Cops, soldiers eyed in lifestyle check

Soldiers and policemen may soon be included in the government’s lifestyle check in the wake of reports that most of the victims of a major pyramid scam came from their ranks.

Presidential Spokesman Ignacio Bunye noted with concern yesterday observations that despite being among the lowest-paid government employees, thousands of soldiers and policemen were swindled through the fraudulent investment scheme.

However, Bunye said the government is more concerned with preventing pyramid scam operators from victimizing more people.

"Part of the problem is that some of our countrymen are easily hoodwinked in the promise of big returns on their investments. So I think what we can do is to launch an information drive," Bunye said.

He explained that people should be forewarned to stay away from these operators even if "they see a big difference on the return on their investments compared to the regular rates being offered by banks and other financial institutions."

A "pyramid scam" is an investment swindle in which some early investors are paid off with money put up by later ones in order to encourage more and bigger risks.

Bunye said President Arroyo is set to appoint a new official to a lifestyle check body that will soon be created.

He clarified, though, that if ever such lifestyle checks may be

subsequently conducted on police and military officials who were swindled of their huge investments, it was not because of these "pyramid scams."

He said the likely inclusion of police and military men in the lifestyle check ordered by Mrs. Arroyo last year on all government officials was the result of an ongoing review by the Palace "to strengthen" the government’s campaign against graft and corruption.

"It’s not because of this (pyramid) scam but because the government wants to strengthen the arms that would conduct the lifestyle check," Bunye said.

He also said the Palace is still studying a measure earlier announced by Mrs. Arroyo to create a special body to assist the Presidential Anti-Graft Commission (PAGC) in the conduct of lifestyle checks on government officials, including police and military men.

Bunye said this study is still being made by presidential chief of staff Rigoberto Tiglao to refute reports that he was being groomed to replace PAGC Chairman Dario Rama.

"The report must have arisen from instructions by the President for Secretary Tiglao to review the proposed system or process of conducting lifestyle checks on presidential appointees," he said.

Bunye explained that Tiglao "has been tasked to study if the proposed unit which would conduct lifestyle checks will be directly under the PAGC or would be a monitoring unit separate from but coordinating with the PAGC."

He noted that "there is no plan to remove" Rama, who "is doing a good job."

This was confirmed to The STAR yesterday by Tiglao, who said that his office is still in the process of finalizing the proposed lifestyle check scheme to make it an effective deterrent against graft and corruption.

The President earlier said the PAGC is "not equipped" to conduct the "lifestyle checks" she ordered as early as last year, in response to the mounting complaints of unchecked corruption at the highest levels of office in various government agencies.

"The PAGC is just like any court, it can receive (graft) complaints and order respondents to present and explain their side. But it is not an investigating body in itself. It is not equipped for investigation," Mrs. Arroyo said.

She added that she is "forming an investigating unit within the Office of the President for the lifestyle check" of officials and employees, particularly those under the Bureau of Internal Revenue and the Bureau of Customs, which are the agencies she "wanted to be the showcase of my administration’s anti-graft campaign."

Meanwhile, Philippine National Police (PNP) Criminal Investigation and Detection Group (CIDG) deputy director Chief Superintendent Charlemagne Alejandrino issued verbal orders yesterday prohibiting investigators from divulging results of the investigation on the pyramid scam without seeking clearance from his office.

Alejandrino is the highest ranking police official who openly admitted that he was among the victims of pyramid scam operator Maria Teresa Santos, who founded Maria Teresa Santos Trading (MTST).

MTST had gypped at least 12,000 cops, military men, civilians and agents of the National Bureau of Investigation of at least P5 billion.

At least 50 complainants have filed their complaints before the anti-fraud division of the PNP-CIDG.

One of the complainants is a police superintendent who is currently holding a provincial directorial post.

The police official, who asked not to be named, said he also accompanied his wife who also lost at least P600,000 to MTST.

"I did this on my personal capacity," he said, adding that his underclassmen at the Philippine Military Academy lured him into investing in the pyramid scheme.

Another victim, Rosalia Villanueva, told The STAR that she and some of her friends invested in the scheme because of the 20 percent return on investment.

Villanueva said she borrowed P50,000 from the Armed Forces of the Philippines’ Savings and Loan Association, Inc. to be able to join the scheme.

"I intended to use my earnings for the tuition of my children but the checks I got were not encashed by the bank starting December last year," she said.

Villanueva said she received two checks, each amounting to P8,500. "The other checks came but the bank reported that they cannot be withdrawn due to lack of funds," she said.

Other complainants staged a mini-vigil at the visiting area of the CIDG jail, but they waited in vain for Santos to talk to them following reports that she was willing to return their money in exchange for not filing criminal charges against her.

CIDG investigators, however, said Santos is facing large-scale estafa before different courts in Metro Manila

The police are also preparing to file charges against her for swindling and for issuing bouncing checks.

Santos was arrested by combined elements of the PNP-CIDG, Police Anti-Crime Emergency Response and the PNP Intelligence Group at an apartelle in Quezon City Thursday morning after weeks of surveillance.

The raiding team was led by Chief Inspector Vicente Medenilla, who happened to be one of Santos’ victims.

"We have been tailing her from Zambales to Baguio City. We ended (up) in Quezon City, where we cordoned the place to ensure her arrest," he said.

The arrest came after policemen monitored Santos contacting some journalists in Metro Manila to expose certain PNP personnel who tried to extort money from her in exchange for her freedom.

The police accused Santos of using her vast financial resources to evade arrest and counter the efforts of the PNP through a black propaganda campaign using the media.

Medenilla said he invested P20 million in February last year with a promise of a 20 percent monthly return on investment from MTST.

Since then Medenilla regularly received a return on investment of P4 million a month until October. Bank checks started to bounce in November, around the time when the MTST’s pyramid scheme began to crumble.

Medenilla said he has yet to collect some P43 million from Santos, P30 million of which is supposed to go to his investment "riders," composed of his relatives and some close friends.

Meanwhile, a family of entrepreneurs, in a statement, vehemently denied any participation in the operation of three firms involved in a multibillion-peso pyramid scam.

Spouses Patrocinia and Conrado Ariola Jr., their daughter Ma. Louella and son-in-law Alfonso "Edward" Silvestre, and daughter-in-law Florencia and son Joseph Valiant Ariola denied reports linking them to Multinational Telecom Investors Corp. (Multitel), Five Vision Consultancy Inc. (FVCI), and Intercontinental Services Inc. (ISI).

They said they were "victims" and "not incorporators or principals" of these three firms.

They pointed out that their family-owned Conrad Group and Associates Inc. (CGAI) and Servlink Cargo Inc. (SCI) are two large business firms duly registered with the Securities and Exchange Commission and have nothing to do with the solicitation of investments or funds for Multitel, FVCI and ISI.

The Ariola family are awaiting the resolution of the Makati City prosecutor’s office on the criminal charges they filed against Rosario Baladjay, president of Multitel, last year.

Separate criminal charges are being readied against FVCI and ISI. The cases will be incorporated into a class suit filed by more than 50 other victims who were swindled of some P950 million.

They Ariola family said these three firms have not returned their investment, amounting to at least P1 million. – With Christina Mendez