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DEPARTMENT OF JUSTICE
OFFICE OF THE CITY PROSECUTOR
MANILA
PHILIP H. PICCIO,
Complainant-Affiant,
AMBASSADOR ALFONSO T.
YUCHENGCO, HELEN YUCHENGCO
DEE, ALFONSO S. YUCHENGCO III,
ALFONSO S. YUCHENGCO, JR.,
YVONNE S. YUCHENGCO, SUSANNE
YUCHENGCO SANTOS, RICARDO K.
CHUA, PORFIRIO S. DE GUZMAN,
JR., JOSE C. DELA CRUZ, FELIX B.
DESIDERIO, JR., MARCELO T. DY,
ERNESTO C. GARCIA, LIWAYWAY F.
GENER, NORMAN N. GONZALEZ,
JOSEPH I. GRIÑO, ARMANDO M.
MEDINA, MARIBEL A. OBIDOS, NILO
ONA, PATRICIO A. PICAZO, GUIA
MARGARITA SANTOS QUA,
EMETERIO ROA, JR., ARMELA
SANTIAGO, MARIA JEANETTE C.
TECSON, SAMUEL V. TORRES, AND
ADELITA A. VERGEL DE DIOS,
Respondents.
x---------------------------------------------------x
COMPLAINT-AFFIDAVIT
1
The Parties
2
4. The identified members of the Board of Directors and officers of
PPI from 1986, when the Company started selling and misrepresenting to the
public that it will assume the risks inherent in its open-ended Traditional
Educational Plans, until the present time when it reneged on its contractual
obligations, are as follows:
the criminal acts described hereunder but whose exact identities and addresses
3
Acts Constituting Violations of
Article 315 Par. 3(a) and Article 315, Par.
2(a) of the Revised Penal Code
6. Article 315, Par. 3 (a) of the Revised Penal Code states that
Swindling or Estafa is committed:
7. In 1986, PPI, through its Directors and Officers, sold its Traditional
Educational Plan (“PEPTRAD”) to the general public. In its Educational Plan
Agreement, PPI represented to the general public that, under its PEPTRAD
policies, it will pay, “irrespective of cost at the time of availment”, the tuition
and standard school fees for enrollment of the scholar, to wit:
1 Education Plan Agreement (Annex “A”), First Paragraph, Section I (“Consideration and
Guarantees”).
4
8. In its plan-agreements, advertisements, product brochures, letterhead
and other printed materials, PPI proudly carried the familiar blue hexagon logo of
the Yuchengco Group of Companies (hereinafter “YGC”) and boldly identified
itself as “a YGC Company”.
11. Relying on PPI’s guarantee that it will pay, irrespective of cost at the
time of availment, the tuition and standard school fees for enrollment of the
scholar, Complainant-Affiant was induced to part with his hard earned money
and purchase one (1) Traditional Educational Plan from PPI on March 2, 1992.
5
12. Complainant-Affiant invested in the PEPTRAD because he dreamt of
giving his child a better future by ensuring that his child receives quality
education. Little did Complainant-Affiant know that, after inveigling him to part
with his hard-earned money, PPI, through its Directors and officers, will now try
to avoid compliance with its contractual obligation to pay for the tuition and other
standard school fees of the beneficiaries of the PEPTRAD plans.
13. Article 315, Par. 2(a) of the Revised Penal Code states that Swindling
or Estafa is committed:
6
15. All the above-mentioned elements are present in the case at bar, thus
warranting the conviction of Respondents for the crime of Syndicated Estafa
under Article 315, Par. 2(a) of the Revised Penal Code, as amended by P.D.
1689.
16. As stated under the Education Plan Agreement, PPI, through its
Directors and officers, guaranteed that it will pay, “irrespective of cost at the
time of availment”, the tuition and other standard school fees for enrollment of
the scholars. This misrepresentation and false pretense that it possesses
power, capacity and capability to assume the risks inherent in its open-ended
Traditional Educational Plans and to honor its contractual obligations thereunder
were made by PPI, through its Directors and officers, prior to or simultaneously
with the commission of the fraud in order to induce Complainant-Affiant and other
planholders to part with their hard-earned money. Complainant-Affiant believed in
PPI’s false pretense that it would assume the risks inherent in its open-ended
Traditional Educational Plans and honor its contractual obligation to shoulder the
tuition and other standard school fees for enrollment of the planholders’ scholars.
7
18. The Education Plan Agreement or PEPTRAD policy itself expressly
guarantees as follows:
19. The policy likewise provided for other benefits, such as cash awards
for scholastic achievement and insurance benefits (Please see Complainant-
Affiant’s PEPTRAD Education Plan Agreement attached hereto as Annex “A”.)
21. Any planholder who failed to pay any installment, regardless of the
reason for such failure to pay, was subjected to the following penalty provisions
of the Education Plan Agreement:
2 Education Plan Agreement (Annex “A”), First Paragraph, Section I (“Consideration and
Guarantees”).
3 Education Plan Agreement (Annex “A”), Section VIII.
8
Furthermore, reinstatement was conditioned upon full payment of all
overdue installments with surcharge from due date at the rate of 18% per
annum.” 4
22. On June 9, 2004, the Board of Directors of PPI, who included some of
the Respondents herein, passed a Board Resolution approving the sale of PPI’s
memorial, pension and fixed educational plans to Lifetime Plans, Inc., in
exchange for shares of stock in said corporation.
9
25. By virtue of the foregoing transfers and misappropriation of funds, trust
funds and assets from PPI to Lifetime Plans, PPI, through its Directors and
Officers, self-engineered its state of “financial distress” and artificially contrived a
“liquidity problem” for PPI to support its Petition for Corporate Rehabilitation and
Suspension of Payments and effectively deny Complainant-Affiant and the other
planholders of their full rights under their Traditional Educational Plans.
26. Thus, on March 31, 2005, the members of the Board of Directors of
PPI, who include some of the Respondents herein, passed a Board Resolution
approving the filing of a Petition for Corporate Rehabilitation with Suspension of
Payments in court. Subsequently, on April 7, 2005, without prior notice to the
planholders, PPI filed said Petition in Special Proceedings No. M-6059 before
Branch 61 of the Regional Trial Court of Makati City. A copy of said Petition is
attached hereto as Annex “E”.
27. In Special Proceedings No. M-6059, PPI, through its Directors and
Officers, seeks to impose upon PEPTRAD planholders a mandatory swap at a
lower yield of seven percent per annum (7% p.a.) to mature and be paid-out
date in the year 2010.
28. This clearly deviates from the agreement of the parties, as stated in
the Educational Plan Agreement (Annex “A”), that “PACIFIC guarantees to pay,
irrespective of cost at the time of availment, the tuition and other standard
school fees for enrollment of the SCHOLAR in the Educational Program
contracted by the PLANHOLDER” 7
29. Thus, after swindling the planholders off their hard-earned money,
PPI, through its Directors and Officers, now tries to avoid compliance with its
contractual obligations. The fraudulent scheme perpetrated by PPI was severely
criticized by SEC on pages 49-55 of its Comment dated May 16, 2005 which it
filed in Special Proceedings No. M-6059, stating: a) that PPI’s Petition for
Corporate Rehabilitation filed before the RTC of Makati City is “part of a pre-
designed plan of Pacific”; b) that “the series of dispositions and acquisitions by
Pacific vis a vis its related companies is a FRAUDULENT SCHEME to keep its
assets away from the reach of the traditional planholders”; and c) that PPI has
been guilty of bad faith in its dealings with SEC and the BIR, to wit:
7 Express guarantee of PPI in the Education Plan Agreement or PEPTRAD policy (Annex
“A”), which PPI itself drafted.
10
“The sequence of actions undertaken by
Pacific prior to its filing of the instant petition plainly
shows that this petition is part of a pre-designed plan
of Pacific to relieve release of its not so profitable
business, which is the traditional education plans…
31. Now, PPI, through its Directors and Officers, conveniently claims that
it can no longer comply with its obligation to “pay, irrespective of cost at the
time of availment, the tuition and standard school fees for enrollment of the
scholar,” to the prejudice of Complainant-Affiant and other planholders who have
religiously complied with their obligation to pay their monthly premiums.
Consequently, Complainant-Affiant suffered actual damage and sleepless nights,
resulting from the non-payment of the full tuition fees and other standard school
fees for School Year 2005-2006.
8 Securities and Exchange Commission COMMENT dated 16 May 2005 (Annex “F), pp. 49-
55.
11
32. While PPI, through its Directors and Officers, claims that it is “illiquid”
and, therefore, needs to suspend payment to its planholders, its own audited
Financial Statements for the Years 2004 and 2005 show otherwise. Indeed,
PPI’s own audited Financial Statements for the Years 2004 and 2005 will show
that PPI is liquid and solvent. They also show that PPI’s Trust Fund has a
positive variance when compared to its Actuarial Reserve Liability, thus evincing
that it has sufficient funds to pay the benefits due its planholders and that it has
sufficient liquid assets to pay the same within the maturity periods of the plans.
A copy of PPI’s 2005 audited Financial Statements (which contain its audited
Financial Statements for the Years 2004 and 2005) is attached hereto as Annex
“D”.
33. That PPI is indeed liquid and solvent is confirmed by no less than the
Securities and Exchange Commission, the supervisory arm of the Philippine
Government, which reported on pages 32-49 of its Comment dated May 16, 2005
filed in Special Proceedings No. M-6059 (a copy of which is attached as Annex
“F” hereof) that:
12
d) “(A)s of December 2004, PPI exceeded its Trust Fund
Liquidity Reserve Requirement by P3,772,485,371.66”. (See
page 33 of SEC’s Comment attached as Annex “F” hereof);
35. Pursuant to the Order dated April 12, 2005 issued by the Court in
Special Proceedings No. M-6059, PPI released tuition support for the first
semester of School Year 2005-2006. Such tuition support, however, fell short of
the full tuition and PPI’s contractual obligation to pay “irrespective of cost at the
time of availment”. Likewise, little or no tuition support was given for the
second semester of school year 2005-2006. Consequently, Complainant-Affiant
suffered actual damage and sleepless nights, resulting from the non-payment of
the full tuition fees and other standard school fees for School Year 2006-2005.
The tuition and other standard school fees for enrollment of the planholders’
13
designated scholars which PPI failed to pay, thus causing damage and prejudice
to herein Complainant-Affiant, are as follows:
A copy of the tuition fee receipt in support of the foregoing is hereto attached and
made an integral part hereof as Annex “I”.
37. Presidential Decree No. 1689 9 (hereinafter “PD 1689”) increases the
penalty of Swindling or Estafa which is committed by a syndicate consisting of
five or more persons. The elements of the crime are as follows:
38. All the above-mentioned elements are present in the case at bar, thus
warranting the application of PD 1689 with the consequent increase in the
penalty to life imprisonment to death.
9 P.D. No. 1689 – Increasing the Penalty for Certain Forms of Swindling or Estafa.
10 Bobis, et al. v. The Provincial Sheriff of Camarinas Norte, G.R. No. L-29838. March 18,
1983.
14
a) As already discussed earlier, Estafa under Article 315 of the
Revised Penal Code has been committed by PPI and
Respondents through their fraudulent representations and
machinations in order to avoid compliance with PPI’s
contractual obligations.
15
brackets who were victimized by the
illegal scheme.” 11
40. Considering that PPI is a corporation, the case of Prudential Bank vs.
IAC 12 clearly states that “It is clear that if the violation or offense is committed by
a corporation, partnership, association or other juridical entities, the penalty shall
be imposed upon the directors, officers, employees or other officials or persons
therein responsible for the offense.”
16