G.R. No. 234616. June 20, 2018
PHILIPPINE DEPOSIT INSURANCE CORPORATION, PETITIONER, VS. MANU GIDWANI, RESPONDENT.

FACTS

The Philippine Deposit Insurance Corporation (PDIC), as receiver for several closed rural banks under the Legacy Group, processed deposit insurance claims. Respondent Manu Gidwani, along with 86 other individuals, filed claims for 471 accounts. PDIC issued 683 crossed checks, payable only to the named payees’ accounts, totaling ₱98.7 million. However, the proceeds of these checks were all credited to a single RCBC account owned by Gidwani. PDIC’s investigation alleged the 86 individuals were helpers or employees of the Gidwanis without the financial capacity to own the deposits, that advance interests were paid to the Gidwanis, and that funds for the accounts came from a single source. PDIC concluded the accounts were beneficially owned by the Gidwanis, who schemed to circumvent the maximum deposit insurance coverage.
PDIC filed a criminal complaint for Estafa through Falsification and Violation of the Anti-Money Laundering Act (AMLA). The Department of Justice found probable cause, but the Court of Appeals reversed, finding no probable cause for the crimes charged. The CA ruled that the act of consolidating the check proceeds into one account, by itself, did not constitute falsification or estafa, and that the elements of money laundering were not sufficiently alleged.

ISSUE

Whether the Court of Appeals committed grave abuse of discretion in reversing the DOJ’s finding of probable cause to charge Manu Gidwani with estafa through falsification and money laundering.

RULING

No, the Court of Appeals did not commit grave abuse of discretion. The Supreme Court affirmed the CA’s ruling. On the charge of estafa through falsification, the Court held that probable cause was lacking. For falsification under Article 172 in relation to Article 171(4) of the Revised Penal Code, the element of making untruthful statements in a narration of facts was not established. The information in the account documents—that the 86 individuals were the depositors—was not proven to be false at this preliminary stage. Gidwani’s defense of a fund management agreement, while not a full vindication, cast sufficient doubt on the allegation of falsity. Without conclusive proof that the named depositors were not the true owners, the element of falsification was absent, and consequently, the fraud element for estafa could not stand.
Regarding money laundering, the Court ruled that the predicate crime of estafa through falsification was not sufficiently established. Money laundering under Section 4(a) of RA 9160 requires a prior unlawful activity. Since the finding of probable cause for the predicate crime was correctly overturned, the money laundering charge could not prosper. The Court emphasized that a petition for certiorari under Rule 65 against the CA’s decision in a probable cause determination is limited to reviewing jurisdictional errors, not correcting perceived factual or legal miscalculations. PDIC failed to demonstrate that the CA’s judgment was issued with grave abuse of discretion amounting to lack or excess of jurisdiction.