Mike Arroyo cousin arrested for misuse of bank’s P230M
MANILA, Philippines–A cousin of former First Gentleman Jose Miguel Arroyo, who has an outstanding warrant for syndicated estafa, was arrested at his home in the posh subdivision in Ayala Alabang in Muntinlupa City on Tuesday.
Arrested was Benito Ramon “Bomboy” Araneta, one of those accused of misappropriating nearly P230 million from a bank that went bankrupt in 2011, the Philippine National Police announced on Wednesday.
Araneta is facing 15 counts of estafa for allegedly “colluding” with former LBC Development Bank president Ma. Eliza Berenguer to defraud the bank.
The case, earlier lodged in the Department of Justice (DOJ) by Philippine Deposit Insurance Corp. (PDIC) on behalf of bank depositors, is being heard at the Makati Regional Trial Court Branch 143.
Presiding Judge Maximo M. de Leon issued a warrant for Araneta’s arrest on Aug. 1.
Araneta was arrested at his home on Acacia Avenue in Ayala Alabang at 4:10 p.m. on Aug. 12.
Article continues after this advertisementHe did not resist the arrest made by a joint team from the PNP Intelligence Group-National Capital Region and the Muntinlupa City police, the PNP spokesman, Chief Supt. Reuben Theodore Sindac, said at a press briefing.
Article continues after this advertisementA statement, posted in 2013 on the PDIC website, said the PDIC complaint in the DOJ accused Berenguer of directly instructing the principal officers of LBC Bank to divert funds of the bank to deposit accounts owned by Araneta and five other borrowers from October 2006 to January 2008.
Never paid loan
“Araneta was able to borrow money totaling P229,469,505.10. In collusion with Berenguer, he was able to appropriate the money for his personal use. During the stint of Berenguer as president, it was shown that Araneta already paid the loan, but in fact, he never returned the money he borrowed from LBC Bank,” Sindac said, quoting the results of the PDIC probe when it took over the bank upon its closure on Sept. 9, 2011.
Sindac said the “unsafe and unsound banking practices resulted in damage [to] an undeterminable number of depositors and [to] their hard-earned money.”
Araneta is now detained with the PNP Intelligence Group.
Senior Supt. Allan Nobleza, Muntinlupa City’s chief of police, said the court did not recommend bail for Araneta.
Nobleza said members of the PNP Intelligence Group of the National Capital Region spearheaded the operation while the city police acted as support.
“(The IG) coordinated with us when the arrest was conducted,” he explained.
He said no firearms were found inside the house when police served the warrant.
Roselyn Sato, who is in charge of criminal cases in Branch 143, said that as of 4:03 p.m. on Wednesday, the court had yet to receive the report that Araneta had been arrested.
“We’ve been hearing things (about his arrest) but we haven’t received the report that says who arrested him and other details yet,” she said over the phone.
She said once the report is submitted by the arresting authorities, a commitment order specifying where Araneta should be detained would be issued by the court.
She did not, however, give a period within which the commitment order will have been issued. “That depends on the judge. We only give the documents (to be acted on),” she said.
In March 2013, state-run PDIC said an immigration lookout bulletin order had been ordered by the DOJ against Berenguer, Araneta and four other borrowers.
The order was issued in response to the P229.5-million syndicated estafa case filed by PDIC against Berenguer, Araneta, Ma. Lourdes Senn, Ernesto G. Barrios, Charito S. Zambales and Francisco A. Climent for misappropriating the funds of LBC Bank, which was placed under receivership in 2011.
According to the complaint, from October 2006 to January 2008, Berenguer directly instructed the principal officers of the bank to divert funds of the bank to the deposit accounts owned by the borrowers included in the case.
In September 2011, PDIC said that it took over the assets and liabilities of LBC Bank, a unit of LBC Group, after the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) determined that the institution was plagued by liquidity problems.
Huge cash advances
LBC Bank, with head office on JP Rizal Street in Makati City, had 19 branches nationwide.
As of end-June 2011, total deposits placed with the bank amounted to P6.09 billion, of which P3.73 billion was covered by insurance, PDIC said, citing bank records. It added that 99.4 percent of the 321,516 accounts were fully covered by deposit insurance.
The BSP later said that LBC Bank had been making huge cash advances to its sister company, remittance firm LBC Express, which was why the thrift bank eventually became insolvent.
Based on results of the central bank’s investigation, LBC Bank had been extending cash advances to LBC Express so that the latter could facilitate remittances to clients much faster. Some of the cash advances remained unpaid, which added to the bank’s financial burden, said BSP Deputy Governor Nestor Espenilla Jr.
Before its closure, LBC Bank had been under the Prompt Corrective Action program of the central bank for more than a year partly due to its practice of giving cash advances. LBC Bank was told to stop extending cash advances to LBC Express. However, the thrift bank did not comply.–With a report from Inquirer Research
Sources: Inquirer Archives, pdic.gov.ph
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