How Villar built business empire with deceit, corruption: ex-lawyer

How Villar built business empire with deceit, corruption: ex-lawyer
By Aries Rufo

First of 3 Parts

MANILA, Philippines – Octogenarian Maxima Policarpio had spent most of her life in the mountains of Norzagaray, a small town in Bulacan, near the foothills of the Sierra Madre. She had hoped to spend the twilight of her life there in peace and quiet, tending a tiny vegetable garden and surrounded by fruit-bearing trees she had planted many years ago.

Related Stories:

PART 2 of 3: Villar firm faked titles through ‘layering’: ex-lawyer
SIDEBAR: The man who turned his back on Villar
PROFILE: The man who turned his back on Villar
INTERACTIVE GRAPHIC: How Villar company obtained titles to contested land
SIDEBAR: Imus Estate land key to Villar-Ayala deal

Last February, despite her age, she left the comfort of her town and braved Quezon City’s noise, pollution and confusion to join dozens of Norzagaray farmers seeking attention to the imminent loss of their ancestral lands. “I am here to protect my land. I may be old, but I still have rights.”

“We are up against an influential person,” she said.

That person is presidential aspirant and billionaire Senator Manuel Villar Jr.

Represented by a counsel, the farmers detailed how they lost their ancestral lands, in the blink of an eye, to companies connected with Villar.

They also told of harassment efforts to force them to leave their lands.

“Before, we would wake up and see all those crops pulled out from the soil. They would do it at night. We were helpless. Some of them were armed. What would you do? We would just put back the plants,” Inocencia Pascual, 67, said.

The harassment, however, stopped as the election season neared. And they knew it is only a respite. “Tapos kami pag nanalo sya (We’re finished if he wins),” Pascual said.

Contested land

Court records show that the contested land in Norzagaray is supposedly now the property of the Bangko Sentral ng Pilipinas after it was mortgaged in 2001 by two companies where Villar’s wife, Las Piñas Rep. Cynthia Villar, has a stake.

The two companies–Capitol Development Bank (now Optimum Development Bank) and Manila Brickworks–defaulted on a P1.5 billion loan it secured from BSP in April 1998 following the financial crisis that hit Asian countries. The money was allegedly spent to finance the House Speakership bid that year of Villar, who was then a congressman.

Yet, documents gathered by Newsbreak show that the two companies acquired possession of the ancestral lands through fraud and manipulative layering scheme.

It appears that the Villars brought to life the defunct Manila Brickworks out of nowhere to act as the original owner of the contested land. Fake Transfer Certificates of Titles (TCTs) were produced in connivance with the Malolos Registry of Deeds to show possession of property.

Court records in Bulacan show that Manila Brickworks was originally owned by Puyat Enterprises and had claimed possession of the property in the 70s. Poultry houses were put up by Puyat Enterprises but abandoned the area after some time.

After years of inactivity, Manila Brickworks resurfaced in 1998 with new incorporators that interlocked with those of Capitol Development Bank.

Capitol Bank, which had financial problems attributed to the financial crisis, eventually sold select assets to Yuchengco-led RCBC Savings Bank to pay off some obligations, then was renamed  Optimum Development Bank. (Initially, we reported that Capitol Bank was closed. It was not. – Eds)

In June 2001, Optimum signed a deed of real estate mortgage over the questioned property in favor of BSP to secure Capitol and Manila Brickworks’ unpaid loans.

The conveyance of land titles, coupled with fake ones, from one alleged owner to another, creates different layers that were used as an argument to legitimize property acquisition.

This has been the standard operating procedure of Villar’s lawyers and companies to acquire government and previously awarded lands, according to a lawyer formerly employed by the Nacionalista Party bet.

Pandora’s box of testimony

The man who turned his back on Villar

Lawyer Restituto Mendoza is seeking restitution for his sins of commission and omission as a former employee of Senator Manuel Villar Jr’s. housing empire.

Mendoza has filed a labor complaint before the National Labor Relations Commission (NLRC) for his alleged illegal dismissal after refusing the game that Villar’s senior officers play.

In his complaint, he wrote that he turned a blind eye and deaf ears to the mischief that his employers were getting into and how they get out of trouble. But an unexpected twist of events made him see the light.

He is waging a lonely battle against the billionaire and his senior officers.

His labor complaint is also a tell-all account on how the businesses of Villar acquired land for property development. Read more

The Norzagaray land case is just one of the many legal cases faced by Villar’s real estate empire, which was spawned by the production and sale of affordable houses.

Interviews with different sources and documents show his companies have been fending off legal disputes, mostly land grabbing cases, like the Norzagaray case.

In 2004, Villar hired Atty. Restituto Mendoza to handle problematic raw land cases for Household Development Corp., one of the firms under his real estate empire.

Mendoza has a pending complaint before the National Labor Relations Commission for illegal dismissal. Named respondents were Villar, his flagship real estate firm Vista Land and Lifescapes Inc., Casa Regalia, Adelfa Properties and lawyers and officers of the companies. Newsbreak obtained a copy of the complaint, including other documents.

In the labor case, Mendoza opened the Pandora’s box of irregularities of Villar’s businesses, practices and ethics. It was a tell-all testimony, bordering on violating the lawyer-client privilege, as he accused Villar of bribery, corruption, deceit and fraud in rebuilding his empire from bankruptcy.

Mendoza charged Villar on the ground that he is well aware of the practices of the firms’ senior officers—from paying off government officials and judges to faking titles—to skirt potential legal issues. Mendoza said Villar is a hands-on manager, supposedly even concerned about where to put trash cans in the subdivision projects.

Newsbreak sought to corroborate Mendoza’s serious allegations, which included duping another land developer, Ayala Land, and an alleged attempt to bribe Customs officials to release an undervalued crane imported by his company, MGS Corp. (Details in Part 3 of the series, to be published on April 14.) We found some corroborative documents and information to back up Mendoza’s claims.

Ayala Land, which got questionable titles as in exchange for a previous P300 million loan from a Villar firm, has yet to reply to our query as of this posting. (Read: Imus Estate land key to Villar-Ayala deal)

Customs officials, on the other hand, provided data of the botched importation. (Details in Part 3)

Violation of lawyer-client relationship

Villar’s chief legal officer, Ma. Nalen Rosero-Galang, who has been countering the land grabbing complaints hurled against Villar since the campaign began, dismissed Mendoza’s stories and narration as “all lies.” In an interview with Newsbreak, Galang said she is “shocked of Mendoza’s allegations.”

Galang pointed out that Mendoza took five years to come out and expose the unethical practices of Villar’s businesses.

“I would have wanted to ignore him so as not to dignify his claims,” Galang said in an interview. Besides, she added that Mendoza’s claims would not have been admissible in court since “it violates the lawyer-client relationship.”

“Actually I pity him, since no one would want to hire him as a lawyer after this,” she added.

We also sought to interview Mendoza, but he begged off, saying his complaint would suffice. Mendoza was dismissed in May last year and filed his complaint in August.

The C-5 controversy

In his complaint, Mendoza mentioned some of the properties that benefitted from the controversial C5 road extenstion project. The road traversed through 50-52 hectares of Villar’s property holdings.

Villar’s peers in the Senate conducted ethics committee hearings. In a report, the senators found Villar guilty of conflict of interest when he supposedly benefited from the P6.96 billion road project. A public works feasibility study stated that Villar conceived and funded the project.

Mendoza provided the context in the arrangement between two real estate properties associated with Villar. Masaito Development Corp and Adelfa Properties supposedly swapped properties affected by the C5 road extension.

Based on documents submitted by Mendoza to the NLRC, it was Villar’s Adelfa Properties that initiated the arrangement with Masaito. Adelfa then claimed the bulk of expropriation proceeds from the Masaito property.

The agreement stated Masaito would only get only P7 million while Adelfa would get the remainder, amounting to P15 million.

A total of P168.1 million was paid by the government for the right of way involving Villar’s properties while only P22 million for non-Villar properties.

And yet, based on Mendoza’s claims on the Masaito agreement, through careful planning and foresight, Villar even got proceeds from his supposed non-properties.

Why would Masaito agree to swap properties with Adelfa if it would be paid for the right of way anyway? Was government informed about the swap or was there an attempt to cloak it through internal arrangement?

Internal arrangement

A source familiar with the case said that Villar’s senior officers had anticipated the road extension would pass through the Masaito properties. The properties were raw lands at that time and would have commanded low zonal valuation.

Yet, through connections in the DPWH and the Bureau of Internal Revenue, the Masaito property was valued at P30,000 per square meter, a “unique” situation that Adriano told the Senate since it was the only property that commanded that high price.

In the Senate probe, former revenue district officer Carmelita Bacod admitted that the valuation was “grossly disadvantageous to the government.”

The source explained that Masaito knew it would only get a lower zonal valuation and thus, lower payment for its properties, if only government would have its way. Entering into an agreement would be a win-win situation for both Adelfa and Masaito—the former gets a portion of the right of way payment without essentially losing with its property while the latter gets the bulk of the proceeds.

To facilitate the agreement, Masaito and Adelfa signed a memorandum of undertaking (MOU) where they agreed to open a joint bank account at the Landbank where expropriation proceeds would be deposited. Adelfa president Jerry Navarette and Masaito president Joseph Wang would be the joint signatories.

After the first tranche of P22 million has been deposited, of which P7 million would given to Masaito, Adelfa would assume “sole right” of the remainder of the proceeds, the MOU stated. Navarrete would then be the sole signatory of the Landbank account.

Mendoza said it was the C5 controversy that shattered his respect of Villar. He recalled that he was the one who drafted the Masaito agreement upon hearing Senator Jamby Madrigal mentioning the company. “Evidently, Senator Villar was not telling the truth when he had been consistently denying in public that he and his companies never received a single centavo from the C-5 road extension project,” Mendoza said.

In drafting the Masaito-Adelfa agreement, Mendoza said he “unknowingly had been an instrument of corruption in what is now the C5 road scandal.”

In his Feb. 2 speech before the Senate to rebut the ethics, Villar maintained that he did not financially benefit from the C5 project. “Wala po akong ninakaw sa kaban ng bayan. Wala po akong kasalanan, wala pong anomalya sa C5 project at hindi po ako nakinabang,” Villar said. – With reports and additional research from Althea Teves and Purple Romero,

Karen Ang

A plebeian who is trying to make small changes in this world.

  • Resty Mendoza ,

    thank you Andi for believing in me

    • Resty Mendoza ,

      Dear Pet Carillo, allow me to explain to you the rule on lawyer-client privilege. There are exceptions to this rule. Under American Jurisprudence a lawyer is not prohibited from divulging illegal acts or corrupt acts of a client. Under philippine law, we have the canon of legal ethics which enumerates exemptions to this rule. One such exemption is when the lawyer is suing his own client and divulging these privileged information is a defense in his case. this is exactly what i did. they illegally terminated me and so i filed an illegal dismissal case against him. in my position paper i enumerated that these corrupt practices which i objected to was central to the cause of my dismissal. i hope i have enlightened you although 3 years later

      • Resty Mendoza ,

        dear Starbucks lady. I am assuming that you are not his employee but only a sympathizer. Please do not judge me as an extortionist. Fyi, I was being forced to resign and they offered me P750,000. True to their culture they are bribing even their own laywer to resign. Insulted, coz I had done nothing wrong but to object to the culture of bribery in the company and developed a conscience, I gave them a counter offer which I know they will refuse. Of course they will claim I am extorting. But did they tell you that they offered me an amount to force my resignation?

        • antivillar ,

          IF ANYONE OF YOU DID WATCH AN INTERVIEW OF pACQUIAO ) ABS network about three weeks ago where Pacquiao was asked about whther he is able to become a congressman, you would have witnessesed that three replacement of Filipino’s version of the three stooges have been born. Pacquiao who seated on the right side of Villar while Wowowee Willi seated on the left side of Villar. While Pacquiao was asked and his revealing answers will let you know how far he understood his duties as a congressman which were really embarrasing to Villar , watching his reluctant smile and uneasiness. You could read his mind saying” I am supposed to be running for Presideny and here am I with these two stooges saying dumb statements, poeple might think I am dumb too” Anyway, Willie the clown tried to divert the attention after Pacquiao made blunders by making jokes. So here we are folks, stuck with the the Filipinos “three stooges” and please think how Villar can get low just to get popular at the expense of his ‘self-respect” if there is any left from him.

          • moonlite_58 ,

            maging mapagmatyag lang tau…hindi sagot si villar , si noynoy o si estrada man sa kahirapan natin,nasa atin na yun kung magsisikap tau….ngunit kung sila’y iboboto natin baka mas lalo lang tau maghirap,mayron pa nman ibang kandidato dyan mas totoo sakanila…tama na…sobra na…vote wisely!!!!!!

            • zamy ,

              This is what I meant of ‘Sipag at tyaga’ as government contracts. I told my kids about the danger of this value phrase… If somebody a politician of high position becomes very big, truly big, through government contracts, knowing how government operates…this ‘sipag’ has terrible repercussions to the Filipino People….May God preserve the Filipino Nation…May His mercies and protection depart not from us!

              • Nhowell Martinez ,

                How can we trust Villar in his slogan “Tatapusin ko ang kahirapan” since this is very unrealistic “Magpakatotoo naman sya” paano nya tatapusin ang kahirapan eh hindi naman sya naghirap o mahirap baka tayong mga Pilipino ang tatapusin nya once he is elected since kayang kaya nya tayong bilhin, nakakatawa naman talaga ang slogan nya, ang dami na nating naging President but not one tried na tapusin ang kahirapan since hindi naman talaga realistic eh cla lang ang yumaman ng yumaman, sa dami ng mahirap sa ating bansa cno ang may kayang tapusin ang kahirapan? wala kahit c Villar di kaya yan sa loob ng 6 years term nya pustahan tayo itaga mo sa bato walang matatapos, tayo ang tatapusin nyan, kahit cno ang umupong Presidente ganun pa din yan mananatiling mahirap ang mahihirap at lalong yayaman ang mayayaman. Tingnan nyo nga ang Meralco lalong payaman ng payaman eh kc naman magaling lang magtaas ng cngil at mangolekta, ganyan din sa Presidente, magaling lang yan sa salita pero pagnaka upo na puro pagpapayaman lalo ang gagawin nya, c Villar pa eh businessman yan, negosyante kaya ang tingin nya sa lahat negosyo. Sa tingin nyo ba matulungan tayo nyan bakit kilala ba tayo nyan naku ewan kung makakilala pa yan pag naka upo ng Presidente I doubt it very much kaya wag na tayo magpaloko sa mga slogan na Tatapusin ko ang kahirapan kasi imposibleng mangyari yan very unralistic talaga sana ang ginawa nyang slogan ay “BABAWASAN KO ANG KAHIRAPAN” baka pwede pang paniwalaan – TAMA !!!!!!!

                • starbucks_lady_diliman ,

                  atty resty mendoza will be disbarred. even assuming that his allegations are true, still there is a proper forum on that.he committed a very serious violation of atty-client privilege relationship and his name will be condemned for all eternity for his act inimical to the prestige and honor of the legal profession. those who think that atty mendoza is a saint well you better hold your horses.atty mendoza is a plain and simple extortionist.have you read his complaint? he admitted of asking for a P 25 million seperation pay.Where on earth can you find a company lawyer demanding for a seperation pay of P 25 million? He said that he worked as company lawyer for 5 years. So if the seperation pay is computed at 1 month for every year of service so it means that his monthly pay is P 1 million? it appears by that amount he must be earning more than Bill Gates or our very own Manny Pangilinan. In his complaint he said that his monthly salary is between 50,000 to 100,000. So if ever his seperation pay should only be between 250,000 – 500,000. Obviously Atty. Mendoza is extorting Vista Land. Indeed politics in the Philippines is so dirty and we find here Manny Villar as the being subject of all possible insults known to man.Well atleast his mental health as well as fidelity to family remains to be untarnished.

                  • pet carillo ,

                    I agree 100% starbucks_lady. You know your legal ethics. Who would believe atty Mendoza if he has labor case against villar company and the timing is worst election time pa.
                    I will rather vote for a self-made man than a single man who has no experience managing his own family.

                    • antivillar ,

                      Well… this self-made man has had many experiences, good ro bad that made him what he is now. Take some research on how he builds his billions. He used money to buy people to get his way. The brilliance of his strategies should be written so that it can be a model how to book in ” how to get rich ” for those who believe him and for those who are disgusted the book will be reminder of the deadly sins of the Christian faith. Character, integrity, and self-respect are still true in this old wise world and that just those “sipag at tiyaga” which are true in the sense that you really have to be hardworking to corrupt people and perservere to kill their dignity, otherwise you will not succeed.

                    • antivillar ,

                      Dear Ms. Sratbucks,

                      The issue here is not the career of Mendoza but the life and eath of the filipino people had they never known what the “lies beneath Villar” Thanks to Mendoza who have guts to spill and reveal Villar”s real life plan to even make this poor country true to its form” naliligo sa basura” For Mendoza can even ask Villar more than 25M more for corrupting the legal profession by naking his paid lawyers circumventing the laws and even the Constitution. Villar has been known as the teacher of Arroyo in the political manuevering and grand scale draining of government funds through mind blowing strategies.. If he can pay those three stooges ( Dolphy, Willie, and Pacquiao) to ramble patronizing nonsense in front of the camera, I am sure he can pay corrupt politicians to form this republic a banana republic lower than any countries in south America. We should be thankful to Mendoza Ms. Starbucks .

                    • Mar ,

                      If Villar can already do this massive kind of irregularities & corruptions to this date, Imagine what he can do worst if he won as President! It’s in-conceivable for Villar or to anybody in general to really amassed that fortune out of fair land deals. Logic will tell us that bribery, illegal transactions & conspiracy are involved in Villar’s unrealistic financial gains all these years. I believe that Villar’s aim for presidency is not to serve the country but to protect his ill-gotten wealth w/c will be a subject of future & deeper scrutiny should a new president other than Villar won.
                      Arroyo to me is a no-delicadeza; no moral ascendancy; so corrupt together w/ her own family members, so-arrogant power-hungry president so far. Expect Villar to be worse than Arroyo.. We Filipinos really need Divine intervention to be free from these Trapos & political wolves who by the way operate on groups!
                      It’s a pity that these leaders who were given the chance to serve & create positive change for our country turned selfish & corrupt, so blinded by personal ambitions not to see the awful condition of our poorest majority.

                      • andi ,

                        This is so true of the Villar companies. Philippines, please vote wisely. Atty. Mendoza’s story is an eye-opener and everything is true.

                        • Melisa ,

                          Thanks so much for releasing this kind of information. I also appreciate Atty. Mendoza’s courage, although I know there are countless lawyers who are in such a pathetic condition…You studied law for so many years to use your God-given mind to earn a living and be an instrument of justice in the land…only to allow yourself to be part of staggeringly corrupt companies that prey on the ignorant, the unlearned, the helpless, and the poor.

                          The story is not really new; it’s the same old story that repeats itself over and over–and in many forms and shades. These days it seems to have found its own Truth in–sorry for the negative term–“garapalan”, from the least to the greatest… 🙁

                          I hope more Filipinos would discover this very informative site.

                          • gay ,

                            i am afraid our country is going to the dogs. i hope and pray that GOD intervenes in this coming election, we Filipinos have suffered a lot for so long.

                            • bro dann ,

                              I would like to appreciate this lawyer Mendoza, for divulging, revealing this unethical reality, demonic act done by our very own Sen. MAnny Villar, a public servant in claim.Oh!! come’n Mr Senator You forgot one of the Ten Commandment: Though shall not steal….. You have A million of time to do worldly business in terms of money but business of the salvation of your soul you have not? rememner in one verse of the bible it says; “God knows the truth but wait” ……. you pay the last penny….
                              you own the whole world yet, you lose your soul….

                              Maybe VillaRroyo God the forgiving and the loving Father give both of you and your followers a chance to change and repent to back to Him…Amen….

                              • mefania(ahmad) ,

                                I have no especial comment, but i would like to say that Villar is a cheater and his properties in grand Europa ( portico) are fake and he and his people in commelia real estate in cagayan de oro are all corrupter . they sell the houses and lands with fake documents. He has already spent about 1.3 billion pesos as election advertising and absolutely will spend more as of buying votes. he is sure that after election and if he wins he will simply collect souble of that spent money . .so how he has been rich? its very clear by grabbing the lands of poor farmers and payments for providing the non standard documents and materials and forcing the athorities to neglect his cheatings. they sell old houses as brand new to the people. i hope god will help the people to know about such persons and reject him and other such guys and hope god will revenge of him soon.