11/01 - The SEC in the Philippines is readying
criminal charges and a cease-and-desist order against Price
Richardson Corp. which is accused of engaging in boiler
The company was registered as an administrative services company
which handles clerical work, bookkeeping, mailing and billing and
not as a stockbroker which employed 22 unlicensed salesmen, mostly
British and Canadians.
Their Anti-Money-Laundering Council (AMLC) has ordered five banks
to freeze deposits connected with Price Richardson Corp. after
authorities raided six offices of theirs in three buildings. Documents
found in the raid pointed to Consuelo Velarde-Albert aka Connie
Albert as the company's head.
This is the sixth company found to have engaged in boil room operations
their this year. The other five were Mendez Prior, Dukes and Co.
Inc., Evergreen, Barclays and the Goldberg.
Twenty other suspect corporations named in an SEC report include
Dukes & Co. Securities Inc., Muller & Sons Securities Mgt.,
Saxon & Swift Inc., Knowle & Sachs Inc., First Federal
Capital, Morgan Lynch United Resources Marketing, Pryce Weston
Inc., FFCI Marketing & Dev., Bradshaw Global Asset Management
Inc., Wells Chadwick Inc., Comsat International, Worldwide Investors
Management Inc., United Capital Management, Newport Pacific Securities & Management,
Interloop Marketing Services Inc., Freelander & Kuhn Inc.,
United Resources Asset Mgt., Westwood Management, Sherman Bros.
Mgt. Ltd., Bradford-Kempner Management Services Inc., and Barnes
Marketing Concept Inc.
05/23/2003 Court of Appeals precedent setting decision on its
jurisdiction over freeze orders Republic of the Philippines
COURT OF APPEALS
SPECIAL TWELFTH DIVISION
THE REPUBLIC OF THE PHILIPPINES,
THROUGH THE ANTIMONEY
LAUNDERING COUNCIL (AMLC)
represented by AMLC EXECUTIVE
DIRECTOR PIO C. GUERRERO,
PRICE RICHARDSON CORP.,
MS. CONSUELO VELARDE ALBERT
and MR. GORDON RESNICK,
CA-G.R. SP No. 67974
ASUNCION, E. J., Acting Chairman
*DEL CASTILLO, M. and
SUNDIAM, E. JJ.:
Apr. 30, 2002
ASUNCION, EJ., J.:
Before Us is a petition filed pursuant to Republic Act 9160, otherwise
known as the Anti-Money Laundering Act of 2001. Petitioner prays
for the extension of the freeze orders issued against several bank
accounts in the names of the respondents, to wit:
Hong Kong and Shanghai Bank
China Banking Corp.,
(Paseo de Roxas)
Price Richardson Corp.
Citibank-Paseo de Roxas
Consuelo Velarde Albert
Respondent Price Richardson Corporation was organized for the purpose
of providing administrative services including, but not limited to, furnishing
all necessary and incidental clerical, bookkeeping, mailing and billing
Pursuant to three (3) search warrants issued by the Regional Trial
Court of Makati City-Branch 43 after finding probable cause for
violation of Section 28 of R.A. 8799 (The Securities Regulation
Code), on November 16, 2001, agents from the National Bureau of
Investigation (NBI) and the Securities and Exchange Commission
(SEC) served the aforementioned three (3) search warrants on Price
Richardson Corporation (501 and 502 of Pearlbank Center, 146 Valero
St., Salcedo Village, Makati City); Connie Albert and/or
personnel or occupants of Price Richardson Corporation (31st Flr.
Citibank Tower, Makati Avenue, Makati City); and Ernest
Hathaway, Anne Benwick and/or personnel
or occupants of Capital International Consultants, Inc.
(Rms. 407 and 809, Peninsula Court, Makati Avenue, Makati City).
On the occasion of searching the said premises, the raiding team
seized several documents including false buy-sell confirmation
slips, stock quotations, brokers’ scripts, lists of fictitious
names used by brokers/salesmen with their corresponding real names,
and other documents which would indicate that respondents are engaged
in fraudulent buying and selling of securities in violation of
Section 28 of R.A. No. 8799.
Furthermore, the raiding team seized documents pertaining to bank
accounts of Price Richardson Corporation, Consuelo Velarde Albert
and Gordon Resnick.
Thereafter, on November 19, 2001, Atty. Jose Tomas C. Syquia of
the SEC Compliance and Enforcement Department requested the Anti-Money
Laundering Council (AMLC) for the issuance of a freeze order on
the subject bank accounts in the name of the respondents on the
probability that such were being used to channel the proceeds of
Having found probable cause that these were related to an unlawful
activity proscribed in Section 3 (i) (13) of R.A. 9160, the AMLC
issued Resolution No. 011 directing the immediate issuance and
service of freeze order on the said bank accounts in accordance
with Section 10 of R.A. 9160. The freeze orders issued under freeze
order case docketed as AMLC Case No. FO-001, were served on the
concerned banks on November 20, 2001.
Respondent Consuelo Velarde Albert’s Explanation with Motion
to Lift Freeze Order filed before the AMLC on November 23, 2001,
was denied for lack of merit on November 26, 2001. However, inasmuch
as the fifteen-day period of subject freeze orders was to end on
December 4, 2001, the AMLC filed this petition praying that the
freeze orders be extended.
The novel question confronting this Court is whether or not it
has the jurisdiction to resolve this petition and grant the extension
of such freeze orders as prayed for by the petitioner.
We are not called upon to decide the merits of a case for money laundering
or whether there exists probable cause in this case. The law being relatively
new, there is a need to interpret Section 10 of R.A. 9160, which provides:
"Sec. 10 Authority to Freeze –Upon determination that
probable cause exists that any deposit or similar account is in
any way related to an unlawful activity, the AMLC may issue a freeze
order, which shall be effective immediately, on the account for
a period not exceeding fifteen (15) days. xxx
The fifteen (15)-day freeze order of the AMLC may be extended
upon order of the court, provided that the fifteen (15)-day period
shall be tolled pending, the court’s decision to extend the
No court shall issue a temporary restraining order or writ of injunction
against any freeze order issued by the AMLC except the Court of Appeals
or the Supreme Court." (Underscoring supplied).
The question arises as to which court this provision refers to with regard
to extensions of the fifteen (15)-day period for such freeze orders.
Respondent Consuelo Velarde Albert opposed the instant petition
and filed a motion to dismiss on the ground that this Court has
no jurisdiction to hear and decide the instant petition. Respondent
claims that under Section 5 of R.A. 9160, it is the Regional Trial
Court which has jurisdiction to try all cases on money laundering,
"Sec. 5 Jurisdiction of Money Laundering Cases –The
regional trial courts shall have jurisdiction to try all cases
on money laundering. Those committed by public officers and private
persons who are in conspiracy with such public officers shall be
under the jurisdiction of the Sandiganbayan.
Respondent would stress that freeze orders, and any extension
thereof, issued pursuant to Section 10 of R.A. 9160 are mere adjuncts
to money laundering cases and said freeze orders are precisely
issued preparatory to money laundering cases. Thus, being a preparatory
remedy, the jurisdiction to issue the same is and should allegedly
be vested with the RTC.
We are not persuaded.
Respondent’s arguments must fail in view of the fact that
Section 5 of R.A. 9160 contemplates a situation where a complaint
for money laundering and/or unlawful activities as defined in Section
3 (i) has been filed and is pending before the RTC.
In the present situation, the AMLC is still at the investigation
stage docketed as AMLC Case No. FO-001, with the purpose of issuing
the necessary freeze orders while determining the propriety of
instituting criminal or civil complaints against the respondents
herein for violation of R.A. 9160 before the RTC.
There is, as yet, no actual complaint for money laundering against
the respondents before the RTC. A close perusal of Section 5 of
R.A. 9160 would show that if, after the proper investigation, a
complaint for money laundering is to be filed against the respondents,
then jurisdiction over such case is vested in the RTC. Section
5 of R.A. 9160 does not claim that proceedings prior to an actual
complaint for money laundering shall also vest in the RTC.
We find merit in the petitioner’s contention that jurisdiction
to extend a freeze order issued in accordance with Section 10 of
R.A. 9160 is vested in this Court. it is but logical that this
Court, having the power to enjoin or restrain a freeze order issued
by the AMLC, corollarily exercises the power to either lift its
own restraining order or the power to further extend such freeze
order in the proper circumstances.
Viewed from another perspective, the RTC not having been given
the power to restrain a freeze order issued by the AMLC, neither
does it exercise any corollary power to life any restraining orders
issued to enjoin a freeze order of the AMLC nor the power to act
further on such freeze orders, such as to order its extension.
In this case, the RTC has not yet acquired jurisdiction over the
case as there is yet no complaint filed before it. All that exists
are the freeze orders under AMLC Case No. FO-001. And, since further
proceedings thereon are to be undertaken in accordance with Section
10 of R.A. 9160, the court which may order an extension of the
fifteen (15)-day freeze order period is rationally the same court
which may issue an injunction against such freeze order, that is,
either the Court of Appeals or the Supreme Court.
It would be violative of the well-settled principle of hierarchy
of courts if the Court of Appeals were to restrain a freeze order,
and the aggrieved party would be given recourse to the lower court
and allowed that a freeze order in its favor not only be affirmed
but further extended.
Based on the foregoing premises, We rule that this Court has jurisdiction
to hear and resolve the instant petition praying for the extension of
freeze orders issued by the AMLC on subject bank accounts.
After having heard both parties’ arguments and studying
their respective positions, We find that the petition has merit.
Indeed, there is a need to prevent any transfer or removal of subject
deposits from the bank accounts which are allegedly being used
to channel proceeds of illegal activities. The AMLC having found
probable cause to order the freezing of the subject bank accounts,
We find it proper to extend such freeze orders pending the AMLC’s
further investigation on the propriety of filing complaints against
the respondents for violation of R.A. 9160.
WHEREFORE, based on the foregoing premises, the petition is hereby
GRANTED. As prayed for, the freeze orders issued by the AMLC on
the following bank accounts:
Bank Account No. Account Holder
Hongkong and Shanghai Bank 001-0710910195 Gordon Resnick
China Banking Corp. 544-7-36833 Price Richardson Corp.
(Paseo de Roxas) 103-719221-0
Citibank-Paseo de Roxas 8-132051-292 Consuelo Velarde Albert
are hereby EXTENDED, until further orders.
ELVI JOHN S. ASUNCION
MARIANO C. DEL CASTILLO
EDGARDO F. SUNDIAM
I hereby attest that this Decision was reached after due consultation
among the members of this Division in accordance with Section 13, Article
VIII of the Constitution.
ELVI JOHN S. ASUNCION
Acting Chairman, 12th Division
(NOTE: Subsequently after the promulgation of this Decision, R.A. No.
9194, which took effect on March 23, 2003, amended R.A. No. 9160 otherwise
known as "The Anti-Money Laundering Act of 2001."
The amendment provides that it is the Court of Appeals which has
sole jurisdiction over a petition/motion for extension on effectivity
of a freeze order. The Supreme Court, on April 21, 2003 adopted
a resolution enforcing the amendment provided in R.A. 9194 applying
the same to G.R. No. 154522 (Republic of the Philippines, etc.
vs. Cabrini, Green and Ross, Inc., et al.), G.R. No. 154694 (Republic
of the Philippines, etc. vs. R.A.B. Realty, Inc., et al..) G.R.
No. 15554 (Republic of the Philippines, etc. vs. Mario N. Misa,
et al..) G.R. No. 155711 (Republic of the Philippines, etc. vs.
Alberto De los Reyes, et al.) and all other similar cases pending
before all courts in the Philippines.)
A Major Victory for the AMLC
May 27, 200 issue of TODAY, Business Section
When the delegation head and members of the Anti-Money Laundering
Council (AMLC) go to Australia early next month to meet with the
Financial Action Task Force (FATF), they will have with them, in
addition to President Arroyo’s firm commitment against international
terrorism, a significant triumph in the Philipppine judiciary.
In the case of Republic v. Price Richardson Corporation, et
al, (CA-G.R. SP No. 67974, promulgated 30 April 2002), it was
ruled that the 15-day freeze order issued by the AMLC may be extended
upon order of the Court of Appeals and not by the regional trial
The case involved what appeared to be a "boiler room" operation
being conducted by a company that, on paper, was organized to provide
administrative services such as furnishing clerical, bookkeeping,
mailing and billing services. The formal purpose, as stated in
its articles of incorporation, provided the cover for the many
telephone lines and several working desks manned by shifts of employees
who were in fact illegally selling securities to the public.
To catch the perpetrators of the scam, the head of the Compliance
and Enforcement Department of the Securities and Exchange Commission,
Atty. Tomas Syquia, a worthy son of his worthy father, Ambassador
Enrique Syquia, asked the Regional Court of Makati to issue three
warrants to search on the company’s offices. In the course
of the search, the raiding team - agents of the National Bureau
of Investigation and the SEC - seized false buy-sell confirmation
slips, stock quotations, brokers’ scripts, lists of fictitious
names used by brokers with their corresponding real names, indicating
that violation of Section 28 of Republic Act No. 8777, and some
documents pertaining to the bank accounts of the company.
Convinced that the bank accounts were used to launder the proceeds
of illegal activity, Tom Syquia applied for a freeze order with
the Anti-Money Laundering Council on November 19, 2001. After reviewing
the evidence presented, the AMLC found that there was probable
cause and accordingly issued Resolution 011 directing the relevant
banks to freeze the accounts. The company, through Consuelo Velarde
Albert (of undetermined relation to the famous Jose Velarde) asked
the council to lift the freeze order but her motion was denied
for lack of merit. The 15-day life of the order was not long enough
to complete the investigation. Hence, the AMLC had, under the law,
to seek court extension of the freeze.
The question that confronted the AMLC was where to ask for the
extension. The text of the law was not clear. It simply said "the
fifteen (15)-day freeze order of the AMLC may be extended upon
order of the court," without saying which court.
There were two possible answers. The first, which was espoused
by Price Richardson, was that the proper court is the regional
trial court because Section 5 of the anti-money laundering law
says, in part that "the regional trial court shall have jurisdiction
to try all cases on money laundering." The correct answer,
however, is: Court of Appeals.
Section 5, the Court of Appeals observed, contemplates a situation
when a person has been charged with an anti-money laundering offense.
This is very clear from the second sentence of the section that
appoints the Sandiganbayan as the trial court when the accused
is a public official. Hence, Section 5 is not good authority for
a proceeding where is yet no criminal information filed and where,
as a matter of fact, the matter is still in the investigation stage.
Indeed, the extension of the freeze order is sought in order to
enable AMLC to complete the investigation preparatory to the filing
of the case.
The proper authority is Section 10 itself which deals with the
matter of freeze orders. The last sentence of Section 10 provides
that "no court shall issue a temporary restraining order or
writ of injunction against any freeze order issued by the AMLC
except the Court of Appeals or the Supreme Court."
If the Court of Appeals and the Supreme Court are the only courts
granted the power to restrain a freeze order, then it stands to
reason that only they can extend it. Actually, had Price Richardson
decided to contest the denial of its motion to lift the freeze
order, it would have had to go the Court of Appeals or the Supreme
Court, to restrain it. Price Richardson, however, instead decided
to wait out the 15-day life span, hoping, perhaps, that the AMLC
would not be quick enough to do the right thing.
But, Price Richardson was to be disappointed. The executive director
of the AMLC is Judge Pio Guerrero, a veteran litigator and addressed
as "judge" not because he presided over a court but because
he spent almost all of his entire illustrious career with the Office
of the Solicitor General. He was, when he left that office, the
Assistant Solicitor General. Correctly, he sought the right writ
from the proper court and in due time. And most of all, presented
the right reasons.
The case of Price Richardson should convince the FATF that, despite
the textual inadequacies of the anti-money laundering law (no thanks
to Congress, for that), the Philippine legal system, has enough
features and processes to achieve the major thrust of anti-money
laundering legislation. It should further persuade the FATF of
the country’s seriousness in fighting cross-border money
laundering since the onus of manning the money gates is placed
in the hands of senior justices.
This is not to say that the regional trial court, which is presided
by a single judge, would not be able to do the same thing. But,
there is always the comfort of a collective decision that both
assuages hidden fears of a partial judge and assures the populace
of mature and collective deliberation of a collegial court.
Friday, February 1, 2002
Banks queried on withdrawal of
By Zinnia Dela Pena - The Manila
THE Bangko Sentral ng Pilipinas has directed five major
banks, including Hongkong and Shanghai Banking Corp. and
Citibank NA, to explain why they allowed the withdrawal
of accounts ordered frozen by the Anti-Money Laundering
A ranking official of the Securities and Exchange Commission
said BSP wanted to know why only P51,000 remained of the
P18 million frozen bank account of Price Richardson
SEC is investigating Price Richardson Corp. for alleged
illegal sale of securities through telemarketing. The other
banks are China Banking Corp. and two other smaller banks.
Officials of the banks were not immediately available
"The BSP is looking into this and seeking explanations
from these banks on how it (bank account) went down to
just $1,000 on the date of withdrawal," the SEC official
If investigation would show that these banks conspired
with Price Richardson, the responsible officials will face
six months to 14 years imprisonment depending on the gravity
of violations committed.
The freeze order was issued by the AMLAC following the
raid conducted by a joint 35-member team composed of representatives
from the SEC, National Bureau of Investigation, and International
Police Commission of the six office building of Price Richardson
in Makati on the basis of findings that the company had
engaged in the fraudulent sale of securities.
This was the first time that the newly-created AMLAC has
exercised its authority over companies suspected of engaging
in illegal activities.
The SEC filed with the Department of Justice last December
a criminal complaint against Price Richardson, its operations
manager, Connie Albert and its salesman, Gordon
Resnick, for having sold unregistered securities
in violation of Sections 26.3 and 28 of the Securities
Under the approved articles of incorporation of Price
Richardson, the company’s primary purpose is merely
to provide administrative services and not to engage in
the buying or selling securities in the Philippines as
a broker or dealer.
Without a license, Price Richardson engaged in numerous
instances of soliciting clients on the pretext that it
would buy and sell securities for and in behalf of their
In its complaint filed with the Justice Department, the
SEC said: "This is a case of fraud on a grand
scale. The number of victims in the thousands, the amount
involved in millions of dollars. The modus operandi was
for the respondents in conspiracy with one another, to
set up a corporation in the Philippines and without the
secondary license to deal in securities… engage in
a systematic cold-calling of "leads" and offer
their services as qualified brokers/dealers in securities."
According to the SEC, Price Richardson, its incorporators/directors
and associated persons are liable under Article 315 of
the Revised Penal Code which deals on swindling or estafa.