Negros rural bank closed; 2 Jade Bank owners convicted of estafa

The Monetary Board, the policy-making body of Bangko Sentral ng Pilipinas, placed another Negros Oriental-based rural bank under the custody of Philippine Deposit Insurance Corp. on March 3 due to unhealthy financial condition, the fourth bank closed this year.

Rural Bank of Basay (Negros Oriental) Inc. is a single-unit bank located along Perdices Street in Dumaguete City.

“Notice is hereby given that the Monetary Board, in its Resolution No. 370.A dated March 3, 2016, decided to prohibit the Rural Bank of Basay (Negros Oriental) Inc. from doing business in the Philippines and to place its assets and affairs under receivership pursuant to Section 30 of Republic Act No. 7653 [The New Central Bank Act)],” Bangko Sentral said in a circular posted on its Web site.

“The Philippine Deposit Insurance Corp. has been designated as receiver of the aforementioned rural bank,” it said.

Latest available records showed that Rural Bank of Basay as of Dec. 31, 2015 had 83 accounts with total deposit liabilities of P135,117.88, all of which are insured.

The board earlier closed down three rural banks based in the provinces due to unsound financial status. These were Rural Bank of Villaviciosa (Abra) Inc. on Jan. 7, Cebu-based Lapu-Lapu Rural Bank Inc. on Jan. 28 and Rural Bank of Bayawan, also in Negros Oriental, on Feb. 24.

The Court of Appeals, meanwhile, affirmed the earlier conviction of two bank owners for the crime of estafa, Bangko Sentral ng Pilipinas said Tuesday.

The appellate court upheld the decision of the Regional Trial Court-Manila Branch 15 for convicting two bank owners for the crime of estafa for authorizing payments to a fictitious security agency and depositing such proceeds to their bank accounts.

The appellate court sentenced Luis Co and his son, Alvin Milton Co, the former president and assistant vice president, respectively, of Jade Progressive Savings and Mortgage Bank (Jade Bank), to suffer imprisonment of four years and two months to 20 years.

The appellate court also affirmed, in a decision on Dec. 22, 2015, the trial court’s order for the two bank owners to indemnify Jade Bank, its depositors and creditors and Bangko Sentral ng Pilipinas the sum of P3,032,909.00, plus legal interest from the filing of the complaint until fully paid, and costs.

Bangko Sentral, during its investigation, uncovered payments authorized by Luis Co and Alvin Milton Co for P3,032,909.00 supposedly for services rendered by a fictitious security agency. The former accountant of the bank testified in court that she witnessed accused Luis and Alvin Co open the bank accounts where the checks were deposited.

“The appellate court found that Luis and Alvin Co’s contentions cannot stand against the overwhelming evidence of the prosecution indicating a joint criminal design between them. That is, both Luis and Alvin Co conspired to facilitate the unlawful release of Jade Bank’s funds,” the bank regulator said.

Topics: Monetary Board , Bangko Sentral ng Pilipinas , Rural Bank of Basay (Negros Oriental) Inc. , Jade Bank , estafa
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