RCBC taken to LA court over claims of fraud

THE RCBC Plaza. INQUIRER FILE PHOTO

MANILA, Philippines–Rizal Commercial Banking Corp. (RCBC) will soon go up against a small Dutch company, Verotel Merchant Services, in a Los Angeles court to fend off fraud charges that happened nearly a decade ago.

RCBC on Tuesday described in a statement Verotel’s accusations to be a mere ploy to extort a settlement from the bank.

But according to Joost Zuurbier, CEO of the Amsterdam-based company, Verotel is a “David” to RCBC’s financial “Goliath” in a legal battle that could result in as much as $30 million in damages.

In the lawsuit it filed in California, Verotel claimed that when RCBC and Bankard were processing credit cards from 2004 to 2006, they paid the wrong beneficiaries.

RCBC is a unit of the Yuchengco group, while Bankard used to be a subsidiary of the bank.

In 2006, Verotel said, Bankard failed to wire money from credit card payments to online merchants. Instead, the companies wired these funds to other companies and individuals some of whom seem to have had very close connections to Bankard.

Verotel filed the claims in California where RCBC and Verotel have a large customer footprint. The Los Angeles court agreed to assert jurisdiction in California over both Rizal and Bankard, the Dutch firm said.

In a statement, RCBC said the lawsuit was wholly without merit.

“The case … involves common commercial Internet transactions that occurred over a decade ago,” RCBC said in an e-mail to the Inquirer.

RCBC said that the contract at issue was with a Filipino corporation, not with a Dutch company.

“The inflammatory language in Verotel’s press release, as well as the fact that it was issued on the eve of trial more than three years after the case was commenced, demonstrate that it is an extortive attempt by Verotel to secure a settlement,” it added.