REPUBLIC v. BOLANTE

REPUBLIC OF THE PHILIPPINES, represented by the ANTI-MONEY LAUNDERING COUNCIL, Petitioners vs. JOCELYN I. BOLANTE, OWEN VINCENT D. BOLANTE, MA. CAROL D. BOLANTE, ALEJO LAMERA, CARMEN LAMERA, EDNA CONSTANTINO, ARIEL C. PANGANIBAN, KATHERINE G. BOMBEO, SAMUEL S. BOMBEO, MOLUGAN FOUNDATION, SAMUEL G. BOMBEO, JR., and NATIONAL LIVELIHOOD DEVELOPMENT CORPORATION (Formerly Livelihood Corporation), Respondents

G.R. No. 186717

April 17, 2017

Facts:

In April 2005, the Philippine National Bank (PNB) submitted to the Anti-Money Laundering Council (AMLC) a series of suspicious transaction reports involving the accounts of Livelihood Corporation (LIVECOR), Molugan Foundation (Molugan), and Assembly of Gracious Samaritans, Inc. (AGS).

According to the reports, LIVECOR transferred to Molugan a total amount of' ₱172.6 million in a span of 15 months from 2004 to 2005. On 30 April 2004, LIVECOR transferred ₱40 million to AGS, which received another P38 million from Molugan on the same day. Curiously, AGS returned the P38 million to Molugan also on the same day.

The transactions were reported '"suspicious" because they had no underlying legal or trade obligation, purpose or economic justification; nor were they commensurate to the business or financial capacity of Molugan and AGS, which were both lowly capitalized at P50, 000 each. In the case of Molugan, Samuel S. Bombeo, who holds the position of president, secretary and treasurer, is the lone signatory to the account. In the case of AGS, Samuel S. Bombeo shares this responsibility with Ariel Panganiban.

On 7 March 2006, the Senate furnished the AMLC a copy of its Committee Report No. 54 prepared by the Committee on Agriculture and Food and the Committee on Accountability of Public Officers and Investigations.

Committee Report No. 54 narrated that former Undersecretary of Agriculture Jocelyn I. Bolante (Bolante) requested the Department of Budget and Management to release to the Department of Agriculture the amount of ₱728 million for the purchase of farm inputs under the Ginintuang Masaganang Ani Program. This amount was used to purchase liquid fertilizers from Freshan Philippines, Inc., which were then distributed to local government units and congressional districts beginning January 2004. Based on the Audit Report prepared by the Commission on Audit (COA), the use of the funds was characterized by massive irregularities, overpricing, and violations of the procurement law and wanton wastage of scarce government resources.

The AMLC issued Resolution No.75 finding probable cause to believe that the accounts of LIVECOR, Molugan and AGS - the subjects of the suspicious transaction reports submitted by PNB - were related to what became known as the "fertilizer fund scam. The acts involved in the "fertilizer scam" may constitute violation of Section 3(e) of Republic Act No. 3019, x x x as well as violation or Republic Act No. 7080 (Plunder).

Thus, the AMLC authorized the filing of a petition for the issuance of an order allowing an inquiry into the six accounts 18 of LIVECOR, Molugan, AGS, Samuel S. Bombeo and Ariel Panganiban. The AMLC also required all covered institutions to submit reports of covered transactions and/or suspicious transactions of these entities and individuals, including all the related web of accounts.

 Petition was filed ex parte before the R TC and docketed as AMLC SP Case No. 06-003. On 17 November 2006, the trial court found probable cause and issued the Order prayed for. It allowed the AMLC to inquire into and examine the six bank deposits or investments and the related web of accounts.

In view of this development, the AMLC issued Resolution No. 40.27 It authorized the filing of a petition for the issuance of a freeze order against the 70 accounts found to be related to the fertilizer fund scam. Hence, the Republic filed an Ex Parte Petition docketed as CA-G.R. AMLC No. 00014 before the CA, seeking the issuance of a freeze order against the 70 accounts.

The CA issued a freeze order effective for 20 days.  The freeze order required the covered institutions of the 70 accounts to desist from and not allow any transaction involving the identified monetary instruments. It also asked the covered institutions to submit a detailed written return to the CA within 24 hours from receipt of the freeze order.

The CA conducted a summary hearing of the application, after which the parties were ordered to submit their memoranda, manifestations and comments/oppositions. The freeze order was later extended for a period of 30 days until 19 August 2008.

Finding that there existed probable cause that the funds transferred to and juggled by LIVECOR, Molugan, and AGS formed pati of the ₱728 million fertilizer fund, the CA extended the effectivity of the freeze order for another four months, or until 20 December 2008.  The extension covered only 31 accounts, which showed an existing balance based on the returns of the covered institutions.

In the meantime, the Republic filed an Ex Parte Application docketed as AMLC Case No. 07-001 before the RTC. Drawing on the authority provided by the AMLC through Resolution No. 90, the ex parte application sought the issuance of an order allowing an inquiry into the 70 accounts.

The RTC found probable cause and issued the Order prayed for.  It allowed the AMLC to inquire into and examine the 70 bank deposits or investments and the related web of accounts.

Hence, the Republic filed an Urgent Ex Parte Petition docketed as CA-G.R. AMLC No. 00024 before the CA seeking the issuance of a freeze order against the 24 accounts.

In the Resolution dated 4 February 2009, the CA issued a freeze order effective for 20 days. The freeze order required the covered institutions of the 24 accounts to desist from and not allow any transaction involving the identified monetary instruments. It also asked the covered institutions to submit a detailed written return to the CA within 24 hours from receipt of the freeze order.

Issue:

• Whether the Republic committed forum shopping in filing CA-G.R. AMLC No. 00024 before the CA.
• Whether the RTC committed grave abuse of discretion in ruling that there exists no probable cause to allow an inquiry into the total of 76 deposits and investments of respondents.

Held:

Yes. The Republic committed forum shopping. As we ruled in Chua v. Metropolitan Bank and Trust Co, forum shopping is committed in three ways: (1) filing multiple cases based on the same cause of action and with the same prayer, where the previous case has not yet been resolved (the ground for dismissal is litis pendentia); (2) filing multiple cases based on the same cause of action and with the same prayer, where the previous case has finally been resolved (the ground for dismissal is res judicata); and (3) filing multiple cases based on the same cause of action, but with different prayers (splitting of causes of action, where the ground for dismissal is also either litis pendentia or res judicata).

While it is true that a previous freeze order was issued in CA-G.R. AMLC No. 00014 covering some of the accounts subject of CA-G.R. AMLC No. 00024, CA-G.R. AAILC No. 00014 had already attained finality when the second petition was filed, neither petitioner nor any of the respondents interposed an appeal therefrom, pursuant to Section 57 of the Rule of Procedure in Cases of Civil F01feiture, etc.

We are not even sure where the Republic got the notion that the CA found "that the filing of the second petition for freeze order constitutes forum shopping on the ground of litis pendentia. In its assailed Resolution, the appellate court aptly cited Quinsay v. CA, stating that "forum shopping concurs not only when a final judgment in one case will amount to res judicata in another, but also where the elements of litis pendentia are present."

Rule 10.2 of the Revised Rules and Regulations Implementing Republic Act No. 9160, as Amended by Republic Act No. 9194, defined probable cause as "such facts and circumstances which would lead a reasonably discreet, prudent or cautious man to believe that an unlawful activity and/or a money laundering offense is about to be, is being or has been committed and that the account or any monetary instrument or property subject thereof sought to be frozen is in any way related to said unlawful activity and/or money laundering offense.

Section 11, itself requires that it be established that "there is probable cause that the deposits or investments are related to unlawful activities," and it obviously is the court which stands as arbiter whether there is indeed such probable cause. The process of inquiring into the existence of probable cause would involve the function of determination reposed on the trial court.

For the trial court to issue a bank inquiry order, it is necessary for the AMLC to be able to show specific facts and circumstances that provide a link between an unlawful activity or a money laundering offense, on the one hand, and the account or monetary instrument or property sought to be examined on the other hand. In this case, the R TC found the evidence presented by the AMLC wanting. For its part, the latter insists that the RTC's determination was tainted with grave abuse of discretion for ignoring the glaring existence of probable cause that the subject bank deposits and investments were related to an unlawful activity.

It was this excerpt that led the AMLC to connect the fertilizer fund scam to the suspicious transaction reports earlier submitted to it by PNB. However, the R TC found during trial that respondent Bolante had ceased to be a member of the board of trustees of LIVECOR for 14 months before the latter even made the initial transaction, which was the subject of the suspicious transaction reports. Furthermore, the RTC took note that according to the Audit Report submitted by the Commission on Audit, no part of the P728 million fertilizer fund was ever released to LIVECOR.

We note that in the RTC Order dated 17 November 2006 in AMLC SP Case No. 06-003, the AMLC was already allowed ex parte to inquire into and examine the six bank deposits or investments and the related web of accounts of LIVECOR, Molugan, AGS, Samuel S. Bombeo and Ariel Panganiban. 

With the resources available to the AMLC, coupled with a bank inquiry order granted 15 months before Eugenio was even promulgated, the AMLC should have been able to obtain more evidence establishing a more substantive link tying Bolante and the fertilizer fund scam to LIVECOR. It did not help that the AMLC failed to include in its application for a bank inquiry order in AMLC SP Case No. 06-003 LIVECOR's PNB account as indicated in the suspicious transaction reports. This PNB account was included only in the application for a bank inquiry order in AMLC Case No. 07-001.

As it stands, the evidence relied upon by the AMLC in 2006 was still the same evidence it used to apply for a bank inquiry order in 2008. Regrettably, this evidence proved to be insufficient when weighed against that presented by the respondents, who were given notice and the opportunity to contest the issuance of the bank inquiry order pursuant to Eugenio. In fine, the RTC did not commit grave abuse of discretion in denying the application.

WHEREFORE, the petition in G.R. No. 186717 is DENIED. The Court of Appeals Resolution dated 27 February 2009 in CA-G.R. AMLC No. 00024 is AFFIRMED.

The petition in G.R. No. 190357 is DISMISSED. The Resolution dated 3 July 2009 and Order dated 13 November 2009 issued by the Regional Trial Court of Makati, Branch 59, in AMLC Case No. 07-001 are AFFIRMED.

The Status Quo Ante Order issued by this Court on 25 March 2009 is hereby LIFTED.