G.R. Nos.
209655-60, January 14, 2015
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. PALMY
TIBAYAN AND RICO Z. PUERTO,Accused-Appellants.
DECISION
PERLAS-BERNABE, J.:
Assailed in this ordinary appeal1 filed by accused-appellants
Palmy Tibayan (Tibayan) and Rico Z. Puerto (Puerto) (accusedappellants) is the Decision2 dated June 28, 2013 of the Court of
Appeals (CA) in CA-G.R. CR Nos. 33063, 33562, 33660, 33660,
33669, 33939, and 34398 which modified the Decisions dated
December 4, 2009,3 June 24, 2010,4 August 2, 2010,5August 5,
2010,6 January 21, 2011,7 and August 18, 20118 of the
Regional Trial Court of Las Pias City, Branch 198 (RTC)and
convicted accused-appellants of the crime of
Syndicated Estafa, defined and penalized under Item 2 (a),
Paragraph 4, Article 315 of the Revised Penal Code (RPC) in
relation to Presidential Decree No. (PD) 1689. 9
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The Facts
Tibayan Group Investment Company, Inc. (TGICI) is is an
open-end investment company registered with the Securities
and Exchange Commission (SEC) on September 21,
2001.10 Sometime in 2002, the SEC conducted an investigation
on TGICI and its subsidiaries.In the course thereof, it
discovered that TGICI was selling securities to the public
without a registration statement in violation of Republic Act No.
8799, otherwise known as The Securities Regulation Code,
and that TGICI submitted a fraudulent Treasurers Affidavit
before the SEC. Resultantly, on October 21, 2003, the SEC
revoked TGICIs corporate registration for being fraudulently
procured.11
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The foregoing led to the filing of multiple criminal cases 12 for
Syndicated Estafa against the incorporators and directors of
TGICI,13 namely, Jesus Tibayan, Ezekiel D. Martinez, Liborio E.
Elacio, Jimmy C. Catigan, Nelda B. Baran, and herein accusedappellants.14 Consequently, warrants of arrest were issued
against all of them; however, only accused-appellants were
arrested, while the others remained at large.15
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According to the prosecution, private complainants Hector H.
Alvarez, Milagros Alvarez, Clarita P. Gacayan, Irma T. Ador,
Emelyn Gomez, Yolanda Zimmer, Nonito Garlan, Judy C. Rillon,
Leonida D. Jarina, Reynaldo A. Dacon, Cristina Dela Pea, and
Rodney E. Villareal16 (private complainants) were enticed to
invest in TGICI due to the offer of high interest rates, as well as
the assurance that they will recover their investments. After
giving their money to TGICI, private complainants received a
Certificate of Share and post-dated checks, representing the
amount of the principal investment and the monthly interest
earnings, respectively.17 Upon encashment, the checks were
dishonored,as the account was already closed, prompting
private complainants to bring the bounced checks to the TGICI
office to demand payment. At the office, the TGICI employees
took the said checks, gave private complainants
acknowledgement receipts, and reassured that their
investments, as well as the interests, would be paid. However,
the TGICI office closed down without private complainants
having been paid and, thus, they were constrained to file
criminal complaints against the incorporators and directors of
TGICI.18
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In their defense, accused-appellants denied having conspired
with the other TGICI incorporators to defraud private
complainants. Particularly, Puerto claimed that his signature in
the Articles of Incorporation of TGICI was forged and that since
January 2002,he was no longer a director of TGICI. For her
part, Tibayan also claimed that her signature in the TGICIs
Articles of Incorporation was a forgery, as she was neither an
incorporator nor a director of TGICI.19
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The RTC Rulings
On various dates, the RTC issued six (6) separate decisions
convicting Tibayan of 13 counts and Puerto of 11 counts
of Estafa under Item 2 (a), Paragraph 4, Article 315 of the RPC
in relation to PD 1689, to wit: (a) in a Joint Decision 20 dated
December 4, 2009, the RTC found accused-appellants guilty
beyond reasonable doubt of three (3) counts
of Estafa, sentencing them to suffer the penalty of
imprisonment for a period of 20 years of reclusion temporal for
each count, and ordering them to pay the amounts of
P1,500,000.00, to Hector H. Alvarez, and P119,405.23 and
P800,000.00 to Milagros Alvarez;21; (b) in a Joint
Decision22 dated June 24, 2010, the RTC acquitted Puerto of all
the charges, but found Tibayan guilty beyond reasonable doubt
of two (2) counts of Estafa, sentencing her to suffer the penalty
of imprisonment for a period of 20 years of reclusion
temporal for each count, and ordering her to pay the amounts
of P1,300,000.00 and US$12,000.00 to Clarita P. Gacayan and
P500,000.00 to Irma T. Ador;23; (c) in a Joint Decision24 dated
August 2, 2010, the accused-appellants were found guilty
beyond reasonable doubt of two (2) counts of Estafa, and were
sentenced to suffer the penalty of imprisonment for a period of
20 years of reclusion temporal for each count, and ordered to
pay the amounts of P1,000,000.00 to Yolanda Zimmer and
P556,376.00 to Nonito Garlan;25;(d) in a Joint Decision26 dated
August 5, 2010, the RTC found the accused-appellants guilty
beyond reasonable doubt of one (1) count of Estafa, sentencing
them to suffer the penalty of imprisonment for a period of 20
years of reclusion temporal, and ordering them to pay Emelyn
Gomez the amount of P250,000.00;27; (e) in a Decision28 dated
January 21, 2011, accused-appellants were found guilty
beyond reasonable doubt of one (1) count of Estafa each, and
were sentenced to suffer the penalty of imprisonment for a
period of 20 years of reclusion temporal, and ordered to pay
Judy C. Rillon the amount of P118,000.00;29; and (f) in a Joint
Decision30 dated August 18, 2011, accused-appellants were
each convicted of four (4) counts of Estafa, and meted different
penalties per count, as follows: (i) for the first count, they were
sentenced to suffer the penalty of imprisonment for a period of
four (4) years and two (2) months of prision
correcional medium, as minimum, to fifteen (15) years
of reclusion temporal medium, as maximum, and to pay
Reynaldo A. Dacon the amount of P100,000.00; to;(ii) for the
second count, they were sentenced to suffer the penalty of
imprisonment for a period of ten (10) years of prision
mayor medium, as minimum, to twenty (20) years of reclusion
temporal medium, as maximum, and to pay Leonida D. Jarina
the amount of P200,000.00; (iii) for the third count, they were
sentenced to suffer the penalty of imprisonment for a period of
ten (10) years of prision mayormedium, as minimum, to
twenty (20) years of reclusion temporal medium, as maximum,
and to pay Cristina Dela Pea the amount of P250,000.00; and
(iv) for the last count, they were sentenced to suffer the
penalty of imprisonment for a period of four (4) years and two
(2) months of prision correcional medium, as minimum, to
fifteen (15) years of reclusion temporal medium, as maximum,
and to pay Rodney E. Villareal the amount of P100,000.00. 31.
In the aforesaid decisions, the RTC did not lend credence to
accused-appellants denials in light of the positive testimonies
of the private complainants that they invested their money in
TGICI because of the assurances from accused-appellants and
the other directors/incorporators of TGICI that their
investments would yield very profitable returns. In this relation,
the RTC found that accused-appellants conspired with the other
directors/incorporators of TGICI in misrepresenting the
company as a legitimate corporation duly registered to operate
as a mutual fund, to the detriment of the private
complainants.32 However, the RTC convicted accused-appellants
of simple Estafa only, as the prosecution failed to allege in the
informations that accused-appellants and the other directors/
incorporators formed a syndicate with the intention of
defrauding the public, or it failed to adduce documentary
evidence substantiating its claims that the accused-appellants
committed SyndicatedEstafa.33
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Aggrieved, accused-appellants separately appealed the
foregoing RTC Decisions to the CA, docketed as CA-G.R. CR
Nos. 33063, 33562, 336609, 336690, 33939, and 34398.
Thereafter, the CA issued a Resolution34 dated February 19,
2013 ordering the consolidation of accused-appellants
appeals.
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The CA Ruling
In a Decision35 dated June 28, 2013, the CA modified accusedappellants conviction to that of Syndicated Estafa, and
accordingly, increased their respective penalties to life
imprisonment for each count.36 The CA also increased the
amount of actual damages awarded to private complainant
Clarita P. Gacayan from P1,300,000.00 to P1,530,625.90, apart
from the award of US$12,000.00.37
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It held that TGICI and its subsidiaries were engaged in a Ponzi
scheme which relied on subsequent investors to pay its earlier
investors and is what PD 1689 precisely aims to punish.
Inevitably, TGICI could no longer hoodwink new investors that
led to its collapse.38Thus, the CA concluded that as
incorporators/directors of TGICI, accused-appellants and their
cohorts conspired in making TGICI a vehicle for the
perpetuation of fraud against the unsuspecting public.. As such,
they cannot hide behind the corporate veil and must be
personally and criminally liable for their acts.39 The CA then
concluded that since the TGICI incorporators/directors
comprised more than five (5) persons, accused-appellants
criminal liability should be upgraded to that of
Syndicated Estafa, and their respective penalties increased
accordingly.40
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Undaunted, accused-appellants filed the instant appeal.
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The Issue Before the Court
The primordial issue for the Courts resolution is whether or not
accused-appellants are guilty beyond reasonable doubt of the
crime of Syndicated Estafa defined and penalized under Item 2
(a), Paragraph 4, Article 315 of the RPC in relation to PD 1689.
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The Courts Ruling
The Court sustains the convictions of accused-appellants.
Item 2 (a), Paragraph 4, Article 315 of the RPC provides:
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Art. 315. Swindling (estafa). Any person who shall defraud
another by any means mentioned herein below shall be
punished by:
xxxx
2. By means of any of the following false pretenses or
fraudulent acts executed prior to or simultaneously with
the commission of the fraud:
(a) By using a fictitious name, or falsely pretending to
possess power, influence, qualifications, property, credit,
agency, business, or imaginary transactions; or by means
of other similar deceits.
xxxx
The elements of Estafa by means of deceit under this provision
are the following: (a) that there must be a false pretense or
fraudulent representation as to his power, influence,
qualifications, property, credit, agency, business or imaginary
transactions; (b) that such false pretense or fraudulent
representation was made or executed prior to or
simultaneously with the commission of the fraud; (c) that the
offended party relied on the false pretense, fraudulent act, or
fraudulent means and was induced to part with his money or
property; and (d) that, as a result thereof, the offended party
suffered damage.41
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In relation thereto, Section 1 of PD 1689 defines
Syndicated Estafa as follows:
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Section 1. Any person or persons who shall commit estafa or
other forms of swindling as defined in Articles 315 and 316 of
the Revised Penal Code, as amended, shall be punished by life
imprisonment to death if the swindling (estafa) is committed by
a syndicate consisting of five or more persons formed with the
intention of carrying out the unlawful or illegal act, transaction,
enterprise or scheme, and the defraudation results in the
misappropriation of moneys contributed by stockholders, or
members of rural banks, cooperatives, samahang nayon(s),
or farmers associations, or funds solicited by
corporations/associations from the general public.
Thus, the elements of Syndicated Estafa are: (a) Estafa or
other forms of swindling, as defined in Articles 315 and 316 of
the RPC,, is committed; (b) the Estafa or swindling is
committed by a syndicate of five (5) or more persons; and (c)
defraudation results in the misappropriation of moneys
contributed by stockholders, or members of rural banks,
cooperative, samahang nayon(s), or farmers associations, or
of funds solicited by corporations/associations from the general
public.42
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In this case, a judicious review of the records reveals
TGICIs modus operandi of inducing the public to invest in it on
the undertaking that their investment would be returned with a
very high monthly interest rate ranging from three to five and a
half percent (3%-5.5%).43 Under such lucrative promise, the
investing public are enticed to infuse funds into TGICI.
However, as the directors/incorporators of TGICI knew from the
start that TGICI is operating without any paid-up capital and
has no clear trade by which it can pay the assured profits to its
investors,44 they cannot comply with their guarantee and had to
simply abscond with their investors money. Thus, the CA
correctly held that accused-appellants, along with the other
accused who are still at large, used TGICI to engage in a Ponzi
scheme, resulting in the defraudation of the TGICI investors.
To be sure, a Ponzi scheme is a type of investment fraud that
involves the payment of purported returns to existing investors
from funds contributed by new investors. Its organizers often
solicit new investors by promising to invest funds in
opportunities claimed to generate high returns with little or no
risk. In many Ponzi schemes, the perpetrators focus on
attracting new money to make promised payments to earlierstage investors to create the false appearance that investors
are profiting from a legitimate business.45 It is not an
investment strategy but a gullibility scheme, which works only
as long as there is an ever increasing number of new investors
joining the scheme.46 It is difficult to sustain the scheme over a
long period of time because the operator needs an ever larger
pool of later investors to continue paying the promised profits
to early investors. The idea behind this type of swindle is that
the con-man collects his money from his second or third
round of investors and then absconds before anyone else
shows up to collect. Necessarily, Ponzi schemes only last
weeks, or months at the most.47
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In this light, it is clearthat all the elements of
Syndicated Estafa, committed through a Ponzi scheme,are
present in this case, considering that: (a) the
incorporators/directors of TGICI comprising more than five (5)
people, including herein accused-appellants,, made false
pretenses and representations to the investing public in this
case,the private complainants regarding a supposed lucrative
investment opportunity with TGICI in order to solicit money
from them; (b) the said false pretenses and representations
were made prior to or simultaneous with the commission of
fraud; (c) relying on the same, private complainants invested
their hard earned money into TGICI; and (d) the
incorporators/directors of TGICI ended up running away with
the private complainants investments, obviously to the latters
prejudice.
Corollary thereto, the CA correctly upgraded accusedappellants conviction from simple Estafa to
Syndicated Estafa. In a criminal case, an appeal throws the
whole case wide open for review. Issues whether raised or not
by the parties may be resolved by the appellate court.48 Hence,
accused-appellants appeal conferred upon the appellate court
full jurisdiction and rendered it competent to examine the
records, revise the judgment appealed from, increase the
penalty, and cite the proper provision of the penal law.49
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WHEREFORE, the appeal is DENIED. The Decision dated June
28, 2013 of the Court of Appeals in CA-G.R. CR Nos. 33063,
33562, 33660, 33669, 33939, and 34398 is
hereby AFFIRMED. Accordingly, accused-appellants Palmy
Tibayan and Rico Z. Puerto are found GUILTY beyond
reasonable doubt of 13 and 11 counts, respectively, of
Syndicated Estafa and are sentenced to suffer the penalty of
life imprisonment for each count. Accused-appellants are
further ordered to pay actual damages to each of the private
complainants in the following amounts: (a) P1,500,000.00 to
Hector H. Alvarez; (b) P119,405.23 and P800,000.00 to
Milagros Alvarez; (c) P1,530,625.90 and US$12,000.00 to
Clarita P. Gacayan; (d) P500,000.00 to Irma T. Ador; (e)
P1,000,000.00 to Yolanda Zimmer; (f) P556,376.00 to
NonitoGarlan; (g) P250,000.00 to Emelyn Gomez; (h)
P118,000.00 to Judy C. Rillon; (i) P100,000.00 to Reynaldo A.
Dacon; (j) P200,000.00 to Leonida D. Jarina; (k) P250,000.00
to CristinaDela Pea; and (l) P100,000.00 to Rodney E.
Villareal.
SO ORDERED.
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