Cebu bank officials charged over P2.6B anomalous loans

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Thursday, January 30, 2014

TWO former officials of defunct Rural Bank of Subangdaku Inc. were facing criminal complaints before the Department of Justice (DOJ) for the creation of fictitious loans and conducting business in an unsafe manner.

In its complaint, Philippine Deposit Insurance Corp. (PDIC) said respondents Paz Radaza (president and member of the RBSI credit committee) and Julius Eullaran (bankwide loans manager) conspired for the creation of 6,051 ghost loans amounting to almost P2.6 billion from 2004 to 2008.

The amount represents around 97 percent of all the loans supposedly released by the RSBI – Head Office during the four-year period, according to a statement released by the PDIC on Wednesday.

The respondents also allegedly orchestrated the creation of official receipts and made it appear that payments were being made to the bank, when in fact, no payment was being received.

"These supposed payments were used to provide the purported source of the fictitious loan proceeds," said the PDIC, which filed the complaint last January 13.

A former loan officer, whose identity was not disclosed by the PDIC, said Radaza and Eullaran ordered their subordinates to create fictitious loans based on the information provided by Eullaran.

Results of the forensic investigation by Alba Romeo & Co., meanwhile, showed that 5,470 of the 6,051 fictitious loans did not contain the required credit information. Also, 581 of these loans did not have any supporting documents.

Demand letters to the named borrowers of these loans were returned due to unknown addresses or the borrowers did not exist, the PDIC said.

The RBSI was placed under PDIC receivership by the Monetary Board on January 8, 2009.

As deposit insurer and receiver/liquidator of closed banks, the PDIC is authorized to conduct investigations and file appropriate cases against bank officials and individuals who are found to have violated banking laws. (Sunnex)

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