Seares: Numbers in Subangdaku Rural Bank case cry fraud: P2.6 billion lost in 6,051 fictitious loans over 4 years. MTC convicts Lapu-Lapu City former mayor, ex-congresswoman Paz Radaza, 18 others.

THE collapse of the Rural Bank of Subangdaku Inc. (RSBI), made public when it declared a bank holiday 15 years ago, in early 2009, grabbed attention more than other rural bank failures in Cebu did, for two reasons:

[] Leading the accused suspects was Paz Radaza, former three-term mayor (2010-2019) and ex-congresswoman (2019-2022) of Lapu-Lapu City;

[] The amount involved was a whooping P2.6 billion and the victims were hundreds of middle-class clients, mostly retired workers and struggling wage-earners whose savings were wiped out by the fraud.

Last Monday, July 1, Justice Secretary Jesus Crispin Remulla announced the June 7, 2024 ruling of the Municipal Trial Court in Cities (MTCC) Branch 2, which reportedly convicted Radaza, former president of RSBI, and 18 of its past employees for 34 counts of falsification of public and commercial documents to produce fake loans totaling P2.6 billion.

"STEALING FROM EVERY FILIPINO." Secretary Remulla, stressing the importance of the case, said that to defraud the banking and financial institutions is "far worse than stealing from every Filipino, taking away their dreams, future and very own lives."

The conviction secured by DOJ, Remulla said, "demonstrates our firm resolve to go after those who defy our laws to the prejudice of our institutions and the general public."

Convicted were Paz Radaza and Julius Elluran, president and loans manager, respectively, when the transactions were made, along with 17 co-accused, namely: Rosana Ybanez, Jocelyn Oville, Jofelyn Vallejo, Eusobio Villaber Jr., Roel Wenceslao Jr., Patrick Doon Quitor, Vicente Capuyan Laurito, Raquel Milagros Paca, Agnes Idala, Rose Aileen Baldeo, Albert Hinos, Maribel Morano, Reineir Echavez, Honeylet Pacul, Phoebe Ygot, Resty Carre Elumbaring Colot, and Reynaldo Tecson.

All the convicted were sentenced (a) to an indeterminate penalty of imprisonment for one year and one day as minimum to three years, six months and 21 days as maximum, and (b) to pay a P3,000 fine with subsidiary imprisonment in case of nonpayment.

The complaint was filed before DOJ by Philippine Deposit Insurance Corp. (PDIC), which investigated after RBSI declared a bank holiday in 2009. Account holders at the time tried to withdraw their savings but could not be paid for lack of funds.

HOW THEY DID IT. The MTCC decision said the bank officers and personnel "made it appear that certain individuals obtained loans from RSBI when in truth and in fact they never did, or participated" in the loan processing. The loans were faked.

Prosecutors, the court said, "sufficiently established the participation and probable guilt of all the accused in the fabrication of documents." The accused and their evidence "failed to persuade the court of their innocence..."

"The chain of events surrounding the involvement of all the accused (was) all supported by tangible proof," DOJ said.

News about the conviction of Radaza et al. has been reported first in Manila-based news media such as Manila Bulletin, Manila Standard, Philstar and Politiko Visayas. The announcement of the court ruling was made by the justice secretary whose office in Manila released the story.

WHAT REPORTS DON'T SPECIFY is whether Paz Radaza and Julius Elluran were meted the same penalty as the 16 other accused. Their participation in the crime was obviously not of the same magnitude.

When Radaza refused on September 23, 2015 to enter a plea of not guilty -- the Mandaue Regional Trial Court judge, a news report said, did it for her -- businessman Efrain T. Pelaez Jr., a critic who ran against her for mayor and lost twice, wondered then why Radaza was not charged with the bigger crime of "syndicated estafa." Radaza on July 31, 2014 told media, "I am confident I will be able to overcome those painful episodes in my private life."

The argument for a plunder charge on the rural bank fraud was that the amount involved was huge and Radaza's and bank officials' participation was not the same as that of their co-accused small-time bank employees. She had leaned on the claim that the rural bank scandal, along with the Girl Scouts-pork barrel mess, did not relate her work as mayor or congresswoman.

ROLE IN THE BOGUS LOANS. Paz Radaza and 11 other bank directors and officers were charged in 2014 with violating rules of the General Banking Law. PDIC filed the criminal complaint with DOJ also in 2014.

The criminal complaint before DOJ charged Radaza and then loans manager Julius Elluran with creating from 2004 to 2008 about 6,051 fake loans amounting to almost P2.6 billion. The fictitious loans comprised 97 percent of the total volume of loans released by the bank in that four-year period.

To be sure, the two bank officers did a lot more than the ordinary bank employees who had a hand in the processing of the bogus loans.

GETTING BACK THE MONEY. Obviously, the victims didn't get the full amount from insurance to cover the savings they lost. Some P2.6 billion was stolen. Would they ever be retrieved from the people who have pocketed it?

A fine of P3,000 each from the accused? And a one-year-to-three-year jail sentence in the far future, should the conviction finally become final and executory? A slap in the wrist, in exchange for almost P3 billion.

WHEELS OF JUSTICE move slowly. It took 15 years for PDIC, Department of Justice, and the judiciary to reach the stage of a trial court decision. How much longer if the accused, especially the moneyed and powerful, would appeal the ruling?


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