Case Summary (G.R. No. 234818)
Facts and Allegations
Private complainants invested substantial amounts of money, totaling over five million pesos and approximately US$90,981.00, in Everflow based on representations by Felix and Iris Aquino that their investments would yield 70% interest and double in value in a little over a year, with at least 5% interest monthly. However, after closure of Everflow following a Securities and Exchange Commission cease and desist order, the accused refused to return the investments. Various private complainants filed thirty-three separate informations alleging syndicated estafa against Felix, Iris, and other directors of Everflow.
Procedural Background
Felix and Iris were the only accused arrested and arraigned, with others remaining at large. Eleven counts were provisionally dismissed due to non-appearance of complainants. Iris Aquino’s cases were dismissed due to her death. Felix denied culpability, claiming they were victims of another individual, Rosario Baladjay, and asserting the funds were invested elsewhere. The Regional Trial Court (RTC) initially convicted Felix for sixteen counts of syndicated estafa and ordered life imprisonment alongside payment of damages and legal interest, later modified to twenty-one counts based on further evaluation.
RTC Findings and Sentencing
The RTC found that Felix and his co-accused, as Everflow officers, used false pretenses by soliciting investments without SEC authorization, inducing complainants to invest on fraudulent promises with checks issued against closed accounts. The court held that the syndicate’s operation constituted clear criminal fraud under PD 1689 and the RPC, resulting in Felix’s conviction for twenty-one counts of syndicated estafa, with life imprisonment for each count and monetary damages awarded to sixteen private complainants.
Court of Appeals (CA) Affirmation
The CA upheld the RTC’s decision on July 28, 2017, agreeing that Felix and his co-accused made false representations about the investment's legitimacy, inducing complainants to invest money, which was later misappropriated. The CA emphasized the fraudulent intent evidenced by Everflow’s lack of authorization to solicit public investments and dishonored post-dated checks, ruling the appeal lacked merit.
Legal Issue Before the Supreme Court
The sole issue for resolution was whether Felix Aquino was guilty beyond reasonable doubt of syndicated estafa as defined under Article 315 (2)(a) of the RPC in relation to PD 1689.
Elements and Legal Standards Applied
Article 315 (2)(a) of the RPC requires: (a) false pretenses or fraudulent representation prior to or simultaneous with the fraud; (b) reliance by the victim on such misrepresentation causing the victim to part with money; and (c) resulting damage. Presidential Decree No. 1689 elevates estafa to syndicated estafa if committed by a syndicate of five or more persons soliciting funds from the public, which results in misappropriation. The elements of syndicated estafa include commission by a syndicate of estafa or swindling and misappropriation of solicited funds.
Court’s Analysis on Fraud and Ponzi Scheme Modus Operandi
The Court analyzed the operations of Everflow and found that the repeated inducements of investments under false pretenses satisfied the elements of estafa, knowing from the start that the promised returns could not be legitimately paid. The Court clarified that not all failed business ventures amount to fraud unless the accused knowingly made false representations to induce investments. The factual circumstances supported the conclusion that Felix and his co-accused employed a fraudulent scheme akin to a Ponzi scheme, wherein early investors were paid with funds from later investors, ultimately resulting in the wrongful misappropriation and abscondment of inves
...continue readingCase Syllabus (G.R. No. 234818)
Parties and Procedural Posture
- The People of the Philippines are the plaintiff-appellee; Felix Aquino is the accused-appellant.
- Co-accused include Iris Aquino (deceased), Eleanor Macabbalug (at-large), Genalyn Nasol (at-large), Arturo Delgado, Jr. (at-large), Pearl Militar (at-large), and Catherine Anna Dela Cruz (at-large).
- Felix Aquino filed an ordinary appeal assailing the July 28, 2017 CA Decision which affirmed the July 22, 2014 RTC Joint Decision, as partly revised by its August 8, 2014 Order.
- Felix was convicted of twenty-one counts of Syndicated Estafa under Article 315(2)(a) of the Revised Penal Code and PD 1689.
- The appeal raises the central issue of whether Felix is guilty beyond reasonable doubt of Syndicated Estafa.
Facts of the Case
- Thirty-three separate informations were filed against Felix and co-accused for Syndicated Estafa involving solicitation of investments through Everflow Group of Companies (Everflow).
- The investors were induced to invest various sums with promises of high returns: initially 5% monthly interest, later claims of 70% interest and doubling investment in more than a year.
- Invested amounts totalled approximately ₱5,161,211.28 and US$90,981.00.
- Everflow was shut down following a Cease and Desist Order by the Securities and Exchange Commission (SEC).
- Upon Everflow’s closure, investors’ demands for returns were refused; Felix promised return but failed to comply.
- Of seven accused, only Felix and Iris (now deceased) were apprehended; others remain at-large.
- Eleven of the thirty-three counts were provisionally dismissed due to complainants' failure to appear.
- Felix and Iris denied liability, asserting they were victims of Rosario Baladjay and claiming funds were invested in Multinational Telecom Investors Corporation (Multitel).
Lower Courts’ Rulings
- The RTC found Felix guilty beyond reasonable doubt of initially sixteen counts, sentenced to life imprisonment for each, and ordered payment of actual damages plus legal interest.
- The RTC later amended the conviction to twenty-one counts, although civil liability was limited to sixteen counts based on availability and identity of complainants.
- The Court of Appeals affirmed the RTC’s ruling in full, underscoring the fraudulent misrepresentation and prohibition against soliciting public investments without SEC authorization.
- The CA highlighted that Felix and co-accused's scheme involved dishonored checks drawn on closed accounts as evidence of fraud.
Legal Issues
- The sole issue for the Supreme Court: Whether Felix Aqui