This success story has been provided by the Philippine Anti-Corruption Authority and is posted on this site in its original form.

1. Case Description/Context

This case involves the processing, approval and payment of the loan application of Valentine E. Viniegas in the total amount of P2,750,000.00. The loan granted by the Quedan Rural Guarantee Corporation (Quedancor) National Capital Region (NCR) office is secured by a Deed of Real Estate Mortgage constituted on three (3) parcels of land, registered in the names of Armando Crisostomo and Elias Yabot both of Barangay Entablado, Cabiao, Nueva Ecija and another parcel of land in the name of Editha C. Viniegas. The  loan was approved in the amount of P2,750,000.00 for which the check of P2,640,625.00 drawn from Landbank of the Philippines, Taft Avenue, Manila after deducting the standard loan charges. The records of the Register of Deeds of Cabanatuan City, Nueva Ecija show that the real estate mortgage was constituted in favor of Quedancor in the sum of P2 Million and the property of Editha Viniegas located in Caloocan City in the sum of P750,000.00. The records also show that the value of the three (3) parcels of land securing the loan obligation of Valentine Viniegas is way below the amount of the loan. The two (2) lots in Cabiao, Nueva Ecija were valued at P200,000.00 while the other lot was valued at P171,900.00. The property of Editha Viniegas was appraised at P750,000.00 without the benefit of any tax declaration as basis for valuation. There was a great disparity in the value of the properties vis-à-vis  the amount of the loan obligation.

2. Agency InterventionEnforcement action, Launching investigation

The anomalous transaction was discovered in the course of operations audit conducted by the Quedancor Internal Audit Service at its office at the National Capital Region office. Due to the gravity of the findings and other unearthed irregularities, the Board Management Committee requested the NBI to conduct thorough and exhaustive investigation. The investigation by the NBI further yielded more anomalous transactions which damaged Quedancor in the amount of P17 Million pesos where fictitious borrowers were unearthed. From 2008 to 2009, the said amount was released though connivance of the ten (10) Quedancor officials and employees and the private entities later proven bogus after the investigation. There was also the very poor internal control system in the organization.

3. Key results achieved

On January 23,2008, the NBI came up with its investigation report and recommended the prosecution of the Regional Vice President, for approving the loan, Chairman and members of the District Guarantee Committee for favorable evaluation of the loan transactions prejudicial to Quedancor, Employees who conducted the credit and background investigation, prepared and approved the glaringly defective appraisal reports , reckless endorsement of the loan proposal of Valentine Viniegas which was clearly low on collateral, failed to adequately and efficiently review the collateral, and prepared the defective loan proposal of Valentine Viniegas in the amount of P2,750,000.00. The accountable officers and officials were also administratively charged for grave misconduct before the Office of the Ombudsman. There was a revision of the procedures and strengthening of the internal control system in the organization. The accountable officers are now facing charges of graft and falsification of documents before the courts in Manila, Philippines.

4. Key challenges remaining

The accountable officers and officials were arraigned at the Regional Trial Court of Manila for Falsification of public documents, and Corruption. However, the key officer, the Regional Accountant was able to leave the country even before the NBI Investigation was conducted. It is with great expectation that this forum would provide avenues to capture the Accused by way of international cooperation so that the Philippine courts could have jurisdiction over the Accused.

5. Potential or actual impact on the national anti-corruption momentum Beyond the results of the case

The public trust towards government was strengthened. Transnational corruption should not be tolerated because it defeats the best efforts of law enforcement and the courts. Corrupt criminals must be jailed and the migrating to other countries will never be a haven for corruption to enjoy the fruits of their crimes.

6. How much information was shared nationally and internationally

Among government agencies, the Quedancor and the NBI, a joint investigation was conducted to gather sufficient evidence and charge the accountable officers. Monitoring the movements of Accused remains a great task considering the limited resources and the volume of cases handled by the Anti-Graft Division in the NBI. Networking of assets in the Philippines had proven fruitful.  The advances in information technology had provided means to track certain criminals in their whereabouts. This international forum serves as an exchange of information on the methods of investigation and a look into the judicial processes in the Philippines. There is a view point on how corruption cases are tried in court and the tedious process it takes to prosecute corrupt criminals in the Philippines.

 

Reported by: Atty. Eleanor Rachel R. Marfil-Angeles Chief, Anti-Graft Division National Bureau of Investigation Taft Avenue, Manila

Source: The World Bank Department of Institutional Integrity