The Regional Trial Court of Malolos, Bulacan, Branch 17, promulgated, on 13 October 2015, two separate Decisions convicting Hilario P. Soriano, former president of the closed Rural Bank of San Miguel (Bulacan), Inc. (RBSM). In each of the Decisions for two consolidated criminal cases, penned by Presiding Judge Ma. Theresa V. Mendoza-Arcega, the RTC-Malolos found the accused, Soriano, guilty of (a) violation of the General Banking Act, which restricts the loan exposure of a bank to its own directors, officers, stockholders and their related interests; and (b) estafa through falsification of commercial documents under the Revised Penal Code. Also an accused in the criminal cases was Rosalinda E. Ilagan, a former branch manager of RBSM. However, Ilagan’s criminal liability was extinguished upon her death prior to the resolution of the cases.
In the first set of cases, Soriano and Ilagan conspired to siphon funds from RBSM through a fraudulent loan under the name of (the late) Virgilio J. Malang, who was acquainted with Soriano, but was neither aware of, nor involved in obtaining the loan. Soriano and Ilagan fabricated Malang's loan documents, and transferred its proceeds to a bank account under Malang's name, with another bank owned by Soriano, before appropriating it for their own personal gain and benefit.
In the second set of cases, Soriano and Ilagan made it appear, through the same means, that another acquaintance of Soriano, Engr. Enrico Carlos, obtained a loan from RBSM. Thereafter, Soriano and Ilagan withdrew the loan proceeds for their own personal gain and benefit.
The anomalous loans were discovered by a BSP bank examiner of the (then) Department of Rural Banks, (the late) Herminio C. Principio. In the course of his examination of RBSM, Principio came across the purported loan documents, which he found to be questionable. Further investigation and, later, testimonies given in court by alleged borrowers Malang and Carlos, as well as former bank employees, confirmed that the accused fabricated and falsified documents to obtain indirect loans from RBSM, and that these loans had never been approved by the bank's board of directors.
Under the General Banking Act, bank directors and officers are prohibited from borrowing, either directly or indirectly, from the institutions in which they hold office, except with the written approval of the majority of the bank’s directors. This required approval should be included and reflected in the bank’s records.
For each violation of the General Banking Act, Soriano was sentenced to suffer imprisonment of ten years and to pay a fine of Php 200,000.00; and for each count of estafa through falsification of commercial documents, to suffer imprisonment of at least ten years and one day to at most twenty years. He was also made to indemnify RBSM, its creditors, and the BSP a total of Php 22.775 million.
At the time of sentencing, Soriano was already incarcerated at the National Bilibid Prisons in Muntinlupa for various prior convictions involving estafa and falsification of documents. Not counting the penalties for these latest convictions, Soriano was already serving an aggregate prison sentence of one hundred years as maximum, more or less. However, under the law, he will be made to serve no more than forty years.
The Bangko Sentral ng Pilipinas acts as the regulator of the country’s banks and financial institutions. It ensures, through periodic examination, that their operations are consistently compliant with existing laws and their implementing rules and regulations.