Court of Appeals lifts freeze order on 9 Legacy bank accounts

MANILA, Philippines – The Court of Appeals (CA) has lifted the freeze order on nine bank accounts of Legacy Consolidated Plans Inc. that were cleared by the Anti-Money Laundering Council (AMLC) from the list of assets of Mayor Celso de los Angeles Jr.

In a six-page resolution, the former special third division of the appellate court granted the motion of AMLC to lift the freeze order on seven trust accounts containing over P200 million and two others with some $580,000 in Land Bank of the Philippines and Metropolitan Bank and Trust Co. (Metrobank).

The order was issued after the AMLC found that all the nine bank accounts cover trust fund assets not involved in unlawful activities or money laundering offenses.

The council explained to the CA that the trust assets were being held by the banks “for the plan holders” and that “any withdrawal from said trust accounts should be in accordance with Security and Exchange Commission’s pre-need rules.”

The appellate court upheld the ruling penned by Associate Justice Rosalinda Asuncion-Vicente and promulgated it last Wednesday.

Associate Justices Martin Villarama and Ramon Garcia concurred in the decision.

Covered by the resolution are Land Bank trust account numbers 14-213, 14-214, 14-215, 14-215, 14-216, 14-216 and Metrobank trust account numbers 11010000403, 11010000503 and 1101001601.

Last April 13, the CA division extended its freeze order on all 1,177 bank accounts supposedly used by the Legacy Group of Companies of De los Angeles in their alleged schemes that had victimized thousands of investors and pre-need plan holders.

The CA gave the AMLC 75 more days, starting April 17, to look into all bank accounts of Legacy Group, citing “strong public interest involved in the case.”

The Department of Justice is investigating sets of complaints against Legacy and De los Angeles, his relatives and other officials of the troubled Legacy Group who allegedly siphoned off millions of pesos from Legacy plan holders and depositors.

The charges were filed by the Bangko Sentral ng Pilipinas, the Securities and Exchange Commission, the Philippine Deposit Insurance Corp., private investors and other private individuals.

Complainants earlier described the scheme as “rob-Juan-to-pay-Pedro” and likened it to the scheme of infamous American innovator Charles Ponzi, who duped thousands of New England residents into investing in a postage stamp speculation scheme in the 1920s.

The Legacy Group’s shuttered pre-need firms have P1.1-billion worth of unpaid obligations to about 50,000 plan holders.

Additionally, 13 of the Legacy Group’s rural banks voluntarily closed in 2008 and were placed under receivership or liquidation.

The Bangko Sentral stated that these banks have “insufficient assets to cover their liabilities, suffer from severe liquidity problems, and perform unsafe and unsound banking practices.”

If lenders like Legacy’s rural banks are placed under receivership, the banks’ assets will be preserved so that these can be sold to settle debts to depositors.

De los Angeles, mayor of Sto. Domingo town in Albay, has repeatedly denied orchestrating fraudulent schemes that allegedly led to Legacy’s collapse.