PHILIPPINE DEPOSIT INSURANCE CORPORATION VS.

MANU GIDWANI
G.R. No. 234616, June 20, 2018
VELASCO JR., J.:

Doctrine: Money Laundering

Facts
Pursuant to resolutions of the Monetary Board (MB) of the Bangko Sentral ng Pilipinas
(BSP), rural banks owned and controlled by the Legacy Group of Companies were ordered
closed and thereafter placed under the receivership of Philippine Deposit Insurance Corporation
(PDIC) Respondent Manu, together with his wife Champa Gidwani and eighty-six (86) other
individuals, represented themselves to be owners of four hundred seventy-one (471) deposit
accounts with the Legacy Banks and filed claims with PDIC. The claims were processed and
granted, resulting in the issuance checks in favor of the 86 individuals, excluding the spouses
Gidwani, in the aggregate amount of P98,733,690.21 the individuals did not deposit the crossed
checks in their respective bank accounts. Rather, the face value of all the checks were credited to
a single account with Rizal Commercial Banking owned by Manu. PDIC alleges that it only
discovered the foregoing circumstance when the checks were cleared and returned to it. This
prompted PDIC to conduct an investigation on the true nature of the deposit placements of the 86
individuals. Based on available bank documents, the spouses Gidwani and the 86 individuals
maintained a total of 471 deposit accounts with the different Legacy Banks, were in the names
of helpers and rank-and-file employees of the Gidwani spouses. It is PDIC's contention,
therefore, that the Gidwani spouses and the 86 individuals, with the indispensable cooperation of
RCBC, deceived PDIC into issuing the 683 checks with the total face value of P98,733,690.21.

Issue:
Whether or not there indeed existed an agreement between respondent Manu and the
individual depositors
Ruling:
The petition is meritorious. In resolving the motion for reconsideration lodged with his
office and in exercising jurisdiction, SOJ Caparas has the power and discretion to make his own
personal assessment of the pleadings and evidence subject of review. He is not bound by the
rulings of his predecessors because there is yet to be a final resolution of the issue, the matter is
still pending before his office after all. Respondent seeks to exonerate himself from the charges
by claiming that PDIC was negligent in processing the insurance claims. The proposition,
however, deserves scant consideration. For negligence on the part of the PDIC does not preclude
the commission of fraud on the part of the claimants, and could have even made the agency even
more susceptible to abuse. Respondent did not deny opening and funding some of the accounts
for the individual creditors, and even admitted to receiving advance interests for the subject bank
accounts that were meant for the actual depositors. Anent this contention, it is a matter best left
ventilated during trial proper, where evidence can be presented and appreciated fully. Suffice it
to state for now that the Court herein finds probable cause for estafa and money laundering.
 [G.R. No. 154522. April 2, 2003]
REPUBLIC vs. CABRINI

DOCTRINE: The Court of Appeals has the authority to issue a freeze order as well as to extend
its effectivity. It also has the exclusive jurisdiction to extend existing freeze orders previously
issued by the AMLC vis-à- vis accounts and deposits related to money-laundering activities.
FACTS:
The Anti-Money Laundering Council (AMLC) in the exercise of its power under Section 10 of
RA 9160 issued freeze orders against various bank accounts of respondents. The frozen bank
accounts were previously found prima facie to be related to the unlawful activities of
respondents.
Under RA 9160, a freeze order issued by the AMLC is effective for a period not exceeding 15
days unless extended upon order of the court. Accordingly, before the lapse of the period of
effectivity of its freeze orders, the AMLC filed with the Court of Appeals (CA) various petitions
for extension of effectivity of its freeze orders.
However, the CA disagreed with the AMLC and dismissed the petitions.

ISSUE:
Whether or not the Court of Appeals has jurisdiction to extend the effectivity of a freeze order.

HELD:
YES, the Court of Appeals is the proper court.
The amendment by RA 9194 of RA 9160 erased any doubt on the jurisdiction of the CA over the
extension of freeze orders. As the law now stands, it is solely the Court of Appeals which has the
authority to issue a freeze order as well as to extend its effectivity. It also has the exclusive
jurisdiction to extend existing freeze orders previously issued by the AMLC vis-à- vis accounts
and deposits related to money-laundering activities.
 Ligot vs. Republic
G.R. No. 176944 March 6, 2013
BRION, J.:

DOCTRINE: The effectivity of a freeze order may be extended by the CA for a period not
exceeding six months. Before or upon the lapse of this period, ideally, the Republic should
have already filed a case for civil forfeiture against the property owner with the proper courts
and accordingly secure an asset preservation order or it should have filed the necessary
information.Otherwise, the property owner should already be able to fully enjoy his property
without any legal process affecting it.
FACTS:
Lt. Gen. Ligot declared in his SALN that as of 2003, he had assets in the total amount of
almost 4m, in contrast, his declared assets in his 1982 SALN amounted to only 105k.
Ombudsman’s investigation revealed that Lt. Gen. Ligot and his family had other properties and
bank accounts, not declared in his SALN, amounting to at least 54m. These were declared to be
illegally obtained and unexplained wealth, pursuant to the provisions of RA No. 1379 (An Act
Declaring Forfeiture in Favor of the State Any Property Found to Have Been Unlawfully
Acquired by Any Public Officer or Employee and Providing for the Proceedings Therefor). On
July 27, 2005, the Republic, represented by the Anti-Money Laundering Council (AMLC), filed
an Urgent Ex-Parte Application for the issuance of a freeze order with the CA against certain
monetary instruments and properties of the petitioners, pursuant to Section 104 of RA 9160,
(Anti-Money Laundering Act of 2001).
Accordingly, the CA issued a freeze order against the Ligots’ and Yambao’s various bank
accounts, web accounts and vehicles, valid for a period of 20 days from the date of issuance, the
CA extended the freeze order over the Ligots’ various bank accounts and personal properties
"until after all the appropriate proceedings and/or investigations being conducted are
terminated."
ISSUE:
Whether or not a freeze order may be issued for an indefinite period
RULING:
As a rule, the effectivity of a freeze order may be extended by the CA for a period not exceeding
six months. Before or upon the lapse of this period, ideally, the Republic should have already
filed a case for civil forfeiture against the property owner with the proper courts and accordingly
secure an asset preservation order or it should have filed the necessary information. Otherwise,
the property owner should already be able to fully enjoy his property without any legal process
affecting it. However, should it become completely necessary for the Republic to further extend
the duration of the freeze order, it should file the necessary motion before the expiration of the
six-month period and explain the reason or reasons for its failure to file an appropriate case and
justify the period of extension sought. The freeze order should remain effective prior to the
resolution by the CA, which is hereby directed to resolve this kind of motion for extension with
reasonable dispatch.
4 REINA
 Subido Pagente Certeza Mendoza And Binay Law Offices

vs

The Court Of Appeals, Hon. Andres B. Reyes, Jr., In His Capacity As Presiding Justice Of
The Court Of Appeals, And The Anti-Money Laundering Council, Represented By Its
Members, Hon. Amando M. Tetangco, Jr., Governor Of The Bangko Sentral Ng Pilipinas,
Hon. Teresita J. Herbosa, Chairperson Of The Securities And Exchange Commission, And
Hon. Emmanuel F. Dooc, Insurance Commissioner Of The Insurance Commission

EN BANC; G.R. No. 216914, December 06, 2016; PEREZ, J.:

Doctrine: Section 11 of the AMLA has three elements: (1) ex-parte application by the AMLC;
(2) determination of probable cause by the CA; and (3) exception of court order in cases
involving unlawful activities defined in the law. Such provision is valid and constitutional.

Facts:

In 2015, reports abounded on the disproportionate wealth of then Vice President Jejomar
Binay and the rest of his family. Petitioner law firm of Subido Pagente Certeza Mendoza &
Binay Law Firm (SPCMB) was also investigated. The Office of the Ombudsman and the Senate
conducted investigations. On said regard, the Anti-Money Laundering Council (AMLC) filed
with the Court of Appeals (CA) an ex-parte application for inquiry into certain bank deposits and
investments, including related accounts based on probable cause, by virtue of Section 11 of
Republic Act (R.A.) No. 9160. The constitutionality of the said provision was thus challenged in
this case.

Issue: Whether or not the anti-money laundering act is unconstitutional

Ruling:

No. The Supreme Court ruled that the law is constitutional. The authority to inquire into
or examine the main account and the related accounts shall comply with the requirements of due
process clause. The right to due process has two aspects: (1) substantive and (2) procedural. As
presently worded, Section 11 of the AMLA has three elements: (1) ex-parte application by the
AMLC; (2) determination of probable cause by the CA; and (3) exception of court order in cases
involving unlawful activities defined in the law. Such requirements are present in the instant
case. Further, the provision is not violative of right to privacy. As a general rule, although bank
deposits are within protection of zones of privacy, one of the recognized exemptions is when
there is violation of Section 8 of R.A. Act No. 3019, the Anti-Graft and Corrupt Practices Act,
such as this case.

Dispositive: The Supreme Court denied the petition and ruled that Section 11 of Republic Act
No. 9160, as amended, is valid and constitutional.