Ex-PDIC head convicted of graft, estafa for using bank funds for personal travel

A former president of the Philippine Deposit Insurance Corp. (PDIC) was found guilty of graft and estafa for making false representations in his travel expenses when he was chairman of the Development Bank of the Philippines (DBP) in 2004.

The anti-graft court convicted Vitaliano Nañagas II of one count of violation of Section 3 (i) of the Anti-Graft and Corrupt Practices Act and two counts of estafa under Paragraph 2, Article 315 of the Revised Penal Code.

The court convicted him of graft when he was then chairman of the DBP Board of Directors and had a personal interest for material gain in the Board’s approval of his foreign travel to the US from May 15, 2004 to June 11. 2004.

Nañagas in his official business actually attended personal matters from May 22, 2004 to June 8, 2004 and was granted with the usual bank privileges and allowances.

“Clearly, the accused was directly interested in the approval of his travel for personal gain since with the said approval, he was able to attend to personal matters without using his own private resources,” the court said.

The court also convicted Nañagas of committing estafa, or the criminal offense of false representations, in his reimbursement of travel expenses.

Nañagas submitted to the DBP corporate secretary three requests for reimbursements of expenses during his official travel.

Of the P492,259.93 expenses requested to be reimbursed, at least P310,665.73 were spent for personal matters from May 22, 2004 to June 8, 2004.

Some of the items purchased during the period were lingerie, briefs and jersey shorts which Nañagas said were corporate gifts for clients and officers of foreign and local financial institutions.

The court said the gifts seemed more as personal items than corporate gifts.

Also, at least P66,374.28 worth of receipts were issued in the Philippines during the period Nañagas was abroad for personal matters.

While Nañagas claimed the expenses in the country were incurred by his representatives, the court said Nañagas failed to furnish proof of these meetings and to present to court these representatives.

It was also Nañagas himself, not the supposed representatives, who requested the reimbursement of these expenses incurred in the country while he was abroad.

The court cited a DBP board resolution which cited the following as valid reimbursable expenses: traveling expenses, plane fare, meals, hotel expenses, baggage fees, airport fees, toll fees, and other fees as approved by the board.

But “the requests for reimbursement include the reimbursement of expenses which were incurred while the accused was attending to personal matters in the USA and expenses incurred in the Philippines when he was on travel,” the court said.

“In other words, the accused included the expenses which he did not incur in the discharge of his official functions,” the court added.

Because of the misrepresentation in reimbursement, the government through the DBP suffered damages worth P66,374.28 and P310,665.73, the court said.

The court found Nañagas guilty of graft and sentenced him to 6-10 year imprisonment with a perpetual disqualification for public office.

The court also found him guilty for two counts of estafa and sentenced him to 4-12 years in prison for the first count and 4-14 years in prison for the second count.

The court also ordered him to indemnify the government the amount of P66,374.28 and P310,665.73.