Sale of contested properties
If the whistle-blowers of Janet Lim-Napoles are to be believed, the alleged mastermind of the P10-billion pork barrel scam owns 70 houses and lots in posh subdivisions, and 45 cars and sport utility vehicles.
This luxurious lifestyle is reportedly complemented by membership in Club Punta Fuego in Batangas, Tagaytay Highlands in Cavite, The Palms Country Club in Alabang, and Manila Polo Club and Manila Golf Club in Makati City.
In addition, at least three real estate properties in the United States—the Anaheim Express Inn valued at $7 million, a $1.4-million house in Canyon Valley and a commercial lot in Covina City, all in Southern California—are believed to be owned by her family.
Not to be outdone, her daughter Jeane bought in 2011 a 1,500- square foot unit at the luxurious Ritz Carlton condominium in Los Angeles for $1.28 million.
She said in an interview that the money she used to acquire this unit, and other properties in the United States, came from legitimate sources.
Shortly after Napoles surrendered and was detained at Fort Santo Domingo while awaiting trial for serious illegal detention, word spread that she is selling some of her properties in the country.
As if on cue, a US real estate company posted on its website that her daughter’s condominium unit in Los Angeles was in the market for $1.47 million.
Fund raising
These sales pitches were confirmed by Napoles’ lawyer, Lorna Kapunan. In an interview, she said there was nothing wrong with her client’s family selling some of their assets here and abroad.
According to her, this has to be done to meet their financial needs because their cash flow has been adversely affected by the arrest of their matriarch.
For obvious reasons, she did not say the fundraising will also pay for her law office’s services and the expenses incurred in defending her in the serious detention case.
The legal bills are expected to go up in the wake of the plunder and tax evasion cases filed by the Department of Justice and Bureau of Internal Revenue against Napoles and other members of her family.
Under ordinary circumstances, this “fire sale” would attract a lot of attention from brokers and wealthy people who consider real estate as good investment prospects.
Not this time. Considering the public outrage against Napoles’ caper, no person of reasonable mental and moral capacity (unless he is a senator or congressman) would dare touch these properties with a 10-foot pole.
They’re too hot to handle and may not be worth the effort based on past experience.
Investigation
Last August, Arnel Manaloto, the lawyer of the principal accused in the Maguidanao massacre case, Andal Ampatuan, Jr., found himself in serious trouble after buying in 2011 eight lots owned by his client.
Upon learning of the sale, the BIR examined Manaloto’s income tax returns to check if, based on his reported income, he has sufficient funds to buy those properties.
The investigation showed that he declared a total income of only P1.495 million in 2011, which was way below the P28 million he reportedly paid for his client’s properties.
Acting on the BIR’s complaint, the justice department filed criminal charges against Manaloto for inaccurate reporting of his income and failure to pay value-added taxes.
A similar fate may await any person or corporation that buys Napoles’ properties. The BIR will surely get wind of the sale because the register of deeds that will process the transfer of title from Napoles to the new buyer will demand a Certificate Authorizing Registration from the BIR.
Without this document, which states that all taxes payable from the sale have been paid, the sale will not be recorded and no new title will be issued to the buyer.
If the BIR smells something fishy with the transaction, e.g., the alleged buyer is a dummy of Napoles or has a shady reputation, expect it to dig deep into its massive computer database to find out everything it can about that buyer.
Any suspicion of violation of tax laws would trigger the filing of a complaint that may result to serious criminal and civil consequences to the “innocent” buyer.
Post review
The issuance of a new title to the buyer of a property suspected to have been purchased with ill-gotten or questionable funds does not guarantee its peaceful or uninterrupted use.
When there is reason to believe a property is part of the proceeds of a crime, or has been used to launder tainted money, or was acquired under unlawful circumstances, the Solicitor General or Ombudsman, depending on the nature of the case, can institute an action for its forfeiture in favor of the government.
While the forfeiture proceedings are ongoing, a notice of lis pendens (meaning, the property is under litigation) may be annotated on the title of the property to warn third parties about such action.
Anybody who buys or leases the property in question takes the risk that if the forfeiture case is favorably decided, the sale or lease may be cancelled or modified at the instance of the Solicitor General or Ombudsman.
The Napoles properties in the US will have a rough ride if they are placed on the auction block.
Last week, the justice department formally asked the US government to freeze these assets while our courts determine whether or not the money used to buy them came from illegal sources.
If the claim is proven, the government can move for the forfeiture of these properties in its favor.
The US rules on money laundering are tough and, unlike our Anti-Money Laundering Council, which is long on form but short on substance, their enforcers give no quarters in the imposition of criminal and civil sanctions on violators.
There have been instances in the past when buyers of properties acquired from laundered funds found themselves accused of complicity in money laundering. The purchase became a one-way ticket to the slammer.
Considering the taint on Napoles’ properties, the beeline of interested buyers, if at all, will be short.
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