THE Court of Appeals (CA) has issued a 20-day freeze order on several bank accounts and other related web of accounts and assets of some 23 individuals involved in a multimillion-peso investment scam that victimized, among others, known personalities including television news anchor Korina Sanchez.

What's your take on the Mindanao crisis? Discuss views with other readers

A P512.2-million syndicated estafa case was filed by the Department of Justice (DOJ) before the Manila Regional Trial Court against respondents led by Dr. Rudy Enrique Olalia, president of Power Generation (Powergen) Trading Corp.

It was in May this year that the National Bureau of Investigation (NBI) lodged the complaint.

Aside from Olalia, other subjects of the complaint were Dr. Lourdes Tiu-Olalia, chief executive officer of Powergen; Attorney Marie Francesca Yuvienco, Katherine Rica Bautista, Rene Anastacio Olalia, all incorporators; Almer Cabigting, Michael Mojica, Pamela Joy Bagtas, Glenn Soriano, Janet Alfaro, Alfredo Ramos, Yolanda Garcia, Vayda Montes, Dr. Gaspar Montes, Allen David, and Angelo David, all officers of Powergen.

Also charged before the DOJ were Bernard De Venecia, Andrew De Venecia, Analyn De Venecia, Antonio Escamilla, Felipe Parena, Ariel Canuto, Raulito Manglapus Jr., and Jose Vivencio Reyes, of German Tech Asia Pacific, Inc., associate of Powergen.

Powergen is a company that retails petroleum products.

In a resolution penned by Associate Justice Noel Tijam, the CA's Third Division granted the ex-parte petition filed by the Anti-Money Laundering Council (AMLC) seeking to freeze assets and other monetary instruments of respondents who allegedly enticed persons into investing in their company with false promises of returns.

Sought to be frozen by the AMLC were the bank accounts, solely and/or jointly, in the names of incorporators of Powergen, German Tech, and St. Expeditus Corp. stashed in Banco de Oro-Equitable PCI Bank, BPI, BPI Family Bank, Hong Kong and Shanghai Banking Corp., Union Bank, United Coconut Planters' Bank, Metrobank, GE Money Bank, Robinson's Bank, Security Bank, and Rizal Commercial Banking Corp.

The ALMC likewise sought to subject to forfeiture proceedings the motor vehicles of Rudy Olalia consisting of Porsche Cayenne, Chrysler Town & Country, and BMW motorcycle; Lourdes Olalia's Mazda Tribute; Janet Alfaro's Mitsubishi Outlander; and Angelo David's Toyota Vios and Honda Civic.

The CA said the issuance of a freeze order is warranted in order to prevent the banking institutions from allowing any transactions with the respondents, such as withdrawals, transfers, removal, conversions or deposits of said accounts.

"The verified allegations of the petition as well as the supporting affidavits and other documents submitted herein indubitably prove that there is, indeed, reasonable ground to believe that the aforestated bank accounts are used by their account holders to transact the illegal investment scheme and that the other properties are proceeds from the same illegal activities; and that said bank accounts and other properties, being related to the unlawful activity, in violation of RA 9165," the court ruled.

Among the complainants in the syndicated estafa case were Sanchez; Jonathan and Minnie Yao; Lino Barte; Philip Recto; John Medel Cruz; Jose Palma Jr.; Rosemary David-de Galicia; Perfecto Espiritu; Rufino Agudera; Edgardo de Villa Jr.; Merle Florentino; Cecilio Vivar; Joel Mari Villa; Jocelyn Roxas; Jose Antonio Yturri.

Investigations showed that Powergen, through the Olalias, carried out their modus operandi by supposed solicitation of fuel orders from customers like bus companies and shipping lines that are buying on credit.

These fuel orders would be shown to prospective investors who may advance the money to pay for the fuel orders as a form of investment in view of the guaranteed promise of a high return, particularly a profit of six- to eight-percent of their investment in just a span of 33 days.

On maturity date, these investors would have the option of either pulling out their entire investment or rolling it over.

Upon agreeing to invest, investors would turn over their money to Powergen in the form of cash, check or fund transfer. Interests on their initial investments are paid, making it appear that the investments are really earning, to entice investors to invest more. Option to pull out only the interest and to maintain the principal investment is given to investors.

"Apparently, the funds used to support such undertaking were sourced from investments," the appellate court said.

The CA also ordered the banks to submit to the court and to the AMLC a detailed return on their compliance with the freeze order, specifying all pertinent and relevant information on all frozen bank accounts and other properties. (ECV/Sunnex)

For more Philippine news, visit Sun.Star Bacolod.

(November 12, 2008 issue)
Write letter to the editor. Click here.