Clarificatory hearings of the Justice Department on the syndicated estafa cases against Globe Asiatique (GA) exposed a "modified Ponzi" scheme used by the realty firm to siphon off money amounting to P6.6 billlion from the Home Development Mutual Fund (Pag-IBIG Fund) to develop its Xevera projects in Pampanga.
“Globe Asiatique essentially employed a modified Ponzi scheme in defrauding Pag-IBIG Fund,” said Pag-IBIG president and chief executive officer Darlene Marie Berberabe in her report to Vice President and Housing and Urban Development Coordinating Council (HUDCC) chair Jejomar C. Binay.
According to Berberabe, a Ponzi scheme “is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors.”
This type of scam was also used by Legacy Group owner Celso de los Angeles, who was charged for siphoning millions of pesos from depositors and plan holders through alleged irregular investment transactions.
Berberabe said GA paid fake borrowers to become “instant” Pag-IBIG members who would be able to obtain housing loans. The borrowers, however, had no intention of becoming legitimate buyers of the Xevera units.
“Since the transaction purportedly involves the borrowing of money for the purchase of housing units, the proceeds necessarily went to Globe Asiatique,” Berberabe said.
“As the buyers are fakes, not a single loan amortization is paid by them. Amortizations are actually paid by Globe Asiatique. This is a fact admitted by Mr. Delfin Lee, Globe Asiatique’s president,” she added.
Berberabe also highlighted that GA exerted “painstaking efforts” to maintain all of its accounts in Xevera current, resulting in a near perfect 99+ percent Performing Accounts Ratio (PAR) and hampering earlier detection of the fraudulent activity.
In October 2010, Vice President Binay ordered Pag-IBIG to blacklist GA, barring the company from availing additional loans from the shelter financing agency.
“After Pag-IBIG Fund stopped taking out housing loans for Globe Asiatique, its PAR drastically dropped and now stands a measly 20 percent. This is further proof of the fictitiousness of the great majority of Globe Asiatique’s borrowers and that the loan proceeds from Pag-IBIG are the same moneys being used to service the accounts,” Berberabe said.
She also noted that in contrast with the original Ponzi operation, which is destined to collapse because scammers earn less than what they pay to investors, the GA scam was bound to continue for a long time because the loans they secure are way higher than the required payment for the housing units.
GA was able to receive an average loan take-out of P680,000 compared to the a monthly average amortization of only P5,000 for a term of 30 years.
Meanwhile, Lee has pointed to former GA employee Francisco Dela Cruz for single-handedly producing more than 800 fake borrowers. He said his company gave a P5,000 incentive for every buyer/borrower that employees are able to recruit.
Dela Cruz, now a material witness for Pag-IBIG, confirmed that the realty firm used and financed so-called “special buyers.”
His testimony was corroborated by Veniza Santos, another former GA employee, who said the company practiced recruiting fictitious borrowers even before the Xevera projects and defrauded even lending banks.
Aside from using fake borrowers, GA was also found to be double selling home units taken out by Pag-IBIG to its in-house buyers, or vice-versa. Alleged victims filed complaints with Pag-IBIG and NBI in October and December 2010, and in February this year.
Currently, Lee, some GA officials and a Pag-IBIG lawyer are facing three charges of syndicated estafa constituting economic sabotage, a non-bailable offense.
The DOJ concluded its clarificatory hearings on March 15. Pag-IBIG is awaiting advice from Binay on further actions to take against the erring property developer.