President Benigno S. Aquino III pays respect during the transfer and reinterment of the remains of the late President Elpidio R. Quirino at the Libingan ng mga Bayani in Bayani Road, Fort Bonifacio, Taguig City on Monday (February 29). In photo are Former president Fidel Ramos, National Historical Commission of the Philippines (NHCP) chairperson Maria Serena Diokno, Defense Secretary Voltaire Gazmin, and Armed Forces of the Philippines Vice Chief-of-Staff Lt. Gen. Romeo Tanalgo. (MNS photo)
MANILA (Mabuhay) – The Sandiganbayan’s Fifth Division has convicted three former officials of the Department of Finance (DOF) for graft and estafa for their involvement in the P5.3-billion tax credit scam in the 1990s.
The anti-graft court promulgated a 60-page ruling on the matter February 29 and was released to the media on Tuesday.
In the ruling, the Fifth Division found former DOF Executive Director Uldarico Andutan Jr., former Deputy Executive Director Raul De Vera and former Senior Tax Specialist Rosanna Diala “guilty beyond reasonable doubt” of violating Section 3 (e) of Republic Act 3019 or the Anti-Graft and Corrupt Practices Act and estafa as defined under Article 315 of the Revised Penal Code (RPC).
Also convicted of the same offenses were private individuals Mukesh Uttamchandani and Olivia Demetrio, owner and manager, respectively, of the company Precision Garments International (PGI).
The accused were sentenced to a minimum of six years and one month to a maximum of 10 years imprisonment for graft. They were also perpetually disqualified from holding public office.
For estafa the accused were sentenced to a minimum of four years and two months to a maximum of 20 years imprisonment. They were ordered to jointly pay P18,812,732 for undue damages the crimes they committed had caused the government.
In so far as the primary accused, former Finance Undersecretary Antonio Belicena is concerned, the proceedings of the cases were indefinitely suspended in line with the court’s September 22, 2014 ruling ordering the cases against him to be achieved after his camp was able to prove that he is suffering from dementia and would not be competent to stand trial.
No supporting documents
Based on the various information on the cases filed by the Office of the Ombudsman in April 2000, the public officials who were all members of the then Tax Credit and Duty Drawback Center issued on March 17, 1998 a tax credit certificate (TCC) for P27.810 million in favor of the PGI. The center was an attached agency of the DOF.
The Ombudsman said the TCC was issued to PGI despite the public respondents’ full knowledge that supporting documents such as credit memos, export declarations, export sales invoices and bills of lading “were not duly issued or the original copies thereof are non-existent.”
The case information noted the TCC was later sold by the PGI to Steel Asia Manufacturing Corporation, which in turn used the same document in paying its tax obligations with the Bureau of Customs. As a result, the government lost P27.810 million in revenues.
The One-Stop Shop Inter-Agency Tax Credit project was spearheaded by the DOF during the administration of then President Fidel V. Ramos.
Under the project, the government issued TCCs as tax refunds to companies that manufacture local products for export.
However, in a Senate investigation in late 1998, it was discovered that P5.3 billion worth of TCCs were issued to several companies, including PGI, from 1995 to early 1998 despite spurious documents.
In convicting the accused, the Fifth Division gave weight to documentary evidence and testimonies of prosecution witnesses Salvador Dimalanta and Teresita Declaro, officials of the Bank of the Philippine Islands (BPI), who confirmed that their signatures in the credit memos the bank supposedly issued to PGI were forged.
Dimalanta testified that PGI had never been a client of BPI.
No BPI account
In a December 1, 1998 letter to the DOF, Dimalanta and Declaro confirmed that the account number in the credit memos was invalid.
“Evidently, accused Uttamchandani submitted to the Center the export declarations, export sales invoices, bills of lading and the FCDU (foreign currency deposit unit) credit memos to make it appear that the company still exported products and that there were foreign currency deposits made in its accounts with BPI, when in fact, PGI had no such account in BPI, there was no foreign transactions made by the company as it had already been inactive since 1995,” the resolution penned by Fifth Division Chairman Associate Justice Roland Jurado said.
The ruling was concurred by Fifth Division members Associate Justices Alexander Gesmundo and Maria Theresa Dolores Gomez-Estoesta.
“Such misrepresentation clearly constitutes deceit. The said misrepresentation was committed prior to the commission of the fraud and because of the said false representations, its application for tax credit was granted,” the court noted.
The swift approval of the TCC in favor of PGI, without checking first the company’s track record and actual operation, constituted unwarranted benefits to the damage of the government, the court said.
“The Center was created not only to simplify the availments of credits on taxes and duties but also to safeguard the system from the occurrences of undue claims. It stands to reason therefore that the employees of the Center particularly those given functions of evaluating the application for tax credit are duty bound to ensure that the claims of the applicants are valid,” the resolution read.
“This can be done only by thoroughly examining and verifying the documents submitted in support of the said claim,” it added.
More than a hundred criminal cases were filed against Belicena, Andutan, former DOF officials and several other private individuals in connection with the tax credit scam.
The cases were pending in all the five divisions of the Sandiganbayan. (MNS)