DOJ clears 5 in scrap metal scam

MANILA, Philippines - The Department of Justice (DOJ) has cleared five foreign businessmen and their Filipino partners of syndicated estafa charges over the alleged sale overseas of non-existent scrap metal worth P35 million by their firm, Zephyr Metal Trading.

In a 14-page resolution released last week, the DOJ Task Force on Security Scams dismissed for lack of probable cause the complaint filed in October 2012 by the Philippine National Police – Criminal Investigation and Detection Group (PNP-CIDG), which also accused the foreigners of being members of an international financial criminal syndicate.

The PNP-CIDG alleged that the respondents were members of an international criminal syndicate whose modus operandi was to attract foreign scrap metal buyers to buy large amounts of scrap metal but to later replace the cargo with garbage, rocks and concrete prior to shipment.

The case stemmed from a complaint filed by Lai Fu Sung, president of Taiwan-based Lies Between Encircles The Enterprise Co. Ltd.

Lai alleged that he met with Tan and signed a contract to buy 100 metric tons of scrap copper for P35 million, which he paid in March 2011.

When the shipment arrived in Taiwan, Lai said they received industrial waste in five shipping containers.

Among those cleared by the DOJ are Ah Chai Teo, alias Aceteo, a Singaporean; Huang Chen alias Patrick Hwang, Taiwanese; Lim Hoi Chung alias Ronald Lim, a Hong Kong-British national; Chen Qwee Khai alias Justin Chang, Singaporean; and Chen Zhi Quiang alias Jason Tan, Chinese.

Also exonerated were their Filipino partners: Romeo Diaz Flores, retired policeman Guerrero Villacorta, Maryann Vasquez Basan, Pacido Ramos and Janet Villareal.

No proof

In dismissing the case, the DOJ stressed that the results of the separate investigations made by the PNP-CIDG and the Anti-Money Laundering Council (AMLC) failed to prove “when, where and how the switching of goods was done.”

The DOJ said “it was not even shown that complainant reported the incident of switching to the customs authority in Taiwan, and not one of the officials or employees of the Bureau of Customs were indicted” for allegedly conniving in the scam.

“Respondents cannot be held liable for syndicated estafa since complainant failed to prove that respondents committed unlawful act or carry out transaction of soliciting funds from the general public by way of investments through fraudulent scheme,” read the resolution signed by Eden Wakay-Valdes and approved by Prosecutor General Claro Arellano.

Long-term operation

Citing the statement of their witness, Romeo Pascual, the PNP-CIDG alleged that the syndicate has been using the same modus operandi for more than 10 years, meaning there are more likely many other foreign companies that have been victimized.

But according to the DOJ, Lai failed to show in a satisfactory manner the facts upon which he based his allegation, including how he had transacted the business with the respondents.

The respondents denied the allegations against them and pointed out that the witness used by the police had an ax to grind against them.

“The real intent of Pascual is simply to have all the respondents implicated in the case. In fact, respondents have already filed perjury and malicious prosecution cases against Pascual now pending preliminary investigation before the Taytay, Rizal prosecutor’s office,” the respondents said.