The Bangko Sentral ng Pilipinas (BSP) successfully prosecuted the former president of a closed rural bank for falsification of documents and for reporting false statements to the BSP.
Pepito Miradora Cilos, former president of Rural Bank of Milaor (Camarines Sur), Inc. (RB Milaor), was found guilty and sentenced by the 5th Municipal Trial Court of Camaligan-Gainza-Milaor, Camarines Sur to imprisonment (four months and one day of arresto mayor to two years four months and one day of prision correccional for falsification of commercial documents; one year for false statements) and the payment of fines. The BSP filed the charges as a result of its investigation on the transactions of RB Milaor.
The cases arose from the grant of four (4) loans with aggregate amount of Php6.5 million by RB Milaor on 30 May 2008. The BSP’s Office of Special Investigation found that the four loans were questionable and fraudulent for the following reasons: a) the borrowers could not be found in the addresses given in the loan documents; b) the land title securing one of the loans is questionable as certified by the Register of Deeds; c) the land titles used as collaterals for three of the loans were issued a few months after their loans were granted; d) the loan documents were haphazardly processed and resulted in deficient documentation; and e) the reference numbers of the Community Tax Certificates of the borrowers appearing in the loan documents were not issued by the concerned municipalities.
The fraudulent loans formed part of the loan portfolio of RB Milaor and were reported in the bank’s Consolidated Statements of Condition (CSOCs). The BSP considered the four (4) CSOCs signed by Mr. Cilos as falsified because the CSOCs included the four loans. Moreover, considering that CSOCs are submitted by RB Milaor as part of its reportorial requirements to the BSP or its examiners, any false or misleading statement on the contents of CSOCs makes the responsible person (Mr. Cilos) criminally liable.