G.R. No. 210612 - People vs. Mateo

Formation and solicitation of investments by MMG International Holdings Co., Ltd. (MMG)

In March 2001, private complainant Herminio Alcid, Jr. met Geraldine Alejandro, who represented herself as head of MMG’s Business Center, soliciting investments.
Geraldine showed a brochure and Articles of Partnership purportedly showing MMG’s legitimacy; these articles named Ervin Y. Mateo (accused-appellant) as general partner contributing P49,750,000.00, with other accused as limited partners contributing P50,000.00 each.
Based on these representations, Herminio, Jr. invested P50,000.00 on April 20, 2002, received prompt payments of interest and principal, which induced him to make larger investments with his father (P200,000.00 on May 2, 2002) and later his sister Melanie (P50,000.00).
The investments were covered by notarized Memoranda of Agreement (MOA), signed by the accused-appellant as MMG’s President, promising 2.5% monthly interest income.
They received several post-dated checks as payment, but these were dishonored as MMG’s bank accounts were closed.

Upon demand for return of investments, accused-appellant ignored the private complainants’ requests.
The complainants discovered through the Securities and Exchange Commission (SEC) that MMG was not a registered issuer of securities.
The SEC forwarded the complaint to the City Prosecutor of Makati.
On April 11, 2003, the Assistant City Prosecutor filed two separate Informations charging accused-appellant and co-accused with syndicated estafa under Article 315 of the Revised Penal Code (RPC) in relation to Presidential Decree No. 1689 (PD 1689). The Informations detailed multiple fraudulent acts involving false pretenses and misappropriation of investments totaling P200,000.00 and P50,000.00.
The accused-appellant was arraigned on February 19, 2004, and pleaded not guilty. Pre-trial was conducted, and subsequent trial proceeded with prosecution evidence, but the defense failed to present any evidence despite repeated resettings.

On October 22, 2008, the Regional Trial Court (RTC) of Makati City found accused-appellant guilty beyond reasonable doubt of syndicated estafa and sentenced him to life imprisonment for each count and ordered payment of actual damages to complainants.
The RTC found all elements of syndicated estafa present: formation of MMG partnership; fraudulent inducement of complainants to invest; misappropriation of invested funds.
Accused-appellant appealed to the Court of Appeals (CA).
On July 16, 2012, the CA affirmed with modification the RTC Judgment, holding that PD 1689 contemplates estafa as defined under Article 315(2)(a) of the RPC and that syndicated estafa elements were proven.
Accused-appellant then filed a Notice of Appeal to the Supreme Court.

The Supreme Court allowed filing of supplemental briefs. The Office of the Solicitor General (OSG) opted not to file a supplemental brief.
Accused-appellant raised five issues challenging the CA ruling, including the applicability of PD 1689 to estafa under Article 315(2)(a), sufficiency of proof of defraudation, effect of corporate rehabilitation stay order, and alleged errors by the CA.

Whether accused-appellant may be convicted of estafa under Article 315(2)(a) in relation to PD 1689.
Whether the element of defraudation was proven beyond reasonable doubt by the prosecution.
Whether there is sufficient quantum of evidence to convict accused-appellant beyond reasonable doubt.
Whether the stay order issued by the Commercial Court in the corporate rehabilitation of MMG suspends the criminal prosecution of accused-appellant.
Whether the Court of Appeals committed reversible errors in denying the motions for reconsideration filed by accused-appellant.