MANILA, Philippines—A former executive of the failed Legacy-owned banks was arrested and arraigned recently in what the Philippine Deposit Insurance Corp. (PDIC) considers a positive development in its long-drawn legal battle with the banking group.
In a statement released on Friday, the PDIC said Alexis S. Petralba, who is accused of syndicated estafa along with other people behind the Legacy Group, was recently nabbed in Tagbilaran City, Bohol, after eluding arrest for years. The Legacy-owned banks were ordered closed by the Bangko Sentral ng Pilipinas three years ago for allegedly stealing millions of pesos from depositors.
Citing police reports, the PDIC added that Petralba was arraigned days ago at a Regional Trial Court in Danao City in Cebu. He is facing charges of syndicated estafa filed by PDIC and the Bangko Sentral ng Pilipinas.
The accused allegedly siphoned off deposits by using fictitious loans applied for by clients who never existed.
The PDIC has spent P11.7 billion to pay deposit insurance in relation to the closure of the Legacy-owned banks. On the other hand, the amount of realizable assets of the closed banks that the PDIC may generate is valued at only P587 million.
“The PDIC is vigorously going after errant bank officers and owners in order to protect the deposit insurance fund and protect the banking system from illegal machinations,” the deposit insurer said in a statement.
PDIC president Valentin A. Araneta said pursuing cases against people behind the Legacy Group and other unscrupulous individuals involved in smaller banking scams is a priority of the PDIC.
He said the deposit insurer is strengthening its legal team to increase the chances of the PDIC’s triumph in its cases against the Legacy Group.
Regulators said the scam involving the Legacy Group is the biggest so far in the history of Philippine banking.