causing damage and prejudice
to herein Complainant-Affiant, are as follows:
Beneficiary
Paola Nicola T. Piccio
Tuition Support
P28,000.00
Actual Tuition
P32,000.00
Balance
P4,000.00
A copy of the tuition fee receipt in support of the foregoing is hereto attached and
made an integral part hereof as Annex “I”.
36. Despite repeated demands made by Complainant-Affiant and other
planholders, PPI, through its Directors and Officers, continues to fail and refuse
to comply with its contractual obligation under the Education Plan Agreement,
wherein it guaranteed to pay “irrespective of cost at the time of availment”,
the tuition and other standard school fees for enrollment of the scholars (Annex
“A”).
D. Elements of Syndicated Estafa under PD 1689
37. Presidential Decree No. 1689 9 (hereinafter “PD 1689”) increases the
penalty of Swindling or Estafa which is committed by a syndicate consisting of
five or more persons. The elements of the crime are as follows:
a. Estafa or other forms of swindling as defined in
Articles 315 and 316 of the Revised Penal Code is
committed;
b. The estafa or swindling is committed by a syndicate;
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. 10
38. All the above-mentioned elements are present in the case at bar, thus
warranting the application of PD 1689 with the consequent increase in the
penalty to life imprisonment to death.
9
10
P.D. No. 1689 – Increasing the Penalty for Certain Forms of Swindling or Estafa.
Bobis, et al. v. The Provincial Sheriff of Camarinas Norte, G.R. No. L-29838. March 18,
1983.
14
a) As already discussed earlier, Estafa under Article 315 of the
Revised Penal Code has been committed by PPI and
Respondents through their fraudulent representations and
machinations
in
order
to
avoid
compliance
with
PPI’s
contractual obligations.
b) PD 1689 defines a syndicate as "consisting of five or more
persons formed with the intention of carrying out the unlawful or
illegal
act,
transaction,
enterprise
or
scheme."
Here,
Respondents number more than five (5), acting together to
defraud herein Complainant-Affiant and other PEPTRAD
planholders.
c) Respondents’ acts amounted to a defraudation resulting in the
misappropriation of funds solicited by corporations/associations
from the general public:
i. As a pre-need company, PPI operated on funds
solicited from the general public to whom it marketed
its products.
ii. The Supreme Court has ruled that to be criminally
liable under PD 1689, one need not necessarily
threaten the economic stability of the nation; it is
enough that the acts complained of contravenes
public interest:
“Assuming
arguendo
that
the
preamble was part of the statute, appellants'
contention that they should not be held
criminally liable because it was not proven
that their acts constituted economic sabotage
threatening the stability of the nation remains
too flimsy for extensive discussion. As the
preamble of P.D. No. 1689 shows, the act
prohibited therein need not necessarily
threaten the stability of the nation. It is
sufficient that it "contravenes public
interest." Public interest was affected by
the solicitation of deposits under a
promise of substantial profits, as it was
people coming from the lower income
15
brackets who were victimized by the
illegal scheme.” 11
iii. The perpetration by PPI of its scheme to eschew its
clear contractual obligation has eroded the public
confidence in pre-need companies, precipitating the
demise of the pre-need industry in our country.
Respondents’ acts, therefore, contravened public
interest because they victimized at least 34,000
planholders, thus resulting in the erosion of public
confidence in the pre-need industry.
iv. The SEC has confirmed that “Pacific is not an
ordinary corporation. Its business activity is imbued
with public interest considering that its clients are the
innocent investors, parents mostly who pay their hardearned money to these pre-need companies in order
to secure the education of their children.” (See page
51 of SEC’s Comment dated May 16, 2005, attached
as Annex “F” hereof.)
39.
As clearly established above, the elements of PD 1689 are all
present in this case, hence, warranting the imposition of the increase in the
penalty of the crime to life imprisonment to death, with the consequence of
having the offense elevated to a non-bailable offense.
40. Considering that PPI is a corporation, the case of Prudential Bank vs.
IAC 12 clearly states that “It is clear that if the violation or offense is committed by
a corporation, partnership, association or other juridical entities, the penalty shall
be imposed upon the directors, officers, employees or other officials or persons
therein responsible for the offense.”
41. The crime of Estafa committed herein was committed as early as
1990 and continues until the present time, and the same may be tried in the court
of the municipality or territory wherein any one of the essential ingredients
thereof took place.
11
12
People v. Balasa, et al., G.R. No. 106357. September 3, 1998.
December 1992.
16