SUBIDO, PAGENTE, CERTEZA, MENDOZA, AND BINAY LAW OFFICES VS COURT OF APPEALS

GR No. 216914 (2016)

FACTS: SPCMB files for Petition for Certiorari and Prohibition on the Constitutionality of Section 11 of RA 9160
(AMLA).

One year before the 2016 elections, reports surfaced of alleged ill-gotten wealth by VP Binay and family.
Investigations by Ombudsman were conducted.

News reports from various new sources, including The Manila Times, announce of possible inquiry over the
accounts of Binay.

SPCMB tries to confirm this with the CA. The CA refused to comment, alleging the confidentiality of the case.

Eventually, The Manila Times report the CA’s issuance of the order allowing inquiry.

Q1: SPCMB authorized an associate to inquire on the veracity of a report that the AMLC asked the CA to allow it to
peep into the bank accounts of the Binays, their corporations, and a law office where a family member was once a
partner. He authorized to secure copies of relevant document like the petition and order issued if any. The
newspaper later in reported that the CA issued a resolution granting ex-parte the application of the AMLC to
examine the bank accounts of SPCMB. Petitioner then filed directly with the SC a Petition for Certiorari and
Prohibition contending that AMLA is unconstitutional as it allows examination of a bank account without any notice
to the offended party; Hence, it violates the right to due process and the right to privacy. Rule on the contentions
and explain.

A1: No, we do not subscribe to SPCMB’s position. Succinctly, Sec. 11 of AMLA providing for ex-parte application
and inquiry by the AMLC into certain bank deposits and investments does not violate substantive due process, there
being no physical seizure of property involved at that stage. It is the preliminary and actual seizure of the bank
deposits or investments in question which brings these within the reach of judicial process.

In fact, the Eugenio case delineates a bank inquiry order under Sec. 11 from a freeze order under Sec. 10 on both
remedies’ effect on the direct objects, i.e. the bank deposits and investments:

“A bank inquiry order under Section 11 does not necessitates any form of physical seizure of property of the account
holder. What the bank inquiry order authorizes is the examination of the particular deposits or investments in
banking institutions or non-bank financial institutions. The monetary instruments or property deposited with such
banks or financial institutions are not seized in a physical sense, but are examined on particular details such as the
account holder’s details record of deposits and transactions. Unlike the assets subject of the freeze order, the
records to be inspected under a bank inquiry order cannot be physically seized or hidden by the account holder.
Said records are in possession of the bank and therefore cannot be destroyed at the instance of the account holder
alone as that would require the extraordinary cooperation and devotion of the bank.”

Q2: SPCMB also contends that the inquiry intrudes into the privacy of the owner of the account. Rule on the
contention and explain.

A2: The contention was not correct. While an ex-parte proceeding authorizing the government to inspect certain
bank accounts or investments without notice to the depositor would have significant implications on the right to
privacy still does not preclude such inquiry order to be allowed by specific legislation as an exception to the general
rule of absolute confidentiality of bank deposits.

1. The AMLC is required to establish probable cause as basis for its ex-parte application for bank inquiry
order;
2. The CA, independent of the AMLC’s demonstration of probable cause, itself makes a finding of
probable cause that the deposits or investments are related to an unlawful activity under Sec. 3(i) or a
money laundering offense under Sec. 4 of the AMLA;
3. A bank inquiry court order ex-parte for related accounts is preceded by a bank inquiry court order
ex-parte for the principal account which court order ex-parte for related accounts is separately based on
probable cause that such related account is materially linked to the principal account inquired into; and
4. Authority to inquire into or examine the main or principal account and the related accounts shall comply with
the requirements of Article III, Sections 2 and 3 of the Constitution. The foregoing demonstrates that the
inquiry and examination into the bank account are not undertaken whimsically and solely based on the
investigative discretion of the AMLC. In particular, the requirement of demonstration by the AMLC, and
determination by the CA, of probable cause emphasizes the limits of such governmental action. We will
revert to these safeguards under Section 11 as we specifically discuss the CA’s denial of SPCMB’s letter
request for information concerning the purported issuance of a bank inquiry order involving its accounts.

In sum, the SC affirms the constitutionality of Section 11 of the AMLA allowing the ex-parte application by the AMLC
for authority to inquire into, and examine, certain bank deposits and investments.
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RET. LT. GEN. JACINTO C. LIGOT, ERLINDA Y. LIGOT, PAULO Y. LIGOT, RIZA Y. LIGOT, and MIGUEL Y. LIGOT
vs. REPUBLIC, represented by the AMLC
GR No. 176944 (March 6, 2013)

FACTS: Republic filed an Urgent Ex-Parte Application for the issuance of a freeze order with the CA against certain
monetary instruments and properties of Ligot, et al. The application was based on a letter from the Office of the
Ombudsman recommending that the latter conduct an investigation on Lt. Gen. Ligot and his family for possible violation
of RA No. 9160. The Ombudsman attached the Complaint it filed against the Ligots for perjury under Article 183 of the
RPC, and for violations of Section 8 of RA 6713 and RA 3019.

The Ombudsman’s complaint alleges that Ligot served in the AFP for 33 years and 2 months as a cadet until his
retirement. He and his wife have four children.

Ligot declared in his Statement of Assets, Liabilities, and Net Worth (SALN) that as of 31 December 2003, he had assets
in the total amount of P3.848M. In contrast, his declared assets in his 1982 SALN amounted to only P105K.

Aside from these declared assets, the Ombudsman’s investigation revealed that Ligot and his family had other properties
and bank accounts, not declared in his SALN, amounting to at least P54M.

Given that Ligot’s main source of income was his salary as an officer of the AFP and his wife and children’s lack of any
other substantial sources of income, the Ombudsman declared the assets registered in Ligot’s name, as well as those in
his wife’s and children’s names, 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).

The investigation also looked into Mrs. Ligot’s younger brother, Edgardo Tecson Yambao, and it was found that Yambao
acted as a dummy of the Ligot spouses, and all the properties registered in Yambao’s name actually belong to the Ligot
family.

Compliance and Investigation staff (CIS) of the AMLC conducted a financial investigation, which revealed the existence of
the Ligots’ various bank accounts with several financial institutions. The Ombudsman for the Military and Other Law
Enforcement Officers issued a resolution holding that probable cause exists that Lt. Gen. Ligot violated Section 8, in
relation to Section 11, of RA No. 6713, as well as Article 183 of the RPC.

On 25 May 2005, AMLC issued Resolution No. 52, directing the Executive Director of the AMLC Secretariat to file
an application for a freeze order against the properties of Lt. Gen. Ligot and the members of his family with the
CA. Subsequently, on 27 June 2005, Republic filed an Urgent Ex-Parte Application with the appellate court for the
issuance of a Freeze Order against the properties of the Ligots and Yambao.

The appellate court granted the application, ruling that probable cause existed that an unlawful activity and/or money
laundering offense had been committed by Ligot and his family, including Yambao, and that the properties sought to be
frozen are related to the unlawful activity or money laundering offense. 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.

On 26 July 2005, Republic filed an Urgent Motion for Extension of Effectivity of Freeze Order, arguing that if the
bank accounts, web accounts and vehicles were not continuously frozen, they could be placed beyond the reach of law
enforcement authorities and the government’s efforts to recover the proceeds of the Ligots’ unlawful activities would be
frustrated. In support of its motion, it informed the CA that the Ombudsman was presently investigating cases involving
the Ligots.

Finding merit in the Republic’s arguments, CA granted the motion extending the freeze order until after all the
appropriate proceedings and/or investigations have been terminated.

The Ligots filed a motion to lift the extended freeze order and further argued that the extension not only deprived them of
their property without due process; it also punished them before their guilt could be proven. The motion was denied.

Meanwhile on 15 November 2005, the "Rule of Procedure in Cases of Civil Forfeiture, Asset Preservation, and Freezing
of Monetary Instrument, Property, or Proceeds Representing, Involving, or Relating to an Unlawful Activity or Money
Laundering Offense under Republic Act No. 9160, as Amended" (Rule in Civil Forfeiture Cases) took effect. Under this
rule, a freeze order could be extended for a maximum period of six months.

The Ligots filed a motion for reconsideration, insisting that the freeze order should be lifted considering: (a) no predicate
crime has been proven to support the freeze order’s issuance; (b) the freeze order expired six months after it was issued
on July 5, 2005; and (c) the freeze order is provisional in character and not intended to supplant a case for money
laundering. This motion was also denied.

Ligot filed for certiorari arguing that the appellate court committed grave abuse of discretion amounting to lack or excess
of jurisdiction when it extended the freeze order issued against him and his family even though no predicate crime had
been duly proven or established to support the allegation of money laundering. He also maintains that the freeze order
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issued against them ceased to be effective in view of the 6-month extension limit of freeze orders provided under the Rule
in Civil Forfeiture Cases. The CA, in extending the freeze order, not only unduly deprived him and his family of their
property, in violation of due process, but also penalized them before they had been convicted of the crimes they stand
accused of.

HELD: Court finds merit in the petition.

Probable cause exists to support the issuance of a freeze order

The Ligots’ argument is founded on a flawed understanding of probable cause in the context of a civil forfeiture
proceeding or freeze order application.

Based on Section 10 of RA 9160, amended by RA 9194, there are only two requisites for the issuance of a freeze
order: (1) the application ex parte by the AMLC and (2) the determination of probable cause by the CA. The
probable cause required for the issuance of a freeze order differs from the probable cause required for the institution of a
criminal action, and the latter was not an issue before the CA nor is it an issue before us in this case.

The CA’s statutorily-guided determination’s focus is not on the probable commission of an unlawful activity (or money
laundering) that the Office of the Ombudsman has already determined to exist, but on whether the bank accounts, assets,
or other monetary instruments sought to be frozen are in any way related to any of the illegal activities enumerated under
RA No. 9160, as amended. Otherwise stated, probable cause refers to the sufficiency of the relation between an
unlawful activity and the property or monetary instrument which is the focal point of Section 10 of RA No. 9160,
as amended.

A freeze order can be issued upon the AMLC’s ex parte application further emphasizes the law’s consideration of how
critical time is in these proceedings. As we previously noted in Republic v. Eugenio, Jr., "to make such freeze order
anteceded by a judicial proceeding with notice to the account holder would allow for or lead to the dissipation of such
funds even before the order could be issued."

It should be noted that the existence of an unlawful activity that would justify the issuance and the extension of the freeze
order has likewise been established in this case.

From the ex parte application and the Ombudsman’s complaint, we glean that Lt. Gen. Ligot himself admitted that his
income came from his salary as an officer of the AFP. Yet, the Ombudsman’s investigation revealed that the bank
accounts, investments and properties in the name of Lt. Gen. Ligot and his family amount to more than Fifty-Four Million
Pesos (₱54,000,000.00). Since these assets are grossly disproportionate to Lt. Gen. Ligot’s income, as well as the lack of
any evidence that the Ligots have other sources of income, the CA properly found that probable cause exists that these
funds have been illegally acquired. On the other hand, the AMLC’s verified allegations in its ex parte application, based on
the complaint filed by the Ombudsman against Ligot and his family for violations of the Anti-Graft and Corrupt Practices
Act, clearly sustain the CA’s finding that probable cause exists that the monetary instruments subject of the freeze order
are related to, or are the product of, an unlawful activity.

A freeze order, however, cannot be issued for an indefinite period

A freeze order is an extraordinary and interim relief issued by the CA to prevent the dissipation, removal, or disposal of
properties that are suspected to be the proceeds of, or related to, unlawful activities as defined in Section 3(i) of RA No.
9160, as amended. The primary objective of a freeze order is to temporarily preserve monetary instruments or
property that are in any way related to an unlawful activity or money laundering, by preventing the owner from
utilizing them during the duration of the freeze order. The relief is pre-emptive in character, meant to prevent the
owner from disposing his property and thwarting the State’s effort in building its case and eventually filing civil forfeiture
proceedings and/or prosecuting the owner.

… to otherwise leave the grant of the extension to the sole discretion of the CA, which may extend a freeze order
indefinitely or to an unreasonable amount of time – carries serious implications on an individual’s substantive right to due
process. This right demands that no person be denied his right to property or be subjected to any governmental action
that amounts to a denial. The right to due process, under these terms, requires a limitation or at least an inquiry on
whether sufficient justification for the governmental action.

… 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.

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REPUBLIC, represented by AMLC vs. HON. EUGENIO, JR., PANTALEON ALVAREZ, and LILIA CHENG.
GR No. 174629 (February 14, 2008)

FACTS: A series of investigations concerning the award of the NAIA 3 contracts to PIATCO were undertaken by the
Ombudsman and the Compliance and Investigation Staff (CIS) of petitioner Anti-Money Laundering Council (AMLC). The
CIS conducted an intelligence database search on the financial transactions of certain individuals involved in the award,
including respondent Pantaleon Alvarez (Alvarez) who had been the Chairman of the PBAC Technical Committee, NAIA-
IPT3 Project; Wilfredo Trinidad; Alfredo Liongson; and Cheng Yong. The AMLC issued Resolution No. 75, Series of 2005,
whereby the Council resolved to authorize the Executive Director of the AMLC "to sign and verify an application to inquire
into and/or examine the [deposits] or investments of the mentioned individuals, and their related web of accounts.

Under the authority granted by the Resolution, the AMLC filed an application to inquire into or examine the deposits or
investments of Alvarez, Trinidad, Liongson and Cheng Yong before the RTC of Makati, Branch 138. The Court issued an
order granting inquiry, and the CIS proceeded to inquire and examine the deposits, investments and related web accounts
of the four.

Meanwhile, the Special Prosecutor of the Office of the Ombudsman, Dennis Villa-Ignacio, wrote a letter, requesting the
AMLC to investigate the accounts of Alvarez, PIATCO, and several other entities involved in the nullified contract.
Attaching a memorandum "on why the investigation of the [accounts] is necessary in the prosecution of the above criminal
cases before the Sandiganbayan."

The letter adverted to probable cause to believe that the bank accounts were used in the commission of unlawful activities
that were committed in relation to the criminal cases then pending before the Sandiganbayan. Attached to the letter was a
memorandum on why the investigation of the [accounts] is necessary in the prosecution of the above criminal cases
before the Sandiganbayan. The AMLC promulgated on 9 December 2005 Resolution No. 121 Series of 2005 which
authorized the executive director of the AMLC to inquire into and examine the accounts named in the letter, including one
maintained by Alvarez with DBS Bank and two other accounts in the name of Cheng Yong with Metrobank. Cheng Yong
refused to have the account examined on ground of the Bank Secrecy Act.

HELD: Because of the Bank Secrecy Act, the confidentiality of bank deposits remains a basic state policy in the
Philippines. Subsequent laws, including the AMLA, may have added exceptions to the Bank Secrecy Act, yet the secrecy
of bank deposits still lies as the general rule. It falls within the zones of privacy recognized by our laws. The framers of the
1987 Constitution likewise recognized that bank accounts are not covered by either the right to information under Section
7, Article III or under the requirement of full public disclosure under Section 28, Article II. Unless the Bank Secrecy Act is
repealed or amended, the legal order is obliged to conserve the absolutely confidential nature of Philippine bank deposits.

Any exception to the rule of absolute confidentiality must be specifically legislated. Section 2 of the Bank Secrecy Act itself
prescribes exceptions whereby these bank accounts may be examined by any person, government official, bureau or
official; namely when: (1) upon written permission of the depositor; (2) in cases of impeachment; (3) the examination of
bank accounts is upon order of a competent court in cases of bribery or dereliction of duty of public officials; and (4) the
money deposited or invested is the subject matter of the litigation. Section 8 of RA 3019, the Anti-Graft and Corrupt
Practices Act, has been recognized by this Court as constituting an additional exception to the rule of absolute
confidentiality, and there have been other similar recognitions as well.

The AMLA also provides exceptions to the Bank Secrecy Act. Under Section 11, the AMLC may inquire into a bank
account upon order of any competent court in cases of violation of the AMLA, it having been established that there is
probable cause that the deposits or investments are related to unlawful activities as defined in Section 3(i) of the law, or a
money laundering offense under Section 4 thereof. Further, in instances where there is probable cause that the deposits
or investments are related to kidnapping for ransom, certain violations of the Comprehensive Dangerous Drugs Act of
2002, hijacking and other violations under RA 6235, destructive arson and murder, then there is no need for the AMLC to
obtain a court order before it could inquire into such accounts.

Nevertheless, just because the AMLA establishes additional exceptions to the Bank Secrecy Act it does not mean that the
later law has dispensed with the general principle established in the older law that "[a]ll deposits of whatever nature with
banks or banking institutions in the Philippines x x x are hereby considered as of an absolutely confidential nature."
Indeed, by force of statute, all bank deposits are absolutely confidential, and that nature is unaltered even by the
legislated exceptions referred to above. There is disfavor towards construing these exceptions in such a manner that
would authorize unlimited discretion on the part of the government or of any party seeking to enforce those exceptions
and inquire into bank deposits. If there are doubts in upholding the absolutely confidential nature of bank deposits against
affirming the authority to inquire into such accounts, then such doubts must be resolved in favor of the former. Such a
stance would persist unless Congress passes a law reversing the general state policy of preserving the absolutely
confidential nature of Philippine bank accounts.

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REPUBLIC, represented by the AMLC vs. GLASGOW CREDIT AND COLLECTION SERVICES, INC. and
CITYSTATE SAVINGS BANK, INC.
G.R. No. 170281 (January 18, 2008)

FACTS: Republic filed a complaint in the RTC Manila for civil forfeiture of assets (with urgent plea for issuance
of TRO and/or writ of preliminary injunction) against the bank deposits maintained by Glasgow in Citystate
Savings Bank, Inc. The case was filed pursuant to RA 9160, as amended.

RTC Manila issued a 72-hour TRO. The case was thereafter raffled to Branch 47 and the hearing on the
application for issuance of a writ of preliminary injunction was set on August 4, 2003.

After hearing, the trial court issued an order granting the issuance of a writ of preliminary injunction. The
injunctive writ was issued on August 8, 2003.

Meanwhile, summons to Glasgow was returned "unserved" as it could no longer be found at its last known
address.

On August 12, 2005, the OSG received a copy of Glasgow’s "Motion to Dismiss (By Way of Special
Appearance)", alleging that the complaint was premature and stated no cause of action as there was still no
conviction for estafa or other criminal violations implicating Glasgow among other grounds.

The Republic opposed Glasgow’s motion to dismiss. It contended that its suit was an action quasi in rem
where jurisdiction over the person of the defendant was not a prerequisite to confer jurisdiction on the court. It
asserted that prior conviction for unlawful activity was not a precondition to the filing of a civil forfeiture case
and that its complaint alleged ultimate facts sufficient to establish a cause of action. It denied that it failed to
prosecute the case.

Trial court issued an order dismissing the case and lifted the writ of preliminary injunction and directed CSBI to
release to Glasgow or its authorized representative the funds in the account.

Republic filed a petition for review of the order issued by the Trial Court.

HELD: Court agrees with the Republic.

RA 9160, as amended, and its implementing rules and regulations lay down two conditions when applying for
civil forfeiture:

(1) when there is a suspicious transaction report or a covered transaction report deemed suspicious after
investigation by the AMLC; and
(2) the court has, in a petition filed for the purpose, ordered the seizure of any monetary instrument or
property, in whole or in part, directly or indirectly, related to said report.

It is the preliminary seizure of the property in question which brings it within the reach of the judicial process. It
is actually within the court’s possession when it is submitted to the process of the court. The injunctive writ
issued on August 8, 2003 removed account no. CA-005-10-000121-5 from the effective control of either
Glasgow or CSBI or their representatives or agents and subjected it to the process of the court.

Since account no. CA-005-10-000121-5 of Glasgow in CSBI was (1) covered by several suspicious transaction
reports and (2) placed under the control of the trial court upon the issuance of the writ of preliminary injunction,
the conditions provided in Section 12(a) of RA 9160, as amended, were satisfied. Hence, the Republic,
represented by the AMLC, properly instituted the complaint for civil forfeiture.

Whether or not there is truth in the allegation that account no. CA-005-10-000121-5 contains the proceeds of
unlawful activities is an evidentiary matter that may be proven during trial. The complaint, however, did not
even have to show or allege that Glasgow had been implicated in a conviction for, or the commission of, the
unlawful activities of estafa and violation of the Securities Regulation Code.

A criminal conviction for an unlawful activity is not a prerequisite for the institution of a civil forfeiture
proceeding. Stated otherwise, a finding of guilt for an unlawful activity is not an essential element of
civil forfeiture.

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REPUBLIC, represented by the AMLC vs. CABRINI GREEN & ROSS, INC., MICHAEL J. FINDLAY and
JANE GELBERG
G.R. No. 154522 (May 5, 2006)

REPUBLIC, represented by the AMLC vs. R.A.B. REALTY, INC., MULTINATIONAL TELECOM
INVESTORS CORPORATION, ROSARIO A. BALADJAY and SATURNINO M. BALADJAY
G.R. No. 154694 (May 5, 2006)

REPUBLIC, represented by the AMLC vs. MISA, LAFUENTE, SILVERIO, NICHOLAS and JAO
G.R. No. 155554 (May 5, 2006)

REPUBLIC, represented by the AMLC vs. DE LOS REYES, CASTRO, DE VERA, LAZO and LIWAG
G.R. No. 155711 (May 5, 2006)

FACTS: AMLC 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.

AMLC invoked the jurisdiction of the CA in the belief that the power given to the CA to issue a TRO or writ of
injunction against any freeze order issued by the AMLC carried with it the power to extend the effectivity of a
freeze order. In other words, the AMLC interpreted the phrase "upon order of the court" to refer to the CA.

However, the CA disagreed with the AMLC and dismissed the petitions. It uniformly ruled that it was not vested
by RA 9160 with the power to extend a freeze order issued by the AMLC.

ISSUE: Which court has jurisdiction to extend the effectivity of a freeze order?

HELD: The cases were remanded to CA, pursuant to RA 9194, amending RA 9160.

During the pendency of these petitions, Congress enacted RA 9194 (An Act Amending Republic Act No. 9160,
Otherwise Known as the "Anti-Money Laundering Act of 2001").It amended Section 10 of RA 9160 as follows:

SEC. 7. Section 10 of [RA 9160] is hereby amended to read as follows:

SEC. 10. Freezing of Monetary Instrument or Property. – The Court of Appeals, upon application ex
parte by the AMLC and after determination that probable cause exists that any monetary instrument or
property is in any way related to an unlawful activity as defined in Sec. 3(i) hereof, may issue a freeze order
which shall be effective immediately. The freeze order shall be for a period of twenty (20) days unless
extended by the court. (emphasis supplied)

Section 12 of RA 9194 further provides:

SEC 12. Transitory Provision. – Existing freeze orders issued by the AMLC shall remain in force for a
period of thirty (30) days after the effectivity of this Act, unless extended by the Court of Appeals.
(emphasis supplied)

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 CA 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.