2 bank execs convicted of fraud but get off lightly | Inquirer News

2 bank execs convicted of fraud but get off lightly

FORMER executives of the failed Legacy banking group have been convicted of fraud for their role in the group’s P14-billion Ponzi scheme that collapsed in 2008, the Bangko Sentral ng Pilipinas (BSP) said Tuesday.

The convictions, however, represent but a small victory for the many people who lost money in the scam, given the almost negligible punishment meted out by the courts.

Two Legacy executives, Zacarias Carticiano and Jose Girlo Caramat, who were both found guilty of lying in the reports that they submitted to state regulators, were ordered to pay measly fines of P100,000 each.


Carticiano and Caramat were president and controller, respectively, of the Rural Bank of San Jose, a member of the Legacy banking group, which was shuttered in 2008.


The two were last September found guilty of falsifying documents by the Metropolitan Trial Court, in violation of the New Central Bank Act, the BSP said in a statement.

“The convictions of Carticiano and Caramat are the first convictions obtained thus far in a wave of cases filed in 2009 by the BSP against multiple banks connected with the Legacy Group of the late Celso de los Angeles,” the BSP said.

“Officers of these Legacy banks were charged with using falsified documents and fictitious loans to siphon money from the banks,” the BSP added.

The Rural Bank of San Jose was part of a syndicate of more than a dozen small banks that used “double-your-money” schemes to attract clients. The scam unraveled in 2008 when the banks failed to service customers’ withdrawals, indicating that the companies had run out of money to keep up appearances.

Various estafa cases have been filed against Legacy executives, including the group’s owner Celso de los Angeles, who died of cancer in 2012.

The Legacy banking group’s collapse cost the Philippine Deposit Insurance Corp. P14 billion in payouts of claims for deposits insured by the state.


Based on the BSP’s investigations, the Rural Bank of San Jose was found to have lied about the value of several of its assets, particularly five parcels of land worth P3.7 million. Carticiano and Caramat claimed in official documents that the value of the land was P413 million.

The lie was done to cover up the bank’s true financial condition, the court ruled.

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“The value was based on an appraisal of the properties done by Valueworld Appraisers, Inc.,” the BSP said.

TAGS: Crime, Nation, News, Ponzi scam

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