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DOJ Files P1.8 Billion Case vs. Urban Bank Officers

02.22.2001

The Bangko Sentral ng Pilipinas was informed today that the Department of Justice has filed with the courts new charges of estafa involving P1.8 billion against 11 Urban Bank officers.

The Department of Justice recommended a bail bond of P40,000 each for the provisional release of the accused.

Charged with the crime of estafa under the Revised Penal Code for transactions that allegedly contributed to the collapse of Urban Bank last year were:

  1. Arsenio M. Bartolome, Chairman of Urban Bank, Inc. (UBI) and Urbancorp Investments, Inc. (UII)
  2. Teodoro C. Borlongan, President and CEO of UBI and Director of UBI and UII
  3. Corazon M. Bejasa, Director and Corporate Secretary of UBI and UII
  4. Nida S. Santos, Senior Vice President of UBI and UII
  5. Milagros D. Santiago, Senior Manager of UBI and UII Trust Department
  6. Rowena E. Punsalan, Senior Manager of UBI and UII Trust Department
  7. Mark D. Ching,  Manager of UBI
  8. Chulla M. Formanes, Manager of UBI
  9. Loida O. Payonga, Assistant Vice President and Trust Officer of UII
  10. Amalia M. Ordas, Manager for Operations of UII Trust Department
  11. Cecilia M. Magugat, Vice President of UBI & UII

The DoJ filed two separate cases of estafa. One case pertains to transactions of April 24, 2000 involving P744,802,281.42 which was raffled to the sala of Judge Cesar Santamaria, while the other case pertains to transactions of April 25, 2000 involving Pl,049,518,573.29 which was raffled to the sala of Judge Tranquilino Salvador, both of the Makati Regional Trial Court, Branches 145 and 63, respectively.

These cases are separate from another case involving P2.8 billion arising from April 19, 2000 transactions filed earlier by the DoJ against the same persons, except Cecilia Magugat, and now pending in the sala of Judge Zeus C. Abrogar, also of the Makati Regional Trial Court, Branch 150.

The accused in both the P2.8 billion and P1.8 billion cases are charged with complicity in “willfully, unlawfully and feloniously” misappropriating or converting money solicited from UBI depositors and the general public to purchase substandard or doubtful receivables from the trust department of UBI’s affiliate, Urbancorp Investment, Inc.

The criminal informations said the accused did all this without the knowledge of the UBI and UII board of directors, and “knowing fully well that UBI was suffering from serious liquidity problems”.

Evidence supporting the criminal informations filed by the DoJ described the precarious financial condition of Urban Bank at the same time that its officers were purchasing doubtful receivables using depositors’ money to pay off clients of Urbancorp Investment, Inc.

The prosecutors said the non-performing loan ratios exceeded the industry average, the bank was consistently deficient in its capitalization, and the bank had to resort to heavy interbank borrowings to keep itself afloat.

The criminal informations further said that UBI, “after siphoning off the much needed amounts from UBI, unilaterally declared a bank holiday, to the prejudice of UBI, its depositors, creditors and the public . . .”

The criminal informations were signed by Senior State Prosecutor Len B. Dacera III and two State Prosecutors, Perfecto Lawrence D. Chua Chang and Pablo C. Fomaran III.

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