corporation law, Criminal law, Rules of Court

Legacy group of companies, Celso de los Angeles, & discussion on syndicated estafa

Legacy founder and  beneficial owner Celso de los Angeles has resorted to the old trick of answering “i-don’t-remember-i-don’t-recall-i’m-not-aware-i’m-not-sure-and-its-variations” at the on-going Senate hearings today.

Artist not indicated. “Depositors Making a Run on a Bank during a Financial Panic in the 1800. Right-clicked from www.allposters.com, used here for non- commercial  purposes, under the terms of , free service by blog-use of image provided by said site.

Artist not indicated. “Depositors Making a Run on a Bank during a Financial Panic in the 1800. Right-clicked from http://www.allposters.com, used here for non- commercial purposes, under the terms of , free service by blog-use of image provided by said site.

Legacy beneficial owner,  because according to affidavits of certain of his bank and corporate officials disclosed in an ABS-CBN investigative report,  while his name does not appear as president of his banks and pre-need companies, it is upon his instructions that certain money transfers were made, they (the bank and corporate officials) were informed by their superiors that the instructions from Manila were from Celso de los Angeles; he presided over certain meetings where fabricated loan schemes and other transactions were operationalized that resulted in the siphoning  off of  moneys held in trust by his banks and pre-need companies; and the proceeds of the fraudulent schemes with amounts ranging from P300 million to P400 million, landed in the account of a company that he owned/ owns.

“If evidence of any such purpose (“fraudulent, unfair, or illegal purposes”) is present, the courts will ‘pierce the veil of corporate entity’ and disregard the corporate fiction” (Campos, Corporation Law).

Do you know why he is resorting to amnesia?

Amnesia and forgetfulness is the refuge of those who do not want to help government authorities in establishing facts that show criminal intent or by  those who do not want to incriminate themselves but without invoking the right against self-incrimination because the criminal information has not been formally filed.

As everybody knows, criminal intent is shown not by reading the minds of suspects or the accused but by overt acts.

Overt acts in this case can be established by the testimonies of corporate officials who have personal knowledge of meetings and transactions and by documentary evidence.

For the crime of syndicated estafa, only the following elements need to be established by overt acts:

1.the money or funds were “received by the offender in trust or on commission, or for administration, or under any other obligation involving the duty to make delivery of or to return the same.”

What do these mean?

a.”received in trust” means that the holder of the money  received the money for the purpose  agreed upon between the holder and the contributors; the law makes the misapplication of these funds not just a breach of contract but a crime (estafa) because the holder or possessor never owned the funds and never had the right to use the funds as he pleases;  these had been entrusted to him; in other words, the law considers such misapplication in breach of trust as a form of stealing the money; and in fact, it is a form of stealing.

b. or, “received for administration or obligation to return the same”, means  the holder or possessor  by agreement or by law has the obligation to return the money, and it was misapplied and the funds could not be returned to the contributors (the estafa laws then apply).

2.The second element for syndicated estafa is: a conspiracy of five or more persons: This means that  at least five persons came to an agreement to commit the acts; mere agreement and participation in formulating the scheme is enough;

3.The third element is that it was ”formed with the intention of carrying out the unlawful or illegal act, transaction, enterprise or scheme” : This refers to the conspiracy itself, not necessarily to the incorporation of the company or the formation of the entire bank.

In other words, it refers to:  When the participants came to an agreement regarding the scheme or transaction, it was for the intent of siphoning off money.  Although not everybody present in the meeting may have known at first that the purpose was to defraud stockholders, members, and depositors, it is enough that those who thought up the scheme had for their purpose the fraudulent transfer of moneys (in the hundreds of millions in this case).

How do you show that?

Again, by overt acts. Where did the hundreds of millions of pesos actually go?

Did those hundreds of millions of pesos go to sound, arm’s-length investments? Arm’s length means not self-dealing or not invested in your own companies to benefit your own companies and not to make the fund itself earn profits/ interest.

Or did the hundreds of millions of pesos go to personal accounts and expenses of the Legacy owners (1.bank accounts in his name  2.or in the name of his next-of-kin (an old trick) 3.or assignees (an old, tired trick), or to 4.bank accounts in the name of his companies (an old trick)  5.or bank accounts in the name of companies where the controlling interests are held by companies owned by him (another old, tired trick) in a three-tiered, four-tiered, five-layered corporate structure (the number of layers and tiers to hide the beneficial owner depends on the corporate savvy of his lawyers; they could bury the tiers in neck-deep of paperwork or a warehouse-full of paperwork of articles of incorporation and paper minutes of meetings of dozens or hundred of companies that if you were an investigator looking at it in order to “pierce the veil” or untangle the tiers, you might have to divide the work in an army of  lawyers working everyday for months on it), election campaign expenses, floundering businesses, to mansions, yacht, luxury cars, a music video)?

How do you trace where the moneys had gone?

By paper trail as buttressed by testimonies  of bank and corporate officials:  Examples are: signed  money transfers, documents  establishing dates of purchases and signing of contracts, and withdrawals and placements of money, vehicle registration, land titles, etc.

4.The fourth element is: That the  “defraudation results in the misappropriation of money contributed by stockholders, or members of rural banks, cooperative, “samahang nayon(s)”, or farmers association, or of funds solicited by corporations/associations from the general public.”

This means that the “misapplication” or the misappropriation or the fraudulent transfer of money (fraud is shown with overt acts discussed above) were of moneys contributed or entrusted by:

a.stockholders; or

b. members of rural banks; or

c.members of a cooperative; or

d.members of “samahang nayon”; or

e.members of farmers association; or

f. from the general public as funds solicited by the corporations or the association.

Documentary evidence show overt acts because the execution of contracts and the making of purchases are overt acts. They establish criminal intent.  Investigators, prosecutors, and judges do not need to possess mental telepathy to read minds to show criminal intent, they just need to look at the evidence.

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4 thoughts on “Legacy group of companies, Celso de los Angeles, & discussion on syndicated estafa

  1. Pingback: Legacy Group Watch - 3/10/2009 « Legacy Group Watch

  2. Gina Ordonez says:

    To marichu lambino, you had a well-explained write-up, esp on how to track down the evidence and paper trail on Boy de los Angeles’ crime of syndicated estafa, resulting in people losing HUNDREDS OF MILLIONS.

    Can you do the same, i.e., do research and write up on how to track evidence and paper trail of Manny Villar’s crime of siphoning off govt funds for his low cost housing schemes from 1986-1997 resulting in bad mortgages which left the funders SSS, GSIS, and Pag-Ibig almost bankrupt, but due to sovereign guarantee, the govt using the people’s taxes (yours and mine) paid off the developers, where Villar came off with BILLIONS while the poor remain in squatter areas.

  3. than you for writing . facts in the blog post were gathered from news reports; the news reports didn’t run the names of signatories. thank you for dropping by!

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