An out-of-court settlement may be reached between the government and one of 28 respondents in the multibillion-peso scam involving the fraudulent use of tax credit certificates (TCCs), Malacañang said yesterday.
Executive Secretary Ronaldo Zamora said Faustino Ching Koe has pro-mised not only to pay the government P534 million as compromise settlement but also to reveal other individuals involved in the scam, which allegedly took place during the Ramos administration.
Deputized by the Office of the Ombudsman, the Presidential Task Force 156 which is looking into the tax anomaly has formally filed the criminal complaint before the seven-member state prosecutors' team at the Department of Justice (DOJ).
Zamora disclosed that the task force executive director, Alberto Salanga, was still in Hong Kong yesterday talking with Ching Koe whose 10 textile and garment firms were among the private companies implicated in the scam.
Ching Koe, whose firms allegedly defrauded government of P2.3 billion, has already acquired Canadian citizenship in 1998. His properties and bank deposits in the Philippines, however, had been ordered frozen by the government.
"He (Salanga) was negotiating with the settlement of this private respondent not just for full restitution of the tax frauds but also to pinpoint his cohorts and accomplices," said Zamora who described the scam as "mind-boggling."
Zamora indicated that as of the latest estimates of the task force, the tax fraud amounted to P4.5 billion out of 28 individual cases.
"We're beginning to see this is only the tip of the iceberg," he said, adding that the amount defrauded the government could easily reach P8 billion.
Zamora refused to elaborate, saying he may only end up speculating who were the "real beneficiaries" of the tax fraud in which a former finance undersecretary and two lower officials of the department have already been implicated.
"I don't think only three of these officials were involved," he said, referring to former Finance Undersecretary Antonio Belicena, and former executive director Uldarico Andutan and his deputy Raul Rivera of the defunct One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center.
The three have all been recommended to be charged with violating Section 3 of the Anti-Graft and Corrupt Practices Act.
"The point of entering into a compromise (with Ching Koe) is precisely to secure even more information in order to get larger fish and more names," Zamora said.
If the task force is able to reach the settlement with Ching Koe, the government will be able to secure P1.6 billion from the other respondents he will identify later on, Zamora added Ching Koe's firms were found to have availed themselves of TCCs although they were not entitled to them, and sold these at a discount to oil companies.
But since the sales documents were forged, the task force discovered that the oil companies benefited.
"In other words, the TCCs really did not represent any tax exemption since there were no export goods to be taxed in the first place," the task force explained.
Zamora and other task force members, including police chief Director General Panfilo Lacson and Justice Undersecretary Antonio Llorente, signed and swore before the criminal complaints against the respondents.
President Estrada announced last Wednesday the filing before the Ombudsman of charges of graft and corruption, including economic plunder, against 28 officials of two oil companies and former finance officials along with officers of 18 garments firms for allegedly defrauding the government of P990 million.
Among the oil company officials named in the complaint were former Petron president Monico Jacob and Shell Pilipinas general manager Pacifico Cruz. Also charged were Petron's vice president and general manager Celso Legarda, Abdul-Aziz Al-Khyayal, Apolinario Reyes, Reynaldo Campos and Rafael Diaz Jr.
Aside from Ching Koe, other garments firms owners charged included John Chua of Fibrefill Mfng.; Delfin Poonim of San Pablo Lake Knitting Corp.; L.D. Sharma of Indo Cotton Mills; Angel Chua of Jantex Phils.; and Sanjay Dalmia of Independent Acrylic.
Meanwhile, Surigao del Sur Rep. Robert Ace Barbers (Lakas) urged concerned authorities to issue hold orders against officials and private citizens involved in the tax fraud following the Ching Koe couple's slipping to Hong Kong last year.
Ching Koe and his wife Gloria are now reportedly seeking resident status in the former Crown Colony. Testifying before a Senate hearing Ching Koe's younger brother said the couple were at the same time applying for an entry visa to China.