Tag: Republic Act 7080

Defining Probable Cause in Philippine Plunder Cases: Estrada v. Office of the Ombudsman

The Supreme Court upheld the Ombudsman’s finding of probable cause against Senator Jinggoy Estrada, John Raymund de Asis, and Janet Lim Napoles for plunder and graft, emphasizing the broad discretion afforded to the Ombudsman in prosecuting criminal complaints against public officials. This decision reinforces the principle that a preliminary investigation only requires evidence showing a crime was likely committed, without needing absolute certainty or evidence sufficient for conviction, thus allowing cases to proceed to trial where the accused can fully exercise their rights.

PDAF Scandal Unveiled: Did the Ombudsman Abuse Discretion in Estrada’s Indictment?

This consolidated case examines whether the Ombudsman committed grave abuse of discretion in finding probable cause to indict Senator Jinggoy Ejercito Estrada, John Raymund de Asis, and Janet Lim Napoles for plunder and violation of Section 3(e) of Republic Act No. 3019, related to the misuse of Priority Development Assistance Fund (PDAF). The central legal question revolves around the extent of judicial review permissible over the Ombudsman’s determination of probable cause, balancing the need to combat corruption with protecting individual rights against unfounded accusations.

The Supreme Court’s consistent policy is to maintain non-interference in the Ombudsman’s determination of probable cause, recognizing its broad powers under both the Constitution and Republic Act 6770. The Court acknowledges the Ombudsman’s expertise in assessing evidence and defers to its sound judgment, unless grave abuse of discretion is evident. Grave abuse of discretion implies a capricious and whimsical exercise of judgment tantamount to lack of jurisdiction, which must be so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform the duty enjoined by law.

Probable cause, in this context, is defined as the existence of such facts and circumstances as would excite the belief in a reasonable mind, acting on the facts within the knowledge of the prosecutor, that the person charged was guilty of the crime for which he was prosecuted. It requires evidence showing that more likely than not a crime has been committed and was committed by the suspects, demanding more than bare suspicion but less than evidence which would justify conviction. The elements of the crime charged should be present. The court has stated that “only facts sufficient to support a *prima facie* case against the [accused] are required, not absolute certainty.”

In determining probable cause, the elements of the crime charged should be present, but not definitively established, enough that their presence becomes reasonably apparent. It was further added that:

[O]wing to the nature of preliminary investigations, the “technical rules of evidence should not be applied” in the course of its proceedings, keeping in mind that “the determination of probable cause does not depend on the validity or merits of a party’s accusation or defense or on the admissibility or veracity of testimonies presented.” Thus, in *Estrada v. Ombudsman (Estrada)*, the Court declared that since a preliminary investigation does not finally adjudicate the rights and obligations of parties, “probable cause can be established with hearsay evidence, as long as there is substantial basis for crediting the hearsay.”

The petitioners were charged with plunder and violation of Section 3(e) of RA 3019. Plunder, defined and penalized under Section 2 of RA 7080, as amended, has the following elements:

That the offender is a public officer, who acts by himself or in connivance with members of his family, relatives by affinity or consanguinity, business associates, subordinates or other persons;
That he amasses, accumulates or acquires ill-gotten wealth through a combination or series of overt or criminal acts described in Section 1(d) hereof; and
That the aggregate amount or total value of the ill-gotten wealth amassed, accumulated, or acquired is at least Fifty Million Pesos (P50,000,000.00).

On the other hand, the elements of violation of Section 3(e) of RA 3019 are:

That the accused must be a public officer discharging administrative, judicial, or official functions (or a private individual acting in conspiracy with such public officers);
That he acted with manifest partiality, evident bad faith, or inexcusable negligence; and
That his action caused undue injury to any party, including the government, or gave any private party unwarranted benefits, advantage, or preference in the discharge of his functions.

The Court analyzed the evidence presented by the Ombudsman, including the testimonies of whistleblowers, affidavits, business ledgers, and COA reports. The Court found that the Ombudsman did not abuse its discretion in finding probable cause to indict Estrada, as the elements of the crimes charged were reasonably apparent based on the evidence on record. The Court emphasized that a preliminary investigation is not the occasion for the full and exhaustive display of the prosecution’s evidence; and the presence or absence of the elements of the crime charged is evidentiary in nature and is a matter of defense that may be passed upon only after a full-blown trial on the merits.

The Court also addressed the arguments raised by Justice Velasco in his dissent, specifically regarding the admissibility and credibility of the evidence used by the Ombudsman. The Court reiterated its stance that technical rules on evidence should not be rigidly applied during preliminary investigations, and that probable cause can be established with hearsay evidence, as long as there is substantial basis for crediting the hearsay.

Therefore, the Supreme Court dismissed the petitions, upholding the Ombudsman’s finding of probable cause against all the petitioners. The case will proceed to trial, where the guilt or innocence of the accused will be determined based on the evidence presented.

FAQs

What was the key issue in this case?	Whether the Ombudsman committed grave abuse of discretion in finding probable cause to indict Senator Estrada, de Asis, and Napoles for plunder and graft, and the extent of judicial review over the Ombudsman’s determination.
What is probable cause in this context?	Probable cause exists when facts and circumstances would lead a reasonable person to believe the accused committed the crime, requiring more than suspicion but less than evidence for conviction. It implies probability of guilt determined in a summary manner.
Can hearsay evidence be used to establish probable cause?	Yes, hearsay evidence can be used to establish probable cause during a preliminary investigation as long as there is a substantial basis for crediting the hearsay. It is because the preliminary investigation does not finally adjudicate the rights and obligations of parties.
What is the role of the Ombudsman in prosecuting public officials?	The Ombudsman has broad powers to investigate and prosecute criminal complaints against public officials and government employees. The office is considered the champion of the people and preserver of the integrity of public service.
*What is the res inter alios acta* rule, and does it apply here?**	The res inter alios acta rule states that the rights of a party cannot be prejudiced by the act, declaration, or omission of another. The Supreme Court ruled that technical rules on evidence, including the res inter alios acta rule, should not be rigidly applied in preliminary investigation.
What is plunder, according to Philippine law?	Plunder is committed when a public officer, by himself or in connivance with others, amasses ill-gotten wealth of at least P50 million through a combination or series of illegal acts. These acts include misappropriation, receiving kickbacks, or taking undue advantage of official position.
What is Section 3(e) of RA 3019?	Section 3(e) of RA 3019 prohibits public officers from causing undue injury to any party or giving any private party unwarranted benefits through manifest partiality, evident bad faith, or gross inexcusable negligence. It penalizes corrupt practices by public officers in the performance of their functions.
What was the effect of the Ombudsman’s findings?	The Ombudsman’s finding of probable cause allowed the case to proceed to trial before the Sandiganbayan. The accused is given a chance to defend themselves, and the courts will then proceed to hear the evidence.
What was De Asis’s role in the case?	De Asis was a driver, messenger, and janitor for Napoles and allegedly assisted in the fraudulent processing and releasing of PDAF funds. He was also designated as president/incorporator of a Napoles-controlled NGO.
Who is Janet Lim Napoles in the case?	Napoles is the central figure of the PDAF scandal. She is the alleged mastermind of the operation, facilitating the transfer of PDAF and creating non-governmental organizations for the purpose.

This decision reinforces the considerable deference given to the Ombudsman’s judgment in determining probable cause, underscoring the importance of allowing corruption cases to proceed to trial. It affirms the principle that a preliminary investigation is not a trial, and that technical rules of evidence should not unduly hinder the prosecution’s ability to present its case. Future cases involving public corruption are likely to rely on this ruling as precedent for upholding the Ombudsman’s discretion.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Senator Jinggoy Ejercito Estrada, et al. v. Office of the Ombudsman, G.R. Nos. 212761-62, July 31, 2018

July 31, 2018

Forfeiture in Plunder Cases: Tracing Ill-Gotten Wealth and Protecting State Interests

In the case of The Wellex Group, Inc. v. Sandiganbayan, the Supreme Court addressed the extent of forfeiture orders in plunder cases, particularly concerning assets derived from ill-gotten wealth. The Court ruled that assets, including shares of stock, that are traceable to ill-gotten wealth are subject to forfeiture in favor of the State, even if held by third parties. This decision clarifies that the government’s right to recover unlawfully acquired assets extends beyond the initially acquired wealth to encompass any properties or investments derived from it. This has significant implications for individuals and entities involved in transactions with those found guilty of plunder, as their assets could be at risk of forfeiture if linked to the ill-gotten wealth.

When Loan Obligations Intersect with Plunder: Can Assets be Forfeited?

The Wellex Group, Inc. (Wellex) sought to nullify Resolutions issued by the Sandiganbayan, arguing that the inclusion of 450 million shares of stock of Waterfront Philippines, Inc. in the forfeiture proceedings was unwarranted. Wellex claimed that the shares should not be forfeited because Wellex was not a party to the plunder case against former President Joseph Ejercito Estrada. The central legal question was whether the Sandiganbayan acted with grave abuse of discretion in including these shares in the forfeiture order, given that Wellex was not directly implicated in the plunder case.

The facts of the case reveal that former President Estrada was convicted of plunder, and the Sandiganbayan ordered the forfeiture of ill-gotten wealth. This included amounts deposited in the Jose Velarde account. Subsequently, Wellex sought to retrieve Waterfront shares it had used as collateral for a loan from Equitable-PCI Bank (now Banco De Oro or BDO). Wellex argued that it believed its loan obligation had been extinguished, and thus, the shares should be returned.

However, BDO certified that Wellex had not made full payment on the principal amount of the loan, which was secured by the Waterfront shares. This certification became a crucial piece of evidence. The Sandiganbayan, after a hearing and submission of memoranda, ruled that the subject IMA Trust Account, which included the Waterfront shares, was subject to forfeiture. This was based on the account’s connection to the ill-gotten wealth of former President Estrada. Wellex filed a Motion for Reconsideration, which the Sandiganbayan denied.

The Supreme Court, in its analysis, focused on the nature of the loan transaction and the source of the funds. It emphasized that the loan to Wellex was sourced from Savings Account No. 0160-62501-5, under the name of Jose Velarde, which had been forfeited as ill-gotten wealth. This account was then coursed through the IMA Trust Account. Therefore, the Court reasoned, the Waterfront shares, which served as collateral for the loan, were directly linked to the ill-gotten wealth and were subject to forfeiture.

The Court cited Section 2 of Republic Act (R.A.) No. 7080, as amended, also known as the Plunder Law, which provides for the forfeiture of ill-gotten wealth and its interests. The relevant portion of the law states:

SECTION 2. Definition of the Crime of Plunder; Penalties. — Any public officer who, by himself or in connivance with members of his family, relatives by affinity or consanguinity, business associates, subordinates or other persons, amasses, accumulates or acquires ill-gotten wealth through a combination or series of overt criminal acts as described in Section 1 (d) hereof in the aggregate amount or total value of at least Fifty million pesos (P50,000,000.00) shall be guilty of the crime of plunder and shall be punished by reclusion perpetua to death. Any person who participated with the said public officer in the commission of an offense contributing to the crime of plunder shall likewise be punished for such offense. In the imposition of penalties, the degree of participation and the attendance of mitigating and extenuating circumstances, as provided by the Revised Penal Code, shall be considered by the court. The court shall declare any and all ill-gotten wealth and their interests and other incomes and assets including the properties and shares of stocks derived from the deposit or investment thereof forfeited in favor of the State.

The Supreme Court interpreted this provision broadly, asserting that it mandates the forfeiture of not only the ill-gotten wealth itself, but also any properties or shares derived from its deposit or investment. The Court recognized the principle that forfeiture in a criminal case is in personam, meaning it runs against the defendant until fully satisfied. The government’s power to forfeit property includes any asset involved in or traceable to the crime.

The Court rejected Wellex’s argument that the Sandiganbayan’s Resolutions unduly expanded the scope of the original Decision. It held that specifying the forfeiture of the assets of the IMA Trust Account, including the Waterfront and Wellex shares, was a legitimate application of the Plunder Law. The Sandiganbayan’s actions were not considered a grave abuse of discretion, as the trust account and its assets were directly traceable to the ill-gotten wealth of former President Estrada.

Furthermore, the Court clarified that the forfeiture of the trust account and its assets did not invalidate the loan transaction between BDO and Wellex. The loan remained valid, but the State was effectively subrogated to the rights of the trust account as the creditor. This meant that Wellex was still obligated to repay the loan, but the proceeds would now go to the government.

The Court also addressed Wellex’s claim that it had already paid its loan obligation. However, Wellex failed to provide sufficient proof of this payment, and the BDO certification indicated that the loan remained outstanding. As a result, the Court upheld the Sandiganbayan’s suggestion that Wellex could retrieve the mortgaged Waterfront shares by paying its outstanding loan to BDO. BDO could then remit the payment to the Sandiganbayan.

The Supreme Court emphasized that the Sandiganbayan’s finding that the P500 million loaned to Wellex was coursed through the Jose Velarde account was immutable and unalterable, as the original Decision had become final and executory. The Court found no capricious or whimsical exercise of judgment on the part of the Sandiganbayan. Thus, the Resolutions ordering the forfeiture of the trust account and its assets were upheld.

FAQs

What was the key issue in this case?	The central issue was whether the Sandiganbayan committed grave abuse of discretion by including shares of stock owned by a third party (Wellex) in the forfeiture proceedings of a plunder case. The Court needed to determine if these assets were traceable to ill-gotten wealth and thus subject to forfeiture.
What is the Plunder Law?	The Plunder Law (Republic Act No. 7080, as amended) defines and penalizes the crime of plunder, which involves public officers amassing ill-gotten wealth of at least P50 million. It also provides for the forfeiture of such ill-gotten wealth in favor of the State.
What does ‘traceable to ill-gotten wealth’ mean?	‘Traceable to ill-gotten wealth’ refers to assets that can be linked back to funds or properties unlawfully acquired by a public officer. This includes not only the original ill-gotten wealth but also any assets derived from its deposit or investment.
What is the significance of a chattel mortgage in this case?	The chattel mortgage was a contract where Wellex used its Waterfront shares as security for the loan. This made the shares an asset of the IMA Trust Account, which was later determined to be linked to ill-gotten wealth, subjecting the shares to forfeiture.
Did the forfeiture invalidate the loan agreement between Wellex and BDO?	No, the forfeiture did not invalidate the loan agreement. The State was subrogated to the rights of the trust account as the creditor, meaning Wellex was still obligated to repay the loan, but the proceeds would now go to the government.
What was the role of the Jose Velarde account in this case?	The Jose Velarde account was the repository of the ill-gotten wealth of former President Estrada. The loan to Wellex was sourced from this account, thus establishing the link between Wellex’s assets (the shares of stock) and the ill-gotten wealth.
What is grave abuse of discretion?	Grave abuse of discretion refers to a capricious and whimsical exercise of judgment that is so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law. It implies that the power is exercised in an arbitrary and despotic manner.
Can a third party’s assets be forfeited in a plunder case?	Yes, a third party’s assets can be forfeited if they are proven to be derived from or traceable to the ill-gotten wealth of the person convicted of plunder. This is especially true if the assets were used as collateral for a loan sourced from ill-gotten funds.

This case underscores the government’s commitment to recovering ill-gotten wealth and ensuring that those who benefit from such wealth do not escape accountability. It also highlights the importance of due diligence in financial transactions to avoid entanglement with unlawfully acquired funds. The ruling serves as a warning that assets, even those held by third parties, are not immune from forfeiture if they can be traced back to ill-gotten wealth.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: THE WELLEX GROUP, INC. VS. SANDIGANBAYAN, G.R. No. 187951, June 25, 2012

June 25, 2012

Plunder and Conspiracy: Defining the Scope of ‘Combination or Series’ in Amassing Ill-Gotten Wealth

In the case of Atty. Edward Serapio vs. Sandiganbayan, the Supreme Court addressed critical questions regarding the crime of plunder and the extent of conspiracy necessary to establish guilt. The Court clarified what constitutes a ‘combination or series’ of overt acts for proving plunder, and underscored the importance of properly informing an accused individual about the charges against them. This ruling significantly impacts how conspiracy is interpreted in plunder cases, emphasizing that guilt cannot be imputed without a clear showing of participation in an overall unlawful scheme. Ultimately, this case protects the constitutional rights of the accused while still holding public officials accountable for corruption.

When a Single Illegal Act Doesn’t Equate to Plunder

The central issue in Atty. Edward Serapio vs. Sandiganbayan revolves around determining whether Atty. Serapio’s alleged involvement in receiving money from illegal gambling constitutes the crime of plunder. The case examines the interpretation of Republic Act No. 7080 (the Plunder Law), particularly focusing on what is defined as a ‘combination or series’ of overt or criminal acts required for a plunder conviction. The question is whether a single act of toleration or protection of illegal gambling, impelled by a single criminal resolution, satisfies the requirement for ‘combination or series of acts’ under the law. The Sandiganbayan originally denied Serapio’s motion to quash the amended information, which led to this appeal before the Supreme Court.

The Court began its analysis by examining the sufficiency of the amended Information under the Revised Rules of Criminal Procedure. According to Section 6, Rule 110, an information is considered sufficient if it clearly states the offense charged, the acts or omissions constituting the offense, and the circumstances necessary for a person to understand the accusation and prepare a defense. In this case, the amended Information alleged that Atty. Serapio, along with former President Joseph Estrada and others, conspired to commit plunder through a series of overt or criminal acts. Specifically, Serapio was accused of receiving or collecting money from illegal gambling, thereby tolerating or protecting illegal gambling activities.

In analyzing whether the Information sufficiently charged plunder, the Supreme Court referenced its earlier ruling in Jose “Jinggoy” Estrada vs. Sandiganbayan. It clarified that the word “series” is synonymous with the phrase “on several instances,” referring to a repetition of the same predicate act. The Court also explained that the word “combination” implies the commission of at least two different predicate acts. Therefore, the Information needed to demonstrate either a series of the same predicate act or a combination of different predicate acts to sufficiently allege the crime of plunder.

“In this case, the amended Information specifically alleges that all the accused, including petitioner, connived and conspired with former President Joseph E. Estrada to commit plunder “through any or a combination or a series of overt or criminal acts or similar schemes or means.” And in paragraph (a) of the amended Information, petitioner and his co-accused are charged with receiving or collecting, directly or indirectly, on several instances money in the aggregate amount of P545,000,000.00.”

The Court emphasized that it is unnecessary to allege a specific pattern of overt or criminal acts in the Information. This pattern, indicative of an overall unlawful scheme or conspiracy, is considered evidentiary and, according to Section 3 of R.A. 7080, does not need to be explicitly stated in the Information. Matters of evidence are generally not required to be included in the Information, focusing instead on the essential elements of the crime charged. Additionally, the Court affirmed its previous ruling in the Jose “Jinggoy” Estrada case, stating that the aggregate amount of P4,097,804,173.17, which included the P545 million from illegal gambling, is considered ill-gotten wealth under Section 1(d) of R.A. 7080.

The Supreme Court also addressed Serapio’s argument that he was being charged with bribery and illegal gambling, rather than plunder. The Court sided with the Sandiganbayan’s view that the acts alleged in the Information were not separate offenses but rather predicate acts of the crime of plunder. The Anti-Plunder Law does not specifically reference other laws; it generically describes the overt or criminal acts constituting plunder. Thus, the fact that these acts may also be penalized under other laws is incidental. This analysis clarified that Serapio and his co-accused were charged only with the crime of plunder and not with the separate crimes that constitute its predicate acts.

The Court addressed the propriety of issuing a writ of habeas corpus for petitioner Serapio, which, generally, will not be issued if the person alleged to be restrained is in custody of an officer under a process issued by a court with jurisdiction. Petitioner is under detention pursuant to the order of arrest issued by the Sandiganbayan after the filing by the Ombudsman of the amended information for plunder, in response to which, petitioner surrendered. Thus, in the absence of irregularities, habeas corpus will not lie, unless in cases where the deprivation of liberty was initially valid but has become arbitrary because of subsequent developments.

What was the key issue in this case?	The key issue was whether the amended Information sufficiently alleged that Atty. Serapio committed plunder by engaging in a ‘combination or series’ of overt acts. The Court analyzed whether receiving money from illegal gambling qualified as such.
What is the definition of plunder according to R.A. 7080?	Plunder involves a public officer who, by himself or in connivance with others, amasses ill-gotten wealth through a combination or series of overt or criminal acts. The amassed wealth must amount to at least fifty million pesos.
What does ‘combination or series’ mean in the context of plunder?	‘Series’ means a repetition of the same predicate act, while ‘combination’ means the commission of at least two different predicate acts. These terms help define what actions are sufficient to be considered plunder under R.A. 7080.
Why wasn’t Atty. Serapio charged with bribery or illegal gambling?	The acts of bribery and illegal gambling were considered predicate acts of plunder, meaning they contributed to the overall crime of plunder. The charges focused on the larger crime of plunder, rather than these individual offenses.
Was it necessary to detail the exact criminal acts in the Information?	The Information must include the essential elements of the crime, but evidentiary details are not required. This means the Information must clearly state the offense, but not necessarily every piece of evidence.
What was the significance of the Jose “Jinggoy” Estrada case?	The Court relied on its earlier ruling in Jose “Jinggoy” Estrada vs. Sandiganbayan to interpret key terms like ‘series’ and ‘combination.’ It used this previous case to determine whether the amended Information adequately charged Serapio with plunder.
How does conspiracy factor into a plunder charge?	When individuals conspire to commit a crime, each is responsible for the acts of the others. This means that all conspirators can be held liable for the overarching crime of plunder, even if they did not directly commit every act.
Is there a double jeopardy on this case?	No. There is no double jeopardy as long as an accused is not convicted twice for the same act. The predicate acts here formed a series to reach the crime of plunder under Sec. 2 of RA 7080.

In conclusion, the Supreme Court in Atty. Edward Serapio vs. Sandiganbayan provided vital clarification regarding the crime of plunder. It underscored that allegations of conspiracy must be substantiated with factual details demonstrating active participation in the amassing of ill-gotten wealth. This decision has significant implications for future plunder cases, helping to ensure that those accused are fully informed of the charges against them, while upholding the accountability of public officials for corruption.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: ATTY. EDWARD SERAPIO VS. SANDIGANBAYAN, G.R. NO. 148769, January 28, 2003

January 28, 2003