Trio in multimillion estafa case drew cash from 71 firms, persons

MORE than 70 individuals and entities were victimized in an alleged investment scam planned by three people who bagged around P3 billion worth of cash, says one of its victims.

However, two of the alleged scammers say it was no scam but just their mistake to borrow money from the alleged victims at high interest rates, making it difficult to repay them.

Cebu-based businessman and one of the victims, Kaiser Christopher Tan, told reporters on Friday, Feb. 3, 2023, that 10 of the 71 victim-lenders were already coordinating to build cases against the alleged scammers.

Tan said they will have an online meeting with the victims on Friday night to discuss further measures on the case.

Arrest warrant

On Jan. 23, 2023, a warrant of arrest against the suspects, Michelle Lim Go and Lorenzo Baltonado Jr., and his wife, Jerlyn Joyce Baltonado, was issued by Judge Judilyn Hugot Tapia- Menchavez of Toledo City Regional Trial Court Branch 59 after Tan filed a large-scale estafa case against them.

Tan offered through his lawyer Francisco Amit Jr., a P1 million reward to anyone who could provide the location of the culprits who, Tan said, had defrauded him of almost P200 million.

Tan claimed he and the other victims were invited by Go and the Baltonados to invest in them in exchange for at least an eight percent return on their money.

Go reportedly issued checks to the Baltonado couple, who would use these to get investors, but when the victims went to encash them, the checks bounced due to insufficient funds or closed accounts.

Baltonados speak out

In a petition filed by the Baltonado couple for the financial rehabilitation of five companies the couple owns and controls, before RTC Branch 47 in Ormoc City in late 2022, the couple said some of the loans from these creditors were made through the intercession of Go-Chu, who acted as their intermediary.

Chu is Go’s married name.

The petition for rehabilitation involved L.M. Baltonado Construction Inc. (LMBC), L.M. Baltonado Sand and Gravel Supply, Renzo Sef Farm, RSB Concrete Products and J.S. Baltonado Sand and Gravel Supply.

LMBC is a contractor that works on government projects. To expand their businesses, the Baltonados said they took out bank and equipment loans to cater to the Department of Public Works and Highways’ contracts, which accounted for 90 percent of their revenue.

But in 2019, around P300 million worth of projects that the couple had successfully bid for were put on hold, with the notices of award released only 10 months later. Then the Covid-19 pandemic hit.

High interest rates

To survive these twin hits, the couple resorted to private lenders who charged high interest rates of four to 17 percent monthly. And as of the date of the petition, the couple said they had already paid P792 million to loan brokers or the middlemen between the couple and the private lenders.

In their petition, the couple listed 71 individuals and entities as private lenders who, they said, had lent them a total of P1.089 billion (loan principal).

According to the table of payments included in the petition, the Baltonados had already paid back to some of the private lenders more than their principal, while other lenders had not received any payments at all.

The table showed that the biggest lender was Tan (P293 million), followed by other lenders who lent P89.3 million, P58 million, P55 million and P44.5 million. The smallest loan was for P400,000.

Of the 71 private lenders, 29 were listed in the Baltonado couple’s petition as private lenders under the Michelle Go-Chu account. They accounted for P790.6 million of the loan principal.

The couple said loans from these creditors were made through the intercession of Go.

“The transaction would start by Michelle issuing a check in the name of LM Baltonado Construction or Lorenzo Baltonado Jr., the purpose of which is to fund interest due Michelle Go-Chu. All releases although in our name would be deposited to Michelle’s bank account, almost always the full amount received,” the couple said in their petition.

Another scheme they had was those without issued checks, where the transactions would start with Michelle introducing a name without the couple meeting the individual personally. Michelle would tell Jerlyn that she had a friend or relative, or one of her connections that could lend funds.

They said Go would then relay the details of the transaction’s details and conditions, like the term and interest rate, to Jerlyn. Go would be the one to collect payments.

The couple also said Go did not give an accounting on the matter despite their repeated requests.

The couple stated that they had deposited to the bank account of Michelle Go-Chu over P3.1 billion, all evidenced by receipts and deposit slips.

For Tan’s part, he said they issued a total of 30 checks amounting to nearly P200 million to pay him, which he said all bounced.

The couple also claimed to have returned P60 million to Tan, but Tan said he received none of this.

Tan expects more victims to show up, saying some had already built cases against the suspects since last week.

“Pagkagawas aning warrant, daghan kaayo nag message nako nga mga victims nagpasalamat, halos tanan taga Ormoc. Murag duha ra mi taga Cebu. We expect more victims to come out,” said Tan.

(After the arrest warrant came out, so many victims messaged me to thank me, almost all from Ormoc. It seems that there are only two of us victims who are from Cebu.)

Needs rehab

In their petition for financial rehabilitation, the Baltonados sought a waiver of penalties, surcharges and interest for the unpaid penalties and surcharges for their loans; the lowering of interest rates “to a legally acceptable rate, especially for the private lenders”; and the non-seizure of their vital assets.

They expressed optimism that if the rehabilitation plan is approved, the operation of their business will continue, enabling them to repay their creditors.

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